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Agreement and Plan of Reorganization

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Title:

Agreement and Plan of Reorganization

Entities:

Oxford Media, Inc.; Paul, Hastings, Janofsky & Walker

Date:

2005

Size:

Preview shows 62KB of 257KB total

Price:

$64

ID:

#1449201

► Plans ► Agreements ► Agreements & Plans of Reorganization
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AGREEMENT AND PLAN OF REORGANIZATION

CREATIVE BUSINESS CONCEPTS, INC.

as the Purchaser

of 100% of the Issued and Outstanding Stock

IT NETWORKS, INC.

September 19, 2005

AGREEMENT AND PLAN OF REORGANIZATION

PARTIES

THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement), is entered into effective as of the 1st day of September, 2005 (the Effective Date), by and between CREATIVE BUSINESS CONCEPTS, INC., a California corporation (CBC); IT NETWORKS, INC., a California corporation (IT NET); and, the persons and entities named on the signature page hereof designated as the shareholders of IT NET (each a Shareholder, and collectively referred to herein as the Shareholders). CBC, IT NET, and the Shareholders are sometimes referred to collectively herein as the Parties, and each individually as a Party.

RECITALS

A. IT NET has issued and outstanding one thousand (1,000) shares of common stock, par value $0.00 per share (the IT NET Stock), constituting all of the issued and outstanding capital stock of IT NET.

B. The Shareholders are the owners and registered holders of one hundred percent (100%) of the IT NET Stock, with each Shareholder being the holder of the number of shares of IT NET Stock set forth opposite his name on Schedule II-B, attached hereto and incorporated herein by reference.

C. CBC desires to acquire all of the IT NET Stock on the terms and conditions provided herein solely in exchange for voting common stock of CBC, or the stock of CBCs corporate parent, making IT NET a wholly-owned subsidiary of CBC.

D. The Shareholders desire to sell to CBC all of the issued and outstanding shares of IT NET Stock on the terms and conditions provided herein.

E. IT NET is the successor-in-interest to IT NETWORK PARTNERS, LLC, a California limited liability company (the Predecessor LLC), which was converted into IT NET (the Conversion) as of and on the 1^st day of June, 2005 (the Conversion Date).

F. The Parties intend that the transactions envisioned hereunder be treated as a tax free plan of reorganization under Section 368(a) (1) (B) of the Code.

G. NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

III

SELECTED DEFINED TERMS AND INTERPRETATION

3.1 Definitions. The following capitalized terms shall have the respective meanings specified in this Article III. Other terms defined elsewhere herein shall have meanings so given them.

3.1.1. Affiliate. Affiliate shall mean a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person.

3.1.2. Control. Control (including the terms controlled by and under common control with) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

3.1.3. Code. Code shall mean the Internal Revenue Code of 1986, as amended from time-to-time, and the rules and regulations thereunder.

3.1.4. Intellectual Property. Intellectual Property (also referred to as Intellectual Property Assets) shall mean and include the following, as well as all other general intangibles of a like nature and all (i) goodwill, and (ii) confidential data or information relating to the below listed items:

(a) IT NETs full legal name and all derivations thereof used by IT NET, all fictional business names, trading names, designs, registered and unregistered trademarks, registered and unregistered service marks, and applications (collectively, the Marks);

(b) All patents, patent applications, and inventions and discoveries that may be patentable (collectively, the Patents);

(d) All rights in mask works (collectively, the Rights in Mask Works); and

(e) All know-how, trade secrets, confidential information, customer lists, computer software, databases, source codes, object codes, works of authorship, know-how, technical information, data, process technology, user interfaces, proprietary concepts, ideas, techniques, business models and methodologies, plans, drawings, and blue prints owned, used, or licensed by IT NET as licensee or licensor (collectively, the Trade Secrets).

3.1.5 Knowledge. Knowledge shall mean actual knowledge after reasonable investigation.

3.1.6. Material Adverse Change. Material Adverse Change shall mean a change which results in a Material Adverse Effect.

3.1.7. Material Adverse Effect. Material Adverse Effect shall mean the following meaning:

(a) with respect to CBC, (i) a material adverse effect (whether taken individually or in the aggregate with all other such effects) on the financial condition, business, results of operations or properties of CBC; (ii) an effect which would materially impair CBCs ability to timely to consummate the transactions contemplated under this Agreement; or, (iii) any event, circumstance or condition affecting CBC which would prevent or materially delay the consummation of the transactions contemplated under this Agreement;

(b) with respect to IT NET, (i) a material adverse effect (whether taken individually or in the aggregate with all other such effects) on the financial condition, business, results of operations or properties of IT NET; (ii) an effect which would materially impair IT NETs ability timely to consummate the transactions contemplated under this Agreement; or, (iii) any event, circumstance or condition affecting IT NET which would prevent or materially delay the consummation of the transactions contemplated by this Agreement; and

(c) with respect to the Shareholders, (i) an effect which would materially impair such Shareholders ability timely to consummate the transactions contemplated under this Agreement; (ii) an effect which would materially impair such Shareholders ability to timely to consummate the transactions contemplated under this Agreement; or, (iii) any event, circumstance or condition affecting such Shareholder which would prevent or materially delay the consummation of the transactions contemplated under this Agreement

3.1.8. Ordinary Course of Business. Ordinary Course of Business shall mean the course of business procedures and practices consistent with past custom and practice (including with respect to quantity and frequency).

3.1.9. CBCs SEC Filings. CBCs SEC Filings shall mean CBCs registration statement on Form SB-2, including Part II and the list of exhibits thereto (copies of which exhibits are available to Shareholders upon request to CBCs Chief Financial Officer) and CBCs Form 10-SB recently filed with SEC.

3.1.10. Person. Person means an individual, partnership, limited liability company, corporation, association, joint stock company, trust, a joint venture, unincorporated organization, or any other type of entity.

3.1.11. SEC. SEC shall mean the Securities and Exchange Commission.

3.1.12. Securities Act. Securities Act shall mean the Securities Act of 1933, as amended.

3.1.13. Tax or Taxes. Tax or Taxes shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits,

withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.

3.1.14. Tax Return. Tax Return shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

3.2. Accounting Terms and Determinations. All accounting terms used in this Agreement and not otherwise defined shall have the meaning accorded to them in accordance with GAAP and, except as expressly provided herein, all accounting determinations shall be made in accordance with GAAP, consistently applied. When used herein, the term financial statements shall include the notes and schedules attached thereto. The term GAAP means generally accepted accounting principles consistently applied as in effect from time to time.

3.3 Additional Definitional Provisions. For purposes of this Agreement, (i) those words, names, or terms which are specifically defined herein shall have the meaning specifically ascribed to them; (ii) wherever from the context it appears appropriate, each term stated either in the singular or plural shall include the singular and plural; (iii) wherever from the context it appears appropriate, the masculine, feminine, or neuter gender, shall each include the others; (iv) the words hereof, herein, hereunder, and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole, and not to any particular provision of this Agreement; (v) all references to designated Articles, Sections, and to other subdivisions are to the designated Articles, Sections, and other subdivisions of this Agreement as originally executed; (vi) all references to Dollars or $ shall be construed as being United States dollars; (vii) the term including is not limiting and means including without limitation; and, (viii) all references to all statutes, statutory provisions, regulations, or similar administrative provisions shall be construed as a reference to such statute, statutory provision, regulation, or similar administrative provision as in force at the date of this Agreement and as may be subsequently amended.

3.4 Interpretation.

3.4.1. Provision Not Construed Against Party Drafting Agreement. This Agreement shall be deemed to have been drafted by all Parties, and, in the event of a dispute, no Party shall be entitled to claim that any provision should be construed against any other Party by reason of the fact that it was drafted by one particular Party.

3.4.2. Number and Gender. The singular when used in this Agreement shall include the plural, and the masculine gender shall include the feminine and neuter genders, unless the context clearly indicates otherwise.

3.4.3. Incorporation of Exhibits and Schedules. The Exhibits and Schedules identified in this Agreement are incorporated herein by reference and made a part hereof as if set out in full herein.

3.4.4. Article and Section Headings. The article and section headings used in this Agreement are inserted for convenience and identification only and are not to be used in any manner to interpret this Agreement.

3.4.5. Severability. Each and every provision of this Agreement is severable and independent of any other term or provision of this Agreement. If any term or provision hereof is held void or invalid for any reason by a court of competent jurisdiction, such invalidity shall not affect the remainder of this Agreement.

EXCHANGE

4.1 Exchange of Shares. On the Closing Date (as hereinafter defined) and subject to the terms and conditions set forth herein, (i) the Shareholders shall transfer, assign, and deliver to CBC all of the then issued and outstanding shares of the IT NET Stock, and (ii) CBC shall issue to the Shareholders in exchange therefore (the Exchange) an aggregate of four hundred thousand (400,000) shares of the voting common stock, zero ($0.0) par value per share, of CBC or an equal number of shares of common stock of CBCs corporate parent (the CBC Stock). The number of shares of CBC Stock to be issued to each Shareholder will be determined by multiplying the aggregate number of shares of CBC Stock to be issued to the Shareholders as determined in accordance with the preceding sentence, by a fraction, the numerator of which is the number of IT NET Stock held by such Shareholder and the denominator of which is the total number of IT NET Stock then outstanding. Schedule II-B sets forth the number of shares of CBC Stock to be issued to each Shareholder in the Exchange, based on the current holdings of IT NET Stock by the respective Shareholders. In the event of any stock split, dividend paid in stock, recapitalization or reclassification with respect to CBC Stock prior to the Closing, the number of CBC Stock (and if appropriate the type of security) will be appropriately adjusted.

4.2 Fractional Shares. No fractions of CBC Stock will be issued in connection with CBCs issuance of CBC Stock in the Exchange. In lieu of the issuance of any such fractional share, CBC will issue to the Shareholder who would otherwise be entitled to receive such fractional share an amount of CBC Stock rounded to the nearest whole number of CBC Stock to which such Shareholder would otherwise be entitled to receive pursuant to this Section 4.2.

4.3 Closing. Subject to the terms and conditions of this Agreement, the closing of the Exchange (the Closing) shall take place (a) at the offices of CBC, 1 Technology Drive, Building H, Irvine, California, 92618, at 1000 AM PST on the 1^st day of September, 2005, or at such other time, date or place as the Parties hereto may agree. The date on which the Closing occurs is hereinafter referred to as the Closing Date.

4.4 Delivery of Share Certificates. At the Closing, CBC shall deliver to each of the Shareholders, or the duly authorized agent of any Shareholder, share certificates representing shares of CBC Stock in the respective amounts to which each is entitled in accordance with Sections 4.1 and 4.2, above, against delivery to CBC of certificates for the IT NET Stock to be transferred in the Exchange, duly endorsed or accompanied by stock powers duly executed in blank, with signatures

guaranteed by an entity whose guaranty is acceptable for the transfer of shares of CBC Stock. Each Shareholder shall provide to CBC in writing prior to the Closing Date such Shareholders mailing address, taxpayer identification number and any other shareholder information normally required by the transfer agent and registrar of CBC Stock.

4.5 Tax-Free Reorganization. The Parties intend that the Exchange be treated as a tax free plan of reorganization under Section 368(a) (1) (B) of the Code, with the CBC Stock issued in the Exchange to be issued solely in exchange for the IT NET Stock, and no other consideration that could constitute other property within the meaning of Section 356(a) of the Code being transferred by CBC for the IT NET Stock. The Parties shall not take a position on any Tax Return or before any taxing authority that is inconsistent with this Section 4.5 unless otherwise required by a final and binding determination or resolution of a governmental body with appropriate jurisdiction, and each Party agrees to promptly notify the other Party of any assertion by a taxing authority of a position that is inconsistent with this Section 4.5. No Party represents or warrants that the Exchange and the other transactions contemplated under this Agreement will qualify as reorganization under the Code.

REPRESENTATIONS AND WARRANTIES OF CBC

CBC hereby represents and warrants to the Shareholders as follows upon execution of this Agreement and at Closing:

5.1 Organization and Good Standing. CBC is a corporation duly organized, validly existing and in good standing under the laws of the State of California.

5.2 Subsidiaries. Schedule 5.2, attached hereto and incorporated herein by reference, sets forth for each subsidiary of CBC (i) its name and jurisdiction of incorporation, and (ii) the percentage of such Persons issued and outstanding shares of capital stock owned by CBC.

5.3 Authorization.

5.3.1. Operation of Business. CBC has the requisite corporate power and authority and all requisite licenses, permits and franchises necessary to own and operate its properties and to carry on its business as now being conducted.

5.3.2 Execution of Agreement. CBC has the requisite corporate power and authority and has obtained all approvals and consents necessary to enter into and carry out the terms and conditions of this Agreement, as well as all transactions contemplated hereunder. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary to authorize the execution, delivery, and performance by CBC of this Agreement. This Agreement has been duly and validly executed and delivered by CBC and constitutes the valid and binding obligations of CBC, enforceable in accordance with the respective terms.

5.4 Effect of Agreement. As of the Closing, the consummation by CBC of the transactions herein contemplated, including the execution, delivery and consummation of this Agreement, will comply with all applicable law and will not:

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