AGREEMENT
AND
PLAN OF REORGANIZATION
BY AND AMONG
VHS NETWORK, INC.
AND
VHS ACQUISITION, INC.
AND
VHS NETWORK (CANADA), INC.
================================================================================
Dated: April 10, 1997
Agreement and Plan of Reorganization ("Agreement"), dated as of April
__, 1997, by and among VHS Network, Inc., a Florida corporation ("VHS Network");
VHS Acquisition, Inc., a Florida corporation ("VHS Acquisition") and VHS Network
(Canada), Inc., a Canadian corporation ("VHS Network Canada").
BACKGROUND INFORMATION
----------------------
VHS Network and VHS Network (Canada) deem it advisable that VHS Network
Canada be merged into VHS Acquisition pursuant to this Agreement and in
accordance with the applicable statutes of the State of Florida. VHS Network,
VHS Network Canada and VHS Acquisition desire to adopt a plan of reorganization
within the meaning of Section 368(a)(2)(D) of the Internal Revenue Code of 1986,
as amended (the "Code"). Accordingly, in consideration of the promises contained
herein, VHS Network, VHS Acquisition and VHS Network Canada adopt this plan of
reorganization and agree as follows:
OPERATIVE PROVISIONS
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ARTICLE 1
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Merger
------
1.1 Transfer of Property and Liabilities. Upon the Effective Date (as
defined in Article 3 hereof) of the merger, the separate existence of VHS
Network Canada shall cease; all of the outstanding shares of stock of VHS
Network Canada shall be exchanged for and converted into shares of the common
stock of VHS Network and a promissory note issued by VHS Acquisition, as
hereinafter provided; and upon the filing of a Certificate of Merger with the
Secretary of State of the State of Florida, VHS Acquisition shall possess all
the rights, privileges, immunities, powers and purposes, and all property,
causes of action and every other asset of VHS Network Canada and shall assume
and be liable for all the liabilities, obligations and penalties of VHS Network
Canada, in accordance with Florida law.
1.2 Surviving Corporation. Following the merger, the existence of VHS
Acquisition shall continue unaffected and unimpaired by the merger, with all the
rights, privileges, immunities and powers, and subject to all the duties,
obligations and liabilities, of a corporation organized under the laws of
Florida. The Certificate of Incorporation and Bylaws of VHS Acquisition, as in
effect immediately prior to the Effective Date, shall continue in full force and
effect, and, except as provided in Article 1.3, shall not be changed in any
manner by the merger. The directors of VHS Acquisition immediately prior to the
Effective Date shall resign, however, immediately prior thereto they shall
appoint as their successors the persons set forth on Schedule 1.2.
1.3 Name. The name of VHS Acquisition shall be changed as of the
Effective Date to "VHS Network Canada, Inc."
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ARTICLE 2
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Conversion of Shares.
---------------------
2.1 Conversion Ratio. As a result of the merger contemplated by this
Agreement, the shareholder of VHS Network Canada will receive (a) 8,000,000
shares of the common capital stock of VHS Network (the "VHS Network Shares");
and (b) VHS Acquisition's secured promissory note for $500,000 (the "Note"). In
order to effect such conversion, the shares of VHS Network Canada's common stock
issued and outstanding immediately prior to the Effective Date (the "VHS Network
Canada Shares") shall be converted by the merger into the VHS Network Shares and
the Note. The Note shall bear interest at an annual rate of 8%. The Note shall
be amortized over a five year period following the Closing Date in equal monthly
installments. The Note shall be secured by all of the shares of VHS Acquisition.
2.2 Shares of VHS Acquisition. None of the issued shares of VHS
Acquisition shall be converted as a result of the merger and all of such shares
shall remain issued shares of capital stock of VHS Acquisition.
ARTICLE 3.
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Closing; Certificate of Merger.
-------------------------------
3.1 Closing. The Closing contemplated by Section 1.1 shall be held at
the offices of VHS Network, unless another place or date is agreed upon in
writing by the parties (the "Closing Date"). At the Closing, all documents
called for by this Agreement (the "Closing Documents") shall be executed by the
respective parties. VHS Network shall deliver to the shareholder of VHS Network
Canada the stock certificate for the VHS Network Shares, the Note and an
executed Stock Pledge Agreement in the form of Schedule 3.1 attached hereto. The
shareholder of VHS Network Canada shall deliver to VHS Acquisition the stock
certificate for the VHS Network Canada Shares and the books and records of VHS
Network Canada.
3.2 Certificate of Merger. After the Closing provided for in Section
3.1 above, the Certificate of Merger executed by the parties at Closing shall be
submitted for filing with the Secretary of State of Florida. The date of the
latter of such filing, or such other date as the parties may agree upon in
writing pursuant to applicable law, shall be the effective date of the Merger
(the "Effective Date").
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ARTICLE 4.
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Related Transactions and Additional Agreements.
-----------------------------------------------
4.1 Stock Purchase Agreement. VHS Network has entered into an agreement
to purchase 2,400,000 shares of the common stock of VHS Network from Srotnac
Group, LLC for $112,500, payable in cash, the closing of which shall be
consummated in accordance with the terms of that agreement.
4.2 Board of Directors of VHS Network. On the Effective Date the
existing Board of Directors shall appoint Elwin Cathcart and David Smelsky as
members to the Board of Directors of VHS Network and, immediately thereafter,
all other members of the Board of Directors of VHS Network shall resign, other
than Thomas Roberts.
4.3 Officers of VHS Network. On the Effective Date, all of the current
officers of VHS Network shall resign.
4.4 Offering Proceeds; Dividends. VHS Network intends to conduct an
offering of shares of its common stock (the "Offering") pursuant to the
transactional exemption from the registration provisions of the Securities Act
of 1933, as amended (the "Act") set forth in Rule 504 of Regulation D
promulgated by the Securities and Exchange Commission pursuant to the Act. It is
also the intention of VHS Acquisition, after the merger, to generate sufficient
funds to be able to pay a dividend to VHS Network. VHS Network will use the
proceeds of the Offering and the dividends that it receives from VHS Acquisition
to pay the following liabilities of VHS Network, prior to the payment of any
other liability of VHS Network: (a) checks returned for insufficient funds; (b)
Internal Revenue Service obligations; (c) product shipments; (d) Cumberland Bank
overdrafts; and (e) American Express obligations of VHS Network, in the
approximate amount of $50,000, the payment of which has been guaranteed by David
George.
4.5 Office Equipment and Furniture. The office equipment and furniture
set forth on Schedule 4.5 shall be transferred to David George, effective as of
the Closing. VHS Network will, within 30 days after the Closing, establish a
fair market value for the office equipment and furniture and, to the extent that
the fair market value of the equipment and furniture exceeds any indebtedness
secured by the office equipment and furniture which is assumed by Mr. George,
then the difference shall be credited against amounts owed to Mr. George by VHS
Network for accrued but unpaid salary.
4.6 Vehicles. VHS Network shall assign all of its rights to the
automobiles set forth on Schedule 4.6 to David George, subject to the
liabilities set forth on that schedule. VHS Network represents that the fair
market value of the automobiles is approximately equal to the indebtedness owed
by VHS Network and secured by the automobiles. David George shall use his best
efforts to cause VHS Network to be released from such liabilities.
4.7 Scheduling Debt Obligations. VHS Network will use its best efforts,
after the Closing, to amicably reschedule the payment of indebtedness to each of
John Baldwin, Daryl Dinkla and Thomas Roberts.
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ARTICLE 5
Representations and Warranties of
VHS Network Canada
VHS Network Canada represents and warrants to VHS Network and VHS
Acquisition as follows:
5.1 Organization, Power, Standing and Qualification. VHS Network Canada
is a corporation duly organized, validly existing, and in good standing under
the laws of Canada and has full corporate power and authority to carry on its
business as it is now being conducted and to own and operate the properties and
assets now owned and operated by it. VHS Network Canada is duly qualified to do
business and is in good standing in each and every jurisdiction where the
failure to qualify or to be in good standing would have an adverse effect upon
its financial condition, the conduct of its business or the ownership of its
assets.
5.2 Authority. VHS Network Canada has the power and authority to
execute, deliver and perform this Agreement; and this Agreement is a valid and
binding obligation of the VHS Network Canada, enforceable in accordance with its
terms, except as such enforcement may be limited by applicable bankruptcy,
insolvency, moratorium, or similar laws affecting the enforcement of creditors'
rights generally.
5.3 Validity of Contemplated Transactions; Interference. Other than as
provided in Schedule 5.3, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby do not
and will not (a) contravene any provision of the Certificate of Incorporation or
Bylaws of VHS Network Canada; (b) violate, be in conflict with, constitute a
default under, cause the acceleration of any payments pursuant to, or otherwise
impair the good standing, validity, or effectiveness of any material agreement,
contract, indenture, lease, or mortgage to which VHS Network Canada is a party;
(c) subject the assets of VHS Network Canada to any indenture, mortgage,
contract, commitment, or agreement, other than this Agreement; (d) reasonably
interfere with any other agreement to which VHS Network Canada is a party; or
(e) violate any material provision of law, rule, regulation, order, permit, or
license to which VHS Network Canada is subject.
5.4 Capitalization of VHS Network Canada. VHS Network Canada's
authorized capital stock consists of ______ shares of common stock, no par
value, _______ of which shares are presently outstanding, validly issued, fully
paid and non-assessable. There are no outstanding options, warrants, conversion
privileges, subscriptions, calls, commitments or rights of any character
relating to any authorized but unissued capital stock of VHS Network Canada.
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5.5 Title to Properties. VHS Network Canada has good, valid and
marketable title to all of its assets, free and clear of all mortgages, liens,
pledges, security interests and other encumbrances, except as otherwise set
forth on Schedule 5.5.
5.6 Absence of Undisclosed Liabilities. Except as provided in Schedule
5.6, VHS Network Canada has no material liabilities or obligations except for
those incurred in the ordinary course of business. Except as otherwise provided
in this Agreement, the term "liabilities or obligations" as used in this
Agreement shall include any direct or indirect indebtedness, claim, loss,
damage, deficiency (including deferred income tax and other net tax
deficiencies), cost, expense, obligation, guarantee, or responsibility, whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed, liquidated
or unliquidated, secured or unsecured.
5.7 Litigation; Compliance with Laws. There is no suit, action, claim,
arbitration, administrative or legal or other proceeding, or governmental
investigation pending or, to the knowledge of VHS Network Canada, threatened
against or related to VHS Network Canada. There has been no failure to comply
with, nor any default under, any law, ordinance, requirement, regulation, or
order applicable to VHS Network Canada or its business operations, nor any
violation of or default with respect to any order, writ, injunction, judgment,
or decree of any court or federal, state or local department, official,
commission, authority, board, bureau, agency, or other instrumentality issued or
pending against VHS Network Canada which in any such case would reasonable be
expected to have a material adverse effect on the financial condition, its
business, results of operations, properties or assets of VHS Network Canada.
5.8 Veracity of Statements. To the knowledge of VHS Network Canada, no
representation or warranty by VHS Network Canada contained in this Agreement and
no statement contained in any certificate, schedule or other instrument
furnished to VHS Acquisition pursuant hereto or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary to make it not misleading.
5.9 Acquisition of VHS Network Shares for Investment. The shareholder
of VHS Network Canada is acquiring the common stock of VHS Network for
investment purposes, for its own account and not with a view to the resale or
distribution thereof in violation of any state or federal securities laws. The
shareholder shall not sell, transfer, pledge or hypothecate any of the VHS
Network Shares in the absence of registration under or pursuit to an applicable
exception from, federal and all applicable security law.
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ARTICLE 6
---------
Representations and Warranties of VHS Network
---------------------------------------------
VHS Network and VHS Acquisition, jointly and severally, represent and
warrant to VHS Network Canada as follows:
6.1 Organization, Power, Standing and Qualification. VHS Network is a
corporation duly organized, validly existing and in good standing under the laws
in the State of Delaware and has full corporate power and authority to carry on
its business as it is now being conducted and to own and operate the properties
and assets now owned and operated by it.
6.2 Capitalization of VHS Network, Inc.. VHS Network's authorized
capital stock consists of 100,000,000 shares of common stock, $.01 par value,
and 25,000,000 shares of preferred stock, $.01 par value. Prior to the issuance
of the shares of common stock pursuant to this Agreement VHS Network had
12,481,000 shares of common stock issued and outstanding, which shares are
presently outstanding, validly issued, fully paid and non-assessable. VHS
Network has not issued any shares of its preferred stock or any options,
warrants or rights to acquire such shares.
6.3 Financial Statements. VHS Network has delivered to VHS Network
Canada its audited balance sheet for its fiscal year ended July 31, 1996 (the
"VHS Network Balance Sheet") as well as its consolidated statement of income and
loss for the year ended July 31, 1996, which have been prepared in accordance
with the applicable books and records of VHS Network and presents fairly the
financial condition of VHS Network as of July 31, 1996, and there has been no
material change in such financial condition of VHS Network since July 31, 1996,
except as otherwise set forth on Schedule 6.3.
6.4 Absence of Undisclosed Liabilities. VHS Network has no liabilities
or obligations except for those (i) reflected on the VHS Network Balance Sheet;
(ii) reflecting contractual liabilities or obligations incurred in the ordinary
course of business that are not required by generally accepted accounting
principles to be reflected in a balance sheet; (iii) incurred in the ordinary
course of business subsequent to the date of the VHS Network Balance Sheet and
not required to be disclosed pursuant to the terms of this Agreement; and (iv)
specifically disclosed in Schedule 6.4 attached hereto. Except as otherwise
provided in this Agreement, the term "liabilities or obligations" as used in
this Agreement shall include any direct or indirect indebtedness, claim, loss,
damage, deficiency (including deferred income tax and other net tax
deficiencies), cost, expense, obligation, guarantee, or responsibility, whether
accrued, absolute, or contingent, known or unknown, fixed or unfixed, liquidated
or unliquidated, secured or unsecured.
6.5 Certain Tax Matters. Except as disclosed on Schedule 6.5, VHS
Network has duly filed all federal, state, and local tax returns and reports
required to be filed by VHS Network for all periods ending on or prior to March
31, 1997 and all taxes, including income, gross receipts, and other taxes and
any penalties with respect thereto, shown thereon to be due and payable, have
been paid, withheld, or reserved for or are reflected as a liability in the VHS
Network Balance Sheet. The returns and reports are, to the best knowledge of VHS
Network, correct and complete. VHS Network has not entered into any agreements
for the extension of time for the assessment of any tax or tax delinquency, has
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received no outstanding or unresolved notices from the Internal Revenue Service
or any taxing body of any proposed examination or of any proposed deficiency or
assessment, and has properly withheld all amounts required by law to be withheld
for income taxes and unemployment taxes, including without limitation social
security and unemployment compensation, relating to its employees, and remitted
such withheld amounts to the appropriate taxing authority as required by law.
6.6 Litigation; Compliance with Laws. Except as set forth on Schedule
6.6, there is no suit, action, claim, arbitration, administrative or legal or
other proceeding, or governmental investigation pending or, to the knowledge of
VHS Network threatened against or related to VHS Network. There has been no
failure to comply with, nor any default under, any law, ordinance, requirement,
regulation, or order applicable to VHS Network or its business operations, nor
any violation of or default with respect to any order, writ, injunction,
judgment, or decree of any court or federal, state or local department,
official, commission, authority, board, bureau, agency, or other instrumentality
issued or pending against VHS Network which might have a material adverse effect
on the financial condition, its business, results of operations, properties or
assets of VHS Network.
6.7 No Changes. Except as set forth on Schedule 6.7, since July 31,
1996 there has not been:
a. Any change in the financial or other condition, assets,
liabilities or business of VHS Network, which individually or in the
aggregate has been materially adverse to VHS Network;
b. Any damage, destruction or loss (whether or not covered by
insurance) or any condemnation by governmental authorities which has or
may adversely affect the business or assets of VHS Network to a
material degree;
c. Any declaration, setting aside or payment of any dividend
or other distribution in respect of any of VHS Network's shares or any
direct or indirect redemption, purchase or other acquisition of VHS
Network's shares or any direct or indirect payment or incurring of
management fees or other transactions between the shareholders of VHS
Network and VHS Network; or
d. Any increase in the compensation payable or to become
payable by VHS Network to any of its officers, employees or agents, or
any known payment or arrangement made to or with any thereof, except in
the ordinary course of business.
6.8 Veracity of Statements. No representation or warranty by VHS
Network or VHS Acquisition contained in this Agreement and no statement
contained in any certificate, schedule or other instrument furnished to VHS
Network Canada pursuant hereto or in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary to make it not misleading.
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6.9 Copies of Articles of Incorporation, Bylaws and Stock Records. A
copy of VHS Network's Certificate of Incorporation, Bylaws and stock records
(certified by the Secretary of VHS Network) has been delivered to VHS Network
Canada and each is correct and in effect as at the date of this Agreement. A
copy of VHS Acquisition's Certificate of Incorporation, Bylaws and stock records
(certified by the Secretary of VHS Acquisition) has been delivered to VHS
Network Canada and each is correct and in effect as at the date of this
Agreement. Such books and records have been regularly and properly kept and are
complete, accurate and legally sufficient under applicable law.
6.10 Directors and Officers. Schedule 6.10 attached hereto is a true
and complete list as of the date of this Agreement showing the names of VHS
Network's directors and officers, each of whom has been duly elected.
ARTICLE 7
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INDEMNIFICATION
---------------
7.1 VHS Network Indemnification of VHS Network (Canada). From and after
the Effective Date, VHS Network shall indemnify and hold harmless VHS Network
(Canada) and its affiliates (collectively, the "Indemnitees") from and against
any and all damages, losses, obligations, deficiencies, liabilities, claims,
encumbrances, penalties, costs, and expenses, including reasonable attorneys'
fees (together, a "Loss") which the Indemnitees may suffer or incur, resulting
from, related to, or arising out of: (a) being an officer or director of VHS
Network; (b) the transactions contemplated by this Agreement; (c)
misrepresentation, breach of warranty, or nonfulfillment of any of the covenants
or agreements of VHS Network Canada in this Agreement or from any
misrepresentation in or omission from any certificate or document furnished or
to be furnished to the Indemnitees hereunder and (d) any and all actions, suits,
investigations, proceedings, demands, assessments, audits, judgments, and claims
(including employment-related claims) arising out of any of the foregoing;
provided, however, that before the Indemnitees may assert a claim for indemnity
under this Section, the Indemnitees must give or cause to be given written
notice of such claim to VHS Network as provided in Article 7.2.
7.2 Notice. Promptly after acquiring knowledge of any Loss or action,
suit, investigation, proceeding, demand, assessment, audit, judgment, or claim
against which the Indemnitees have been indemnified by VHS Network, the
Indemnitees shall give to VHS Network written notice thereof. VHS Network shall,
at its own expense, promptly defend, contest or otherwise protect against any
Loss or action, suit, investigation, proceeding, demand, assessment, audit,
judgment, or claim against which it has indemnified the Indemnitees, and VHS
Network shall receive from the Indemnitees all necessary and reasonable
cooperation in said defense including, but not limited to, the services of
employees of the other party who are familiar with the transactions out of which
any such Loss or action, suit, investigation, proceeding, demand, assessment,
8
audit, judgment, or claim may have arisen. VHS Network shall have the right to
control the defense of any such proceeding unless relieved of its liability
hereunder with respect to such defense by the Indemnitees. VHS Network shall
have the right, at its option, and, unless so relieved, to compromise or defend,
at its own expense by its own counsel, any such matter involving the asserted
liability of the Indemnitees. In the event that VHS Network shall undertake to
compromise or defend any such asserted liability, it shall promptly notify the
Indemnitees of its intention to do so. In the event that VHS Network, after
written notice from an Indemnitee, fails to take timely action to defend the
same, the Indemnitee shall have the right to defend the same by counsel of its
or his own choosing, but at the cost and expense of VHS Network.
7.3 Money Damages. If the Loss indemnified against pursuant to the
provisions of Article 7.1 hereof can be compensated by the payment of money, VHS
Network shall, within 21 days after receipt of a written notice of a claim
pursuant to Article 7.2 deliver to the Indemnitee either: (i) the amount of such
claim by check or by wire transfer to the bank account of that party's choosing,
or (ii) a written notice stating that it objects to the validity of such claim
and setting forth in reasonable detail the grounds on which it is contesting the
validity of the claim.
ARTICLE 8
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SURVIVAL OF REPRESENTATIONS,
WARRANTIES, GUARANTEES, AND COVENANTS
-------------------------------------
8.1 Date Certain For Survival. All representations and warranties made
by VHS Network, VHS Acquisition or VHS Network Canada in this Agreement or
pursuant hereto shall survive the closing hereunder for a period ending on the
third anniversary of the Effective Date.
ARTICLE 9
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CONDUCT OF VHS Network Canada
VHS Network AND VHS Acquisition AFTER THE MERGER
------------------------------------------------
9.1 Additional Actions and Cooperation. After the Effective Date, at
the request of either party and at the requesting party's expense, but without
additional consideration, the other party shall execute and deliver from time to
time such further instruments of assignment, conveyance and transfer, shall
cooperate in the conduct of litigation and the processing and collection of
insurance claims, and shall take such other actions as may reasonably be
required to convey and deliver more effectively to VHS Acquisition the assets of
VHS Network Canada or to confirm and perfect the interest of the shareholder of
VHS Network Canada in the common stock of VHS Network, and otherwise to
accomplish the orderly transfer to VHS Network of the business of VHS Network
Canada as contemplated by this Agreement.
9.2 Audit Access. VHS Network will preserve the books, records,
reports, documents and lists owned by it for a period of at least seven years
from the Effective Date, will not thereafter destroy or otherwise dispose of
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such records without giving the Indemnitees notice and the opportunity to take
possession thereof, and, while in possession of such records, will permit
representatives of the Indemnitees to have access at reasonable times to such
books, records, reports, documents and files, to make such copies therefrom as
such representatives reasonably request. The Indemnitees shall, subject to
applicable law and regulation, and the terms of any confidentiality agreement,
hold in confidence any nonpublic information concerning VHS Network obtained
hereunder.
ARTICLE 10
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BROKERAGE; EXPENSES
-------------------
Except as set forth on Schedule 10, none of the parties has employed or
will employ any broker, agent, finder, or consultant (collectively, "Broker") or
has incurred or will incur any liability for any brokerage fees, commissions,
finders' fees, or other fees, in connection with the negotiation or consummation
of the transactions contemplated by this Agreement, except as herein set forth.
VHS Network Canada is responsible for and hereby indemnifies and holds the
Indemnitees harmless against and in respect of any claim for brokerage fees,
commissions, or other finders' fees or commissions of any such Broker employed
by VHS Network Canada and any additional such claims incurred by the Indemnitees
relative to this Agreement and the transactions contemplated hereby and any
attorney fees incurred by any of these parties in relation to any such claim by
a Broker not otherwise disclosed herein. Similarly, the Indemnitees are
responsible for and hereby indemnify and hold VHS Network harmless against and
in respect of any claim for brokerage fees, commissions, or other finders' fees
or commissions of any such Broker employed by the Indemnitees or VHS Network and
not disclosed herein and any additional such claims incurred by VHS Network
relative to this Agreement and the transactions contemplated hereby and any
attorney fees incurred by VHS Network in relation to any such claim by a Broker.
ARTICLE 11
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CORPORATE NAMES
---------------
VHS Acquisition shall have the exclusive right to use the corporate
name "VHS Network Canada" after the Effective Date.
ARTICLE 12
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GENERAL
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12.1 Entire Agreement; Amendments. This Agreement constitutes the
entire understanding among the parties with respect to the subject matter
contained herein and supersedes any prior understandings and agreements among
them respecting such subject matter. This Agreement may be amended,
supplemented, and terminated only by a written instrument duly executed by all
of the parties.
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12.2 Headings. The headings in this Agreement are for convenience of
reference only and shall not affect its interpretation.
12.3 Gender; Number. Words of gender may be read as masculine,
feminine, or neuter, as required by context. Words of number may be read as
singular or plural, as required by context.
12.4 Exhibits and Schedules. Each Exhibit and Schedule referred to
herein is incorporated into this Agreement by such reference.
12.5 Severability. If any provision of this Agreement is held illegal,
invalid, or unenforceable, such illegality, invalidity, or unenforceability will
not affect any other provision hereof. This Agreement shall, in such
circumstances, be deemed modified to the extent necessary to render enforceable
the provisions hereof.
12.6 Notices. All notices and other communications hereunder shall be
in writing and shall be given to the person by sending a copy thereof by
certified mail or by telecopy. Notice shall be deemed to have been given to the
person entitled thereto when deposited in the United States mail or when
transmitted.
If to VHS Network, to:
G. David George, President
VHS Network, Inc.
P.O. Box 291989
Nashville, Tennessee 37229
If to VHS Network Canada:
Mr. Elwin D. Cathcart
VHS Network Canada, Inc.
1599 Hurontario Street, Suite 200
Mississauga, Ontario L5F 4S1
Fax No. (905) 891-5698
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Notice of any change in any such address shall also be given in the manner set
forth above. Whenever the giving of notice is required, the giving of such
notice may be waived by the party entitled to receive such notice.
12.7 Waiver. The failure of any party to insist upon strict performance
of any of the terms or conditions of this Agreement will not constitute a waiver
of any of its rights hereunder.
12.8 Assignment. No party may assign any of its rights or delegate any
of its obligations hereunder without the prior written consent of the other
parties.
12.9 Successors and Assigns. This Agreement binds, inures to the
benefit of, and is enforceable by the successors and assigns of the parties, and
does not confer any rights on any other persons or entities.
12.10 Governing Law; Jurisdiction. The parties agree that, irrespective
of any wording that might be construed to be in conflict with this paragraph,
this Agreement is one for performance in Florida. The parties to this Agreement
agree that they waive any objection, constitutional, statutory or otherwise, to
a Florida court's taking jurisdiction of any dispute between them. By entering
into this agreement, the parties, and each of them understand that they might be
called upon to answer a claim asserted in a Florida court. This Agreement shall
be construed and enforced in accordance with law of the State of Florida. Venue
for any such action shall be deemed proper in Hillsborough County, Florida.
12.11 No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and their successors and assigns, and they shall not be construed
as conferring and are not intended to confer any rights on any other persons.
12.12 Publicity. Prior to the Effective Date, all notices to third
parties and all other publicity relating to the transactions contemplated by
this Agreement shall be jointly planned, coordinated and agreed to by the
Shareholder and VHS Network. Except as may be required by law, prior to the
Effective Date none of the parties hereto shall act unilaterally in this regard
without the prior approval of the Shareholder and VHS Network; provided,
however, that such approval shall not be unreasonably withheld.
12.13 Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. The execution of this Agreement by any party hereto will not become
effective until counterparts hereof have been executed by all the parties
hereto. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
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12.14 Limitations Upon Consent: Whenever, under the terms of this
Agreement, the parties hereto are called upon to give their written consent,
such written consent will not be unreasonably withheld.
12.15 Form of Consent: All consents of any kind required under this
Agreement shall be in writing. Whenever, under the terms of this Agreement, VHS
Network, and/or VHS Network Canada are authorized to give consent, such consent
may be given and shall be conclusively evidenced by the Chairman of the Board of
Directors or the president of each respective corporation giving such consent.
Whenever, under the terms of this Agreement, any of the Shareholder is
authorized to give his consent, such consent may be given and shall be
conclusively evidenced in writing as certified by each of these persons
individually or by their duly appointed legal representative.
12.16 Attorneys' Fees and Court Actions: If a legal action is initiated
by any party to this Agreement against another, arising out of or relating to
the alleged performance or non-performance of any right or obligation
established hereunder, or any dispute concerning the same, any and all fees,
costs and expenses reasonably incurred by each successful party or his or its
legal counsel in investigating, preparing for, prosecuting, defending against,
or providing evidence, producing documents or taking any other action in respect
of, such action shall be the joint and several obligation of and shall be paid
or reimbursed by the unsuccessful party.
12.17 Binding Effect: This Agreement shall inure to the benefit of and
be binding upon VHS Network and VHS Network Canada, and their successors or
assigns, including but not limited to any corporation or other business entity
which may acquire all or substantially all of VHS Network's and/or VHS Network
Canada's assets and business, or with, or into which VHS Network Canada and/or
any VHS Network Canada subsidiary may be consolidated or merged, and upon the
executors, administrators and legal representatives thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
VHS Network, Inc.
By:/s/ G. David George
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G. David George, President
VHS Acquisition, Inc.
By: /s/ G. David George
-----------------------
G. David George, President
VHS Network Canada, Inc.
By:/s/ Elwin Cathcart
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Elwin Cathcart, President