EXHIBIT 2.1
ANTI-DILUTION AGREEMENT
This Anti-Dilution Agreement ("Agreement") is dated as of July ___,
2005 by and among CAPITAL SOLUTIONS I, INC., a Delaware corporation ("CSON" or
the "Company"), on the one hand, and XXXXXXXXXXX XXXXXX ("CA") and XXXXXXX
XXXXXX ("RA"), in their respective individual capacities, on the other.
WITNESSETH:
WHEREAS, CA is the record and beneficial owner of 150,005,550 shares of common
stock of CSON and RA is the record and beneficial owner of 250,000,000 shares of
common stock of CSON;
WHEREAS, the interest of CA and RA together currently comprise 51.04% of the
total issued and outstanding shares of common stock of CSON;
WHEREAS, CA and RA constitute the entire current board of directors of the
Company and are the sole officers of the Company. As the board of directors and
officers of the Company CA and RA have adopted an aggressive growth plan and are
currently in negotiations for the acquisition of a petroleum business which
would alter the business of CSON from a blank check to a fully operating
business.
WHEREAS, CA, RA and CSON recognize that the success of any merger or acquisition
will depend upon the attaining of corporate financing, including, but not
limited to, private and public offerings of the Company's stock, which could
result in further dilution to the CA and RA interest;
WHEREAS, CA and RA have been the directors and officers of the Company since
2001 and have provided valuable, time, effort and capital contributions and will
continue to so provide;
WHEREAS, since 2001 the only compensation that CA or RA has received has been
common stock with little or no liquidation value;
WHEREAS, as a material inducement for CA and RA to adopt an aggressive growth
plan, engage in the time and expense of negotiating for mergers and
acquisitions, and to seek corporate financing opportunities, CSON has agreed to
the adoption of this Anti-Dilution Agreement.
NOW THEREFORE, in consideration of the promises and representations of
the parties herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I.
ANTI-DILUTION RIGHTS
1.1 Anti-Dilution Rights. As of the date hereof, the Company agrees to
assure that CA and RA each shall have and maintain at all times, weighted
average anti-dilution
protection rights as to the total number of issued and outstanding shares of
Common Stock of the Company from time to time, at the rate of 51% as to them
collectively. In the event that CSON issues any shares of Common Stock or any
security convertible into or exchangeable for Common Stock to any person or
entity, the Company agrees to undertake all necessary measures as may be
necessary or expedient to accommodate its performance under this Agreement,
including, without limitation, the amendment of its articles of incorporation to
the extent necessary to provide for a sufficient number of shares of authorized
Common Stock to be issued to CA and RA so as to maintain in each of CA and RA
the minimum interest in the Common Stock of the Company consistent with this
Agreement.
1.2 Future Company Action. In the event, that CSON provides
anti-dilution protection rights to any investor in the Company that are more
favorable to such investor, in any respect, than the rights granted to CA and RA
pursuant to Section 1.1 hereof, the Company hereby agrees to provide CA and RA
with any and all such more favorable anti-dilution protection rights. All rights
granted in this Article I are supplementary and additional to any other rights
provided herein or at law.
1.3 Calculation of Number of Shares of Common Stock. For purposes of
the calculation the number of shares owned by CA and RA collectively, the number
of shares owned by CA shall be included in the total number of shares owned by
RA, and vice versa.
1.4 Public Offering. In the event of a Public Offering (defined below),
this Agreement shall terminate effective immediately prior to the effectiveness
of the registration statement described below. For purposes of this Agreement,
the term "Public Offering" means the effectiveness of a registration statement
filed by CSON pursuant to the Securities Act of 1933, as amended (other than on
Form S-4 or S-8 on any successor forms thereto), covering the offer and sale of
common stock in an underwritten public offering in which the gross proceeds of
the offering will equal or exceed $50,000,000 (calculated before deducting
underwriters' discounts and commissions and other offering expenses).
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of CA and RA Each of CA and RA
hereby represents and warrants to CSON as follows:
2.1.1 Authority. Each has the power and authority to execute
and deliver this Agreement and to perform all of their obligations hereunder.
2.1.2 Validity. This Agreement constitutes the valid and
legally binding agreement of each of them, enforceable against each in
accordance with its terms, except that: enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) applicable equitable principles.
2.1.3 Consents. The execution, delivery and performance by
each of CA and RA do not require any consent that has not been received prior to
the date hereof.
2.2 Representations and Warranties of the Company. CSON hereby
represents and warrants to each of CA and RA as follows:
3.2.1 Existence and Authority. The Company is a corporation
duly organized under the laws of the State of Delaware, its charter with the
State of Delaware is in good standing, and it has the requisite corporate power
and authority to execute and deliver this Agreement and to perform all its
obligations hereunder.
3.2.2 Validity. This Agreement constitutes the valid and
legally binding agreement of the Company, enforceable against the Company in
accordance with its terms, except that: enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) applicable equitable principles.
3.2.3 Consents. The execution, delivery and performance by the
Company of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not require any authorization or consent
that has not been received as of or prior to the date hereof.
ARTICLE III
MISCELLANEOUS
3.1 Entire Agreement. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained. No changes of or
modifications or additions to this Agreement shall be valid unless the same
shall be in writing and signed by the parties hereto.
3.2 Binding Effect; Assignment. This Agreement shall be binding upon
the parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other party.
3.3 Amendment. The parties hereby agree that no attempted amendment,
modification, or change of this Agreement shall be valid and effective, unless
the parties shall unanimously agree in writing to such amendment, modification
or change.
3.4 Counterparts. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together will constitute one and the same instrument.
3.5 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida and any proceeding arising between the parties
in any manner pertaining or related to this Agreement shall, to the extent
permitted by law, be held in Palm Beach County, Florida.
3.6 Further Assurances. The parties hereto will execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
3.7 Litigation. If any party hereto is required to engage in litigation
against any other party hereto, either as plaintiff or as defendant, in order to
enforce or defend any of its, his or her rights under this Agreement, and such
litigation results in a final judgment in favor of such party ("Prevailing
Party"), then the party or parties against whom said final judgment is obtained
shall reimburse the Prevailing Party for all direct, indirect or incidental
expenses incurred by the Prevailing Party in so enforcing or defending its, his
or her rights hereunder, including, but not limited to, all attorneys' fees and
paralegals' fees, and all court costs and other expenses incurred throughout all
negotiations, trials or appeals undertaken in order to enforce the Prevailing
Party's rights hereunder.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above first written.
CAPITAL SOLUTIONS I, INC:
By:____________________________________
Xxxxxxxxxxx Xxxxxx, President
___________________________________
Xxxxxxxxxxx Xxxxxx
___________________________________
Xxxxxxx Xxxxxx
