EXHIBIT 2.1
AGREEMENT OF REORGANIZATION
By and Between
DIGITAL SIGN CORPORATION
A Delaware Corporation,
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
As SHAREHOLDERS
and
DIGITAL SIGNS, INC.
A California Corporation
AGREEMENT OF REORGANIZATION
THIS AGREEMENT is made effective February 14, 1998, at San Diego,
California, by and between DIGITAL SIGN CORPORATION, a Delaware Corporation
(hereinafter referred to as "DIGITAL SIGN CORPORATION"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III,
hereinafter referred to as "SHAREHOLDERS"), and DIGITAL SIGNS, INC. a California
Corporation (hereinafter referred to as the "CORPORATION").
WHEREAS, the SHAREHOLDERS have represented that they own all of the
outstanding stock of the CORPORATION, and
WHEREAS, DIGITAL SIGN CORPORATION desires to acquire from the SHAREHOLDERS
and the SHAREHOLDERS desire to exchange stock with Digital Signs, Inc., which
are 100% of the outstanding stock of the CORPORATION ("the shares"), and
WHEREAS, the CORPORATION desires that this transaction be consummated.
NOW, THEREFORE, in consideration of the mutual covenants, promises,
conditions, agreements, representations and warranties contained in this
Agreement, setting aside all previous agreements both oral and written the
parties agree as follows:
1. PURCHASE AND SALE OF SHARES
1.1. The parties hereto adopt this Agreement as a Type B tax-free plan of
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code.
1.2. Subject to the terms and conditions set forth in this Agreement, on
the closing, SHAREHOLDERS will transfer and convey to DIGITAL SIGN CORPORATION,
10,000 shares of common stock in the CORPORATION which represents 100% of the
issued and outstanding shares of stock in the CORPORATION.
1.3. As consideration for the transfer of the shares by SHAREHOLDERS,
DIGITAL SIGN CORPORATION shall deliver at the closing, certificates representing
100,000 shares of DIGITAL SIGN CORPORATION'S common stock.
1.4. The 100,000 shares of DIGITAL SIGN CORPORATION' common stock shall be
issued in the amount following each SHAREHOLDER'S name in Schedule "A".
2. REPRESENTATIONS AND WARRANTIES OF THE PARTIES
2.1. The SHAREHOLDERS represent and warrant that the SHAREHOLDERS are
owners, beneficially and of record, of all the shares free and clear of liens,
encumbrances, security agreements, equities, options, claims charges, and
restrictions, other than any
restriction set forth by the California Commissioner of Corporations.
SHAREHOLDERS have full power to transfer the shares to DIGITAL SIGN CORPORATION
without obtaining the consent or approval of any other person, governmental
authority or the Corporation.
2.2. The SHAREHOLDERS and the CORPORATION to the best of their knowledge,
represent and warrant as follows:
a. CORPORATION is a corporation duly organized validly existing, and
in good standing under the laws of California and has all
necessary corporate powers to own its properties and to operate
its business as now owned and operated by it.
b. The authorized capital stock of the CORPORATION consists of
1,000,000 shares of common stock, having a par value of $0.0001,
of which 10,000 shares (the shares) are issued and outstanding.
All the shares are validly issued, fully paid, and
non-assessable, and such shares have been so issued in full
compliance with all federal and state securities laws. There are
no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments
obligating the CORPORATION to issue or to transfer from treasury
any additional shares of
its capital stock of any class.
c. That there is no suit, action, arbitration, or legal
administrative, or other proceeding, to the best knowledge of
CORPORATION; against or effecting CORPORATION or any other
business, assets, or financial condition.
d. The financial statements in Exhibit B have been prepared in
accordance with generally accepted accounting principles
consistently followed by the CORPORATION as of the respective
dates of said financial statements, and the results of its
operation for the respective periods indicated.
e. That there has not been since the date of the attached financial
statements any material change in the financial condition,
liabilities, assets, business or prospects of the CORPORATION.
f. Since January 28, 1998, that within the times and in the manner
prescribed by law, the CORPORATION has filed all federal, state,
and local tax returns required by law and has paid all taxes
assessments, and penalties due and payable. There are not present
disputes as to taxes of any nature payable by the CORPORATION.
g. The CORPORATION is in possession of all premises leased to it
from others.
h. Neither the SHAREHOLDERS, nor any officer, director, or employee
of the CORPORATION, nor any spouse, child, or other relative of
any of these persons, owns, or has any interest, directly or
indirectly, in any of the real or personal property owned by or
leased to the CORPORATION. That the CORPORATION does not occupy
any real property in violation of any law, regulation, or decree.
i. The execution and delivery of this Agreement by the CORPORATION,
and the performance of its covenants and obligations under it,
shall have been duly authorized by all necessary corporate
action, and the CORPORATION shall have received copies of all
resolutions pertaining to that authorization, certified by the
secretary of the CORPORATION.
k. Each SHAREHOLDER is acquiring the stock of the CORPORATION as an
investment and not with a view to distribution, and each hereby
consents that the shares of the CORPORATION, may be legended to
the effect that such shares are not registered under the
Securities Act of 1933.
l. The CORPORATION has given no options or other rights to purchase
or subscribe for any shares of stock of the CORPORATION in favor
of any person, firm or corporation. Stockholders do not have
preemptive rights.
M. The CORPORATION has no assets or business other than those shown
in these financial statements.
n. The CORPORATION is not party to any employment agreements.
2.3 DIGITAL SIGN CORPORATION represents and warrants as follows:
a. DIGITAL SIGN CORPORATION is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware and has
all necessary corporate powers to own its properties and to
operate its business as now owned and operated by it; and neither
the ownership of its properties nor the nature of its business
requires DIGITAL SIGN CORPORATION to be qualified in any
jurisdiction other than the state of its incorporation.
b. The authorized capital stock of DIGITAL SIGN CORPORATION consists
of 50,000,000 shares of common
stock, having a par value of $0.00001 each, 3,850,000 of which
are issued and outstanding.Such shares have been so issued full
compliance with all federal and state securities laws. DIGITAL
SIGN CORPORATION has also authorized 20,000,000 shares of
preferred stock, having a par value of $0.00001, none of which
are issued. There are no outstanding subscriptions,options,
rights, warrants, convertible securities,or other agreements or
commitments obligating DIGITAL SIGN CORPORATION to issue or to
transfer from treasury any class of stock.
c. The financial statements in Exhibit A have been prepared in
accordance with generally accepted accounting principles
consistently followed by DIGITAL SIGN CORPORATION throughout the
periods indicated and fairly present the financial position of
DIGITAL SIGN CORPORATION as of the respective dates of said
financial Statements, and the results of its operations for the
respective periods indicated.
d. That there has not been since the date of the attached financial
statements any material change in the financial condition,
liabilities, assets, business or prospects of DIGITAL SIGN
CORPORATION.
e. That DIGITAL SIGN CORPORATION does not have any debt, liability,
or obligation of any nature, whether accrued, absolute,
contingent, or otherwise, and whether due or to become due, that
is not reflected in the financial statements or set forth in
Exhibit A to this Agreement, and that all debts, liabilities, and
obligations incurred after that date were incurred in the
ordinary course of business, and are usual and normal in amount
both individually and in the Agreement.
f. That the total liabilities on the part of DIGITAL SIGN
CORPORATION does not exceed the approximate amount of $1,000.00.
g. That within the times and in the manner prescribed by law,
DIGITAL SIGN CORPORATION has filed all federal, state, and local
tax returns required by law and has paid all taxes, assessments,
and penalties which in DIGITAL SIGN CORPORATION'S opinion are due
and payable and has made all filings required by all applicable
state and federal laws.
h. That DIGITAL SIGN CORPORATION has good and marketable title to
all of its respective assets and interests in assets, whether
real, personal, mixed, tangible, and intangible, which constitute
all the
assets and interests in assets that are used in the business of
DIGITAL SIGN CORPORATION. All these assets are free and clear of
restrictions or of conditions of transfer or assignment, and free
and clear of mortgages, liens, pledges, charges, encumbrances,
equities, claims, easements, rights of way, covenants, conditions
or restrictions, except for (i) these disclosed in DIGITAL SIGN
CORPORATION financial statements in Exhibit A to this Agreement;
(ii) the lien of current taxes not yet due and payable; and (iii)
possible minor matters that in the aggregate, are not substantial
in amount and do not materially detract from or interfere with
the present or intended use of any of these assets, nor
materially impair business operations. All real property and
tangible personal property of DIGITAL SIGN CORPORATION is in good
operating condition and repair, ordinary wear and tear excepted.
DIGITAL SIGN CORPORATION is in possession of all premises leased
to it from others.
i. That there is no suit, action, arbitration, or legal
administrative, or other proceeding, or governmental
investigation pending or, to the best knowledge DIGITAL SIGN
CORPORATION threatened, against or affecting DIGITAL SIGN
CORPORATION, or any of its business, assets, or financial
condition.
j. The execution and delivery of this Agreement by DIGITAL SIGN
CORPORATION and the performance of its covenants and obligations
under it, shall have been duly authorized by all necessary
corporate action, and SHAREHOLDERS have received copies of all
resolutions pertaining to that authorization, certified by the
secretary of DIGITAL SIGN CORPORATION.
k. That they have had an opportunity to review the financial
statements in Exhibits B to this Agreement and based upon such
financial statements they have .entered into this Agreement.
3. DOCUMENTATION, DELIVERY AND COOPERATION
3.1. The CORPORATION will furnish to DIGITAL SIGN CORPORATION for its
examination (i) copies of the Article of Incorporation and By-Laws of the
CORPORATION; (ii) the minute books of the CORPORATION containing all records
required to be set forth of all proceedings, consents, actions, and meetings of
the SHAREHOLDERS and Boards of Directors of the CORPORATION; (iii) all permits,
orders, and consents issued with Respect to corporation, or any security, and
all applications for such permits, orders, and consents; and (iv) the stock
transfer books of the CORPORATION setting forth all transfers of any capital
stock.
3.2. At the closing, the SHAREHOLDERS shall deliver to DIGITAL SIGN
CORPORATION the following instruments, in form and substance satisfactory to
DIGITAL SIGN CORPORATION and its counsel:
a. A certificate or certificates representing the shares, registered
in the names of the SHAREHOLDERS, duly endorsed by the
SHAREHOLDERS transfer or accompanied by an assignment of the
shares duly executed by the SHAREHOLDERS. On submission of that
certificate or certificates to the CORPORATION for transfer, the
CORPORATION shall issue to DIGITAL SIGN CORPORATION a certificate
representing the shares, registered in the name of DIGITAL SIGN
CORPORATION.
b. The stock books, stock ledgers, minute books, and corporate seals
of the CORPORATION, and;
3.3. At the closing, DIGITAL SIGN CORPORATION shall deliver to SHAREHOLDERS
the following instruments and documents:
a. The share certificates as set forth in paragraph 1.3.
3.4. All of the parties further agree that they will do all things
necessary and reasonable to accomplish and facilitate the
transfer of the shares in conformance with any and all governmental bodies and
regulatory agencies, and that they will sign and execute any and all documents
necessary to bring about and perfect the purposes of the Agreement.
4.1. The obligations of the SHAREHOLDERS hereunder are, at the option of
the SHAREHOLDERS, subject to the conditions that on or before the Closing:
a. The SHAREHOLDERS shall not have discovered any material error, or
misstatement or omission in the representations, and warranties
made by DIGITAL SIGN COPORATION herein, and all the terms and
conditions of this Agreement to be complied with and performed by
DIGITAL SIGN COROPRATION at or before the Closing shall have been
complied with and performed in all material respects.
b. The representations and warranties made by DIGITAL SIGN
CORPORATION in this Agreement shall be correct in all material
respects at and as of the Closing.
c. The Commissioner of Corporations of the State of California has
issued, if necessary, the appropriate permit or permits pursuant
to the California Corporations Code the qualification of the
securities which are the subject of this Agreement.
4.2. The obligations of DIGITAL SIGN CORPORATION hereunder are, at the
option of DIGITAL SIGN CORPORATION, subject to the conditions that on
or before the Closing:
a. DIGITAL SIGN CORPORATION shall not have discovered any material
error, misstatement or omission in the presentations and
warranties made by the SHAREHOLDERS of the CORPORATION, and all
the terms and conditions of this Agreement to be complied with
and performed by the SHAREHOLDERS and the CORPORATION on or
before the Closing shall have been complied with and performed in
all material respects.
b. The representations and warranties made by the SHAREHOLDERS and
the CORPORATION in this Agreement shall be correct in all
material respects at and as of the Closing.
c. The Commissioner of Corporations of the State of California has,
if necessary, issued the appropriate permit or permits pursuant
to the California Corporations Code for the qualification of the
securities which are the subject of this Agreement.
4.3. The Closing under this Agreement shall take place at the law offices
of ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇. ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at such place, time or date, as may
be agreed upon by the parties.
This Agreement may be signed in one or more counterparts.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
DIGITAL SIGN CORPORATION DIGITAL SIGNS, INC.
(a Delaware Corporation) (a California Corporation)
STOCKHOLDERS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III
EXHIBIT A
SELECTED FINANCIAL INFORMATION
SUMMARY BALANCE SHEET DATA: February 13, 1998
Current Assets: $ 0.00
Other Assets: $ 0.00
Total Assets: $ 0.00
Total Liabilities: $ 0.00
Shareholders Equity $ 0.00
SUMMARY STATEMENT OF OPERATIONS DATA:
(for period ending Feb. 14, 98)
Total Income $ 0
Net Loss $ 0
Net Loss Per Share: $ 0
Exhibit B
SELECTED FINANCIAL INFORMATION
SUMMARY BALANCE SHEET DATA: February 13, 1998
Current Assets
Cash On Hand $ 000400
Computer Equipment $ 000.00
Organization Expense $ 715.00
Total Assets: $ 715.00
Total Liabilities:. $ 0.00
Shareholders Equity. $ 715.00
SUMMARY STATEMENT OF OPERATIONS DATA:
(for period ending Feb. 14, 98)
Total Income $ 0
Net Loss $ 0
Net Loss Per Share: $ 0
Schedule A
Stock Aquired by Digital Stock Issued
Shareholders Signs, Inc. in Exchange
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 111 10,000 100,000