EXHIBIT 2.1
AGREEMENT AND PLAN OF EXCHANGE
THIS AGREEMENT AND PLAN OF EXCHANGE (the "Agreement"), is dated as of June
20, 2000 and entered into by and between Cedar Mountain Distributors, Inc. a
Nevada corporation ("Cedar Mountain"), and Tarus International, Inc., a Kansas
corporation ("Tarus").
RECITALS
WHEREAS, Cedar Mountain and Tarus and their respective Board of Directors
deem it advisable to exchange all of the issued and outstanding common stock of
Tarus for 1,000,000 shares of common stock of Cedar Mountain as herein
contemplated, pursuant to which exchange the shareholders of Tarus shall become
shareholders of Cedar Mountain and Tarus shall become a wholly owned subsidiary
of Cedar Mountain;
WHEREAS, the exchange provided for hereby (the "Exchange") shall be
consummated in accordance with the terms and conditions hereof and shall be
consummated as of the close of business on the date on which the duly executed
Agreement pursuant to Section 92A.200 of the Nevada General Corporation Law has
been duly filed with the Secretary of State of the State of Nevada (the
"Effective Date"); it being understood that the parties shall endeavor to cause
the Effective Date to occur on the same day as the date of the closing of this
Agreement (the "Closing Date");
WHEREAS, Cedar Mountain and Tarus intend that the Exchange shall be
recognized as a tax-free reorganization under the provisions of the Internal
Revenue Code of 1986, as amended (the "Code");
NOW THEREFORE, in consideration of the mutual benefits to be derived from
this Agreement and the provisions hereinafter contained, Cedar Mountain and
Tarus agree as follows:
ARTICLE I
EFFECT OF EXCHANGE ON CEDAR MOUNTAIN SHARES AND TARUS SHARES
Section 1.1 Exchange.
The manner and basis of exchanging the Tarus shares and the Cedar Mountain
shares in the Exchange shall be hereafter in this Article I.
Section 1.2. Exchange of Tarus shares.
Each of the Tarus shares issued and outstanding on the Effective Date, and
all rights in respect thereof, shall on the Effective Date, without any action
on the part of any holder thereof, shall be exchanged for five shares of common
stock of Cedar Mountain, each of which shall be validly issued, fully paid and
nonassessable.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Tarus represents and warrants as follows:
Section 4.1. No Breaches of Statute or Contract; Required Consents.
Neither the execution and delivery of this Agreement or the related
articles of exchange by Tarus, nor compliance by Tarus with the terms and
provisions thereof and of the Plan will: (i) conflict with or result in a breach
of any of the provisions of the articles of incorporation, bylaws or other
governing instruments of Tarus, or any judgment, order, decree, or ruling to
which Tarus is a party, or any injunction to which it is subject of any court of
governmental authority or of any agreement, contract or commitment to which it
is a party and which is material to the financial condition of Tarus considered
as a whole, or (ii) require the affirmative consent or approval of any
non-governmental third party (apart from stockholder approval referred to
elsewhere herein).
Section 2.2. Authorization of Agreement.
Tarus has the corporate power to enter into this Agreement and to perform
its obligations hereunder; the execution, delivery and, subject to requisite
stockholder approval, the performance of this Agreement by Tarus has been duly
and validly authorized by the Board of Directors of Tarus, and Tarus has taken,
or will use its best efforts to take prior to the Effective Date, all action
required by law, its Articles of Incorporation and bylaws to authorize the
execution, delivery and performance or this Agreement, the Plan, and related
articles of exchange.
Section 2.3. Further Representations.
(a) Tarus is duly organized, validly existing and in good standing as a
corporation under the laws of the State of Kansas; has full corporate power to
carry on its business as its is now being conducted, and to own and operate the
properties and assets it now owns or operates; and is duly qualified to do
business and is in good standing in each jurisdiction where the conduct of its
business or the ownership of its properties require such qualification.
(b) Tarus has issued and outstanding of 200,000 shares of common stock,
each validly issued, fully paid and nonassessable. Tarus has no other class of
stock or
convertible securities outstanding. There are no existing options, warrants,
calls, commitments or rights of any character to purchase or otherwise acquire
from Tarus shares of capital stock of any class, no outstanding securities of
Tarus that are convertible into shares of capital stock of Tarus of any class,
and no options, warrants or rights to purchase from Tarus any such convertible
securities.
(c) Tarus has heretofore delivered to Cedar Mountain accurate and complete
copies of the balance sheet of Tarus at March 31, 2000 (the "Tarus 2000 Balance
Sheet") and the related statements of income, stockholders' equity and changes
in financial position of Tarus from inception through March 31, 2000. Such
balance sheet fairly presents the financial position of Tarus at the date
thereof and all such statements of income, stockholders; equity and changes in
financial position for the periods indicated, in conformity with accounting
principles generally accepted in the United States and consistently applied.
(d) Tarus has delivered to Cedar Mountain the following documents, all of
which have been signed for identification by the President of Tarus and are
dated as of the date hereof: (i) a list of all the liabilities and obligations
of Tarus as of May 31, 2000 (Schedule "A"); and (ii) a list of all property and
all other assets of Tarus as of May 31, 2000 (Schedule "B"). Tarus has good and
marketable title to all properties and assets, real and personal, described in
Schedule "B". All of the properties and assets listed on Schedule "B" are free
and clear of all mortgages, pledges, liens, charges, security interests or other
encumbrances of any nature whatsoever, except for mortgages, pledges, liens,
charges, security interests or other encumbrances as set forth in Schedule "B",
liens for current taxes not yet due and payable, and imperfections of title,
easements and encumbrances, if any, that are not substantial in character,
amount or extent and do not materially detract from the value, or interfere with
the present or proposed use, of the property or assets subject thereto or
affected thereby, or otherwise materially impair business operations. All leases
pursuant to which Tarus leases any substantial amount of real or personal
property are in good standing, valid and effective in accordance with their
respective terms, and under none of these leases is there any existing default,
event of default or event that with notice or the lapse of time, or both, would
constitute a default and in respect to which Tarus has not taken adequate steps
to prevent a default from occurring.
(e) Between March 31, 2000 and the date of this Agreement there has not
been any material adverse change in the financial condition or in the
operations, business or property of Tarus.
(f) The structures, equipment, computers, and other physical assets of
Tarus that are necessary to the operation of the business being conducted by it
are in good operating condition and repair, subject only to the ordinary wear
and tear of the business.
(g) Neither Tarus nor, to the knowledge of its shareholders, any other
party have
breached any material provision of, or defaulted in any material respect of the
terms of any contract or agreement to which Tarus is a party which would have a
materially adverse effect upon the business or financial condition of Tarus.
(h) Tarus will deliver such other lists, descriptions, information,
schedules, documents and reports as may reasonably be requested by Cedar
Mountain.
(i) To the best knowledge of its shareholders, there is no default or
claim, purported or alleged default, or statement of facts under which lack of
notice or the lapse of time, or both, would constitute a default on any
obligation to be performed by Tarus under any material lease, contract, plan or
other arrangement.
(j) No suit, action or legal, administrative or arbitration proceeding,
which might materially and adversely affect the overall financial condition,
business property or Tarus is pending or, to the knowledge of its shareholders,
threatened.
(k) Tarus owns or possesses, or reasonably believes it can acquire on
reasonable terms, adequate patent rights or other rights to use patent rights,
inventions, trademarks, service marks, trade names and copyrights necessary to
conduct the business now operated by it, and Tarus has not received any notice
of infringement of or conflict with asserted rights of others with respect to
any patent, patent rights, inventions, trademarks, service marks, trade names or
copyrights which, individually or in the aggregate, if subject of an unfavorable
decision, ruling or finding, would have a material adverse affect upon the
business, operations, properties, assets or condition, financial or otherwise,
of Tarus.
(l) The representations and warranties of its shareholders and Tarus shall
be as of the date of this Agreement and as of the date of the Effective Date.
Any such representation made as of such dates shall survive the Closing Date.
All representations and warranties of Tarus are based upon knowledge only of its
officers and directors and no one else.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CEDAR MOUNTAIN
Cedar Mountain represents and warrants as follows:
Section 3.1. Status of Cedar Mountain Shares.
The shares of Cedar Mountain shares to be issued to the Tarus shareholders
pursuant to this Agreement and plan, when so issued, will be duly and validly
authorized and issued, fully paid and nonassessable.
Section 3.2. No Breach of Contract; Required Consents.
Neither the execution and delivery of this Agreement nor compliance by
Cedar Mountain with the terms of provisions hereof and of the plan will: (i)
conflict with or result in a breach of any of the provisions of the Articles of
Incorporation or bylaws or other governing instruments of Cedar Mountain, or any
judgment, order, decree, or ruling to which Cedar Mountain is a party, or any
injunction to which it is subject of any court or government authority, or of
any agreement, contract or commitment to which Cedar Mountain is a party and
which is material to the financial condition or results of operations or conduct
of the business of Cedar Mountain considered as a whole, or (ii) require the
affirmative consent or approval of any non-governmental third party.
Section 3.3. Authorization of Agreement.
Cedar Mountain has the corporate power to enter into this Agreement and to
perform its obligations hereunder; the execution, delivery and performance of
this Agreement by Cedar Mountain have been duly and validly authorized and
approved by the Board of Directors of Cedar Mountain; and Cedar Mountain has
taken, or will use its best efforts to take prior to the Effective Date, all
action required by law, its Articles of Incorporation or bylaws to authorize the
execution, delivery and performance of this Agreement and the Plan.
Section 3.4. Current Shares Outstanding.
As of the date of this agreement, there are currently issued 2,000,000
shares of fully paid and validly issued common stock.
ARTICLE IV
CONDUCT AND TRANSACTIONS PRIOR
TO EFFECTIVE DATE
Section 4.1. Access; Operation of Business between the Date of this
Agreement and the Effective Date.
(a) Access. Tarus and Cedar Mountain each agrees to furnish the other with
such financial and operating data and other information with respect to the
business and properties of it as the other shall from time to time reasonably
request in furtherance of consummating the Exchange; provided, however, that any
such investigation shall not affect any of the representations and warranties
hereunder. In the event of termination of this Agreement, Tarus and Cedar
Mountain will each return to the other all documents and other material obtained
from the other in connection with the transactions contemplated hereby, and each
shall maintain the confidentiality of such materials.
(b) Conduct of Business. Tarus [sic] and Cedar Mountain shall continue to
conduct their business in conformity with established industry practice in a
diligent manner and
will use their best efforts to preserve intact their present business
organizations and preserve their relationships with persons having business
dealings with them.
(c) No Mergers. Tarus and Cedar Mountain will not merge or consolidate
with any other corporation, or acquire any stock or, except in the ordinary
course of business, any business, property or assets of any other person, firm,
association, corporation or other business organization.
(d) No Securities Issuances. Tarus and Cedar Mountain will not issue any
shares of any class of their capital stock, or enter into any contract, or grant
any option, warrant or right, calling for the issuance of any such shares, and
will not create or issue any securities convertible into any such shares or
convertible into securities in turn so convertible or enter into any contract,
or grant any option, warrant or right, calling for the issuance of any such
convertible securities.
Section 4.3. Stockholder Approval of Tarus.
Tarus acknowledges and represents that the execution of this Agreement by
Xxxxx X. Xxxxx as the sole shareholder of Tarus, shall constitute all necessary
shareholder approval of the transaction contemplated hereby as is necessary
under Kansas law. Xxxxx X. Xxxxx further acknowledges and represents that the
shares of Cedar Mountain he or his assigns may acquire as a result of the
Exchange contemplated herein are being acquired for investment purposes only and
not with a view toward their redistribution or re-offering. All stock
certificates representing shares of Cedar Mountain issued to the shareholders of
Tarus shall be endorsed with the following restrictive legend:
The shares represented by this certificate have not been registered
under the Securities Act of 1933. The shares have been acquired for
investment and may not be offered, sold or otherwise transferred in the
absence of an effective registration statement for the shares under the
Securities Act of 1933, or a prior opinion of counsel satisfactory to the
issuer, that registration is not required under the Act.
Cedar Mountain shall obtain approval of the Exchange by consent of a
majority of the shareholders in interest without a shareholder meeting as
provided by Nevada law.
ARTICLE V
CONDITIONS TO OBLIGATIONS OF CEDAR MOUNTAIN AND TARUS
Section 5.1. General Conditions.
The obligations of the parties hereto to effect the Exchange shall be
subject to the following conditions:
(a) No Governmental Proceedings. No governmental action or proceeding
shall have been instituted or be threatened at the Closing Date by or before a
court or other governmental body, agency or authority to restrain or prohibit
the transactions contemplated by this Agreement.
(b) No Litigation. There shall be no litigation pending at the Closing
Date challenging the authority of either Tarus or Cedar Mountain or the officers
or directors of either to enter into this Agreement or seeking to restrain or
prohibit the transactions contemplated hereby, which the Board of Directors of
either Tarus or Cedar Mountain shall reasonably believe to present a substantial
risk either of restraining or prohibiting such transactions or of resulting in
the award of material damages or other relief.
(c) Statutory Requirements and Approvals. All statutory requirements for
the valid consummation by Tarus and Cedar Mountain of the transactions
contemplated by this Agreement and the Plan shall have been fulfilled; no
approvals of the transactions contemplated by this Agreement shall be required
from any federal or state governmental agency or authorities.
Section 5.2. Conditions of Obligation of Cedar Mountain.
(a) Representations and Warranties of Tarus to be True. The
representations and warranties of Tarus herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time, except to the extent waived hereunder or affected by the transactions
contemplated herein; Tarus shall have performed all obligations and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date; and Tarus shall have
delivered to Cedar Mountain a certificate of Tarus in form and substance
satisfactory to Cedar Mountain, dated the Closing Date and signed by its
President or Vice President to all such effects.
(b) Certificate of Xxxxx X. Xxxxx. Cedar Mountain shall have received a
certificate dated the Closing Date and signed by Xxxxx X. Xxxxx to all such
effects and to the effect that the statements contained in the Tarus certificate
described above and in any other written documents delivered by or on behalf of
Tarus pursuant to the provisions of this Agreement constitute representations
and warranties of Tarus under this Agreement to the same extent as if herein set
forth in full.
(c) Letter from Xxxx Xxxxxxxx, dated as of the Closing Date, that after
reading the unaudited financial statements of March 31, 2000 and for the period
from March 31, 2000 to the date not more than five business days prior to the
delivery of such letter; and making inquiries of certain officials of Tarus who
have
responsibility for financial and accounting matters regarding the specific items
for which representations are requested below; nothing has come to his attention
as a result of the foregoing procedures that cause him to believe that at the
date of the latest available interim financial statements there was nay change
in the capital stock or long-term debt of Tarus or any decreases in net current
assets or net assets or
Section 5.3. Conditions of Obligation of Tarus.
The obligation of Tarus to effect the Exchange shall be subject to the
following conditions:
(a) Representations and Warranties of Cedar Mountain to e True. The
representations and warranties of Cedar Mountain herein contained shall be true
in all material respects at the Closing Date with the same effect as though made
at such time, except to the extent waived hereunder or affected by the
transactions contemplated herein; Cedar Mountain shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it prior to the Closing Date; and
Cedar Mountain shall have delivered to Tarus a certificate of Cedar Mountain in
form and substance satisfactory to Tarus, dated the Closing Date and signed by
its President and its principal financial officer, to all such effects.
ARTICLE VI
INDEMNIFICATION
Section 6.1. Continuation of Representation and Warranties.
Cedar Mountain and Tarus agree that the representations, warranties and
covenants of Cedar Mountain and Tarus contained herein or in any instrument or
certificate delivered hereunder shall survive the Effective Date of the
Exchange, regardless of any investigation or inquiry by or on behalf of Cedar
Mountain and Tarus.
Section 6.2. Indemnification by Tarus.
Tarus agrees to indemnify and hold harmless Cedar Mountain and each person,
if any, who controls Cedar Mountain within the meaning of Section 15 of the 1933
Act against any and all losses, liabilities, claims, damages and expenses
(including interest, expenses of litigation and attorneys' fees) arising out of
or as a result of any inaccuracy or breach of any of the representations,
warranties and covenants of Tarus contained in this Agreement and contained in
any instrument, schedule or certificate delivered to Cedar Mountain pursuant to
this Agreement, or the defense or settlement of any claim asserted against Cedar
Mountain challenging any such representation, warranty and covenant, or
the failure or default of Tarus to perform or observe any covenant or condition
under this Agreement.
Section 6.3. Indemnification by Cedar Mountain.
Cedar Mountain agrees to indemnify and hold harmless Tarus and each person,
if any, who controls Tarus against any and all losses, liabilities, claims,
damages and expenses (including interest, expenses of litigation and attorneys'
fees) arising out of or as a result of any inaccuracy or breach of any of the
representations, warranties and covenants of Cedar Moutnain contained in this
Agreement and contained in any instrument or certificate, delivered to Tarus
pursuant to this Agreement, or the defense or settlement of any claim asserted
against Tarus challenging any such representation, warranty and covenant, or the
failure or default of Cedar Mountain to perform or observe any covenant or
condition under this Agreement.
Section 6.4. Notice.
Each indemnified party shall give prompt notice to each indemnifying party
of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to do so notify an indemnifying party shall not relieve
it from any liability which it may have otherwise than on account of this
Agreement. An indemnifying party may participate at its own expense in the
defense of such action. In no event shall the indemnifying parties be liable for
the fees and expenses of more than one counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
ARTICLE VII
MODIFICATION, WAIVERS AND ABANDONMENT
Section 7.1. Modification.
Tarus and Cedar Mountain may, by mutual consent of the respective Board of
Directors, amend, modify or supplement this Agreement in such manner as may be
mutually agreed upon in a writing executed by Tarus and Cedar Mountain at any
time before or after action hereon by the stockholders of Tarus and Cedar
Mountain; provided, however, that no such amendment, modification or supplement
shall affect the rights of the stockholders of Tarus or Cedar Mountain in a
manner which is materially adverse to such stockholders in the judgment of the
Board of Directors or Tarus and Cedar Mountain, respectively.
Section 7.2. Waivers.
Each of Tarus and Cedar Mountain may, pursuant to action by its respective
Board of Directors, by an instrument in writing , extend the time for or waive
the performance of any of the obligations of the other or waive compliance by
the other with any of the covenants or conditions contained herein; provided,
however, that no such waiver or extension shall affect the rights of the
stockholders of Cedar Mountain or Tarus in an manner which would be materially
adverse to such stockholders.
Section 7.3. Abandonment.
The Exchange may be abandoned before the Closing Date of the Exchange
without liability on the part of any party hereto exercising such right of
abandonment or restriction on the future activities of either party hereto.
(a) Mutual Consent. By the mutual consent of the Boards of Directors of
Cedar Mountain and Tarus evidenced by a writing by Cedar Mountain and Tarus or;
(b) Lapse of Time. By the Board of Directors of Cedar Mountain or Tarus if
the Effective Date has not occurred on or prior to August 31, 2000; provided,
however, that such date shall be extended for up to twenty-five (25) days in the
event an order restraining or prohibiting the Exchange has been issued by any
public authority or court.
The power of abandonment provided for by this Section 7.3 may be exercised
by Cedar Mountain or Tarus only by their respective Boards of Directors and will
be effective only after written notice thereof, signed on behalf of the party
for which it is given by its Chairman of the Board or President, shall have been
given to the other. If the Exchange shall be abandoned, no articles of exchange
or certificates relating to the Exchange shall be filed by the officers of any
such party in the States of Nevada and Kansas. Abandonment shall not effect any
rights theretofore accruing hereunder.
ARTICLE VIII
ADDITIONAL MATTERS
Section 8.1. Management.
The parties agree that the respective corporations to the Exchange shall
continue to have the same management after the contemplated Exchange that they
had prior to the Exchange.
Section 8.2. Closing.
The Closing of the Exchange contemplated by this Agreement shall take
place at such time and place as may be convenient to all the parties but in no
event later than August 31, 2000. At the Closing Tarus and Cedar Mountain shall
deliver and exchange the certificates specified in Sections 5.2(a) and 5.3(a) of
this Agreement.
Section 8.3. Notices.
All notices, requests, demands and other communications which are required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given when delivered personally or when mailed by registered or certified mail,
postage pre-paid, as follows:
If to Cedar Mountain to:
c/o Xxxxx X. Xxxxx
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
If to Tarus to:
c/o Xxxxx X. Xxxxx
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxx 00000
Section 8.4. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Nevada.
Section 8.5. Entire Agreement.
This Agreement supersedes any and all oral or written agreements heretofore
made relating to the subject matter hereof and constitutes the entire agreement
of the parties in relation to the subject matter hereof.
Section 8.6. No Implied Rights or Remedies.
Except as otherwise expressly provided herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or to given any person,
firm or corporation, other than Cedar Mountain and Tarus and their stockholders,
any rights or remedies under or by reason of this Agreement.
Section 8.7. Headings.
The headings in this Agreement are inserted for convenience of reference
only and shall not be part of, or control or affect the meaning of this
Agreement.
Section 8.8. Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF, each of the parties hereof has caused this Agreement to
be executed on its behalf and attested by its officers thereunto duly
authorized, all as of the date and year first above written.
CEDAR MOUNTAIN DISTRIBUTORS INC.,
A NEVADA CORPORATION
BY: /s/ XXXXX X. XXXXX
---------------------------------
XXXXX X. XXXXX
PRESIDENT
TARUS INTERNATIONAL, INC.,
A KANSAS CORPORATION
BY: /s/ XXXXX X. XXXXX
---------------------------------
XXXXX X. XXXXX
PRESIDENT
