Exhibit 2.4
Page 1 of 6
FIRST ADDENDUM TO
REORGANIZATION AGREEMENT
This First Addendum to the Reorganization Agreement ("Agreement") between
and among Tamboril Cigar Company, a corporation organized under the laws of the
State of Delaware (the "Company"), Axion Power Corporation, a Canadian Federal
Corporation, ("Axion") and the persons identified in Schedules A-1 through A-4
(the "Axion Securityholders") is made, entered into and effective this 9th day
of January 2004.
WHEREAS, C and T Co. Incorporated and Xx. Xxxx Xxxxxxxxx have agreed to
join in and execute the Reorganization Agreement upon the terms and conditions
specified in this First Addendum; and
WHEREAS, Turitella Corporation has agreed to join in the Reorganization
Agreement and become an additional Axion Securityholder upon the terms and
conditions specified in this First Addendum;
NOW, THEREFORE, in consideration of the mutual covenants, obligations and
benefits hereinafter set forth, the parties hereto agree as follows:
1. Paragraph 1(c) of the agreement is hereby amended to read in its
entirety as follows:
c. Capitalization. The authorized capital stock of Axion consists of an
unlimited number of shares of common stock without par value ("Axion Common").
As of the date hereof one (1) share of Axion Common is issued and outstanding
and 3,923,999 shares of common stock are issuable to the founders of Axion for
out-of-pocket costs incurred and substantial personal services actually rendered
in connection with the organization of Axion. All of the issued and outstanding
shares of Axion Common are duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute, Axion'
Articles of Incorporation or By-Laws or any other agreement to which Axion is a
party or bound. Axion has received the full consideration for the founders'
shares and the shares are presently issuable to the persons entitled thereto.
Schedule A-1 identifies the owner of the one issued and outstanding share of
Axion Common and the beneficial owners of the 3,923,999 founders' shares that
will be acquired by the Company pursuant to this Agreement.
Axion has previously sold $550,000 aggregate principal amount of
convertible seed financing notes, which are convertible into Axion Common at a
price of $.50 per share. Schedule A-2 identifies the holders of the $500,000
aggregate principal amount of Axion's convertible seed financing notes that will
be acquired by the Company pursuant to this Agreement.
Axion has previously sold $1,000,000 aggregate principal amount of
convertible first round private placement notes, which are convertible into
Axion units at a price of $.75 per unit. Each Axion unit will include one share
of Axion Common and one warrant that entitles the holder to purchase one
additional share of Axion Common for a period of one year upon payment of a
warrant exercise price $1.00 per share. If the warrants are not exercised within
six months from the issue date, the exercise price will increase to $1.50 per
share. Schedule A-3 identifies the holders of the $800,000 aggregate principal
amount of Axion's convertible first round private placement notes that will be
acquired by the Company pursuant to this Agreement.
Axion has previously sold $350,000 aggregate principal amount of
convertible second round private placement notes, which are convertible into
Axion units at a price of $1.00 per unit. Each Axion unit will include one share
of Axion Common and one warrant that entitles the holder to purchase one
additional share of Axion Common for a period of one year upon payment of a
warrant exercise price $1.50 per share. If the warrants are not exercised within
six months from the issue date, the exercise price will increase to $2.00 per
share. Schedule A-4 identifies the holders of the $150,000 aggregate principal
amount of Axion's convertible second round private placement notes that will be
acquired by the Company pursuant to this Agreement.
Except as set forth above, there are no bonds, debentures, notes or other
debt securities presently outstanding, or any agreements, understandings or
arrangements obligating Axion to issue, deliver or sell any debt securities in
the future.
Except as set forth above, there are no options, warrants, calls or other
rights, agreements, arrangements or commitments presently outstanding, or any
agreements, understandings or arrangements obligating Axion to issue, deliver,
sell or enter into any such option, warrant, call or other such right,
agreement, arrangement or commitment in the future.
All of the Axion securities specified above are duly authorized, validly
issued, fully paid and nonassessable and are owned by the persons specified in
Schedules A-1 through A-4, free and clear of any security interests, liens,
claims, pledges, agreements, limitations on voting rights, charges or other
encumbrances of any nature whatsoever ("Encumbrances").
2. Paragraph 3(c) of the agreement is hereby amended to read in its
entirety as follows:
c. Capitalization. The Company has the corporate authority to issue a
total of 400,000,000 shares of $.0001 par value common stock and 100,000,000
shares of $0.0001 par value preferred stock, of which 30,000,000 shares of
common stock are presently issued and outstanding. All issued and outstanding
shares of the Company's common stock are fully paid, validly issued and
nonassessable. Except as specifically provided herein, no other capital stock of
the Company will be outstanding on the Closing Date. Except as specifically
provided herein, no stockholder of the Company will have or obtain any
registration rights with respect to any shares of the Company's capital stock
that are issued and outstanding on the Closing Date.
On the closing date, after paying all outstanding third-party debts, the
Company will have no material assets and approximately $484,123 in related party
debt owed to Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx. Immediately after the closing
of this agreement, the Company will issue 1,865,731 common stock purchase
warrants to each of Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx in full and settlement
of all related party debts. The warrants will expire on December 31, 2005 and
each warrant will entitle the holder to purchase one share of common stock year
upon payment of a warrant exercise price of $.125 per share.
On January 8, 2004, Tamboril issued a total of 3,741,462 warrants to Xxxx
X. Xxxxxxxx as partial compensation for legal services to be provided by Xx.
Xxxxxxxx in connection with the operations of Tamboril after December 31, 2004.
The warrants will expire on January 8, 2006 and each warrant will entitle Xx.
Xxxxxxxx to purchase one share of common stock year upon payment of a warrant
exercise price of $.125 per share.
On January 8, 2004, C and T Co. Incorporated agreed to purchase a total
of 20,000,000 Tamboril shares from Xxxx X. Xxxxxxxx and Xxxxx X. Xxxxxx for a
price of $200,000.
On January 8, 2004, C and T Co. Incorporated agreed to join in the
Reorganization Agreement and transfer certain contractual rights with respect to
Axion and Axion's technology to Tamboril in exchange for 25,000,000 common stock
purchase warrants. The warrants will expire on December 31, 2005 and each
warrant will entitle the holder to purchase one share of common stock year upon
payment of a warrant exercise price of $.125 per share.
On January 8, 2004, Xxxx Xxxxxxxxx agreed to transfer all of his right,
title and interest in and to 340,000 Axion founders' shares and $50,000 in Axion
seed financing notes to Tamboril in accordance with the provisions of the
Reorganization Agreement.
On January 8, 2004, Turitella Corporation agreed to purchase the
equivalent of $200,000 in convertible first round private placement notes and
$200,000 in convertible second round private placement notes.
As a condition of the foregoing agreements, C and T Co. Incorporated,
Xxxx Xxxxxxxxx and Turitella Corporation required that the number of Tamboril
shares allocated to Axion's founders be increased from 24,480,000 shares to
31,392,000 shares and that such shares be reallocated among the Axion founders
as set forth in Schedule A-1 to this Addendum.
As a condition of the foregoing agreements, C and T Co. Incorporated,
Xxxx Xxxxxxxxx and Turitella Corporation required that the number of shares
allocated to the Mega-C Shareholders Trust be increased from 114,359,736 shares
to 118,167,736 shares.
Immediately after the closing of this Addendum, the Company will have
201,826,432 shares of Common Stock and 45,225,555 common stock purchase warrants
issued and outstanding, which will be held beneficially and of record as
follows:
Common Total
Stock Warrants Ownership
Tamboril Stockholders 10,000,000 6,758,859 16,758,859
C and T Co. Incorporated 20,000,000 25,000,000 45,000,000
MCP stockholders trust 118,167,736 118,167,736
Axion Founders 31,392,000 31,392,000
Seed Financing 8,800,000 8,800,000
First Round Private Placement 10,666,696 10,666,696 21,333,392
Second Round Private Placement 2,800,000 2,800,000 5,600,000
---------- ---------- ----------
Totals 201,826,432 45,225,555 247,051,987
3. Except as specifically set forth above and the Amended Schedules
attached hereto, all other provisions of the original Reorganization Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
TAMBORIL CIGAR COMPANY
/s/ /s/s
Xxxx Xxxxxxx, president and director Xxxx X. Xxxxxxxx, chief financial
officer and director
C and T Co. Incorporated
/s/
Xxxx Xxxxxxxxx, president
/s/
Turitella Corporation Xxxx Xxxxxxxxx
/s/
Authorized representative
EXHIBIT A
SCHEDULE OF STOCK ISSUANCES
PAGE 1 OF 2
AMENDED SCHEDULE A-1
HOLDERS OF COMMON STOCK AND
BENEFICIAL OWNERS OF FOUNDERS SHARES
Name of Stockholder or Axion Shares Tamboril
Beneficial Owner Surrendered Shares Issued
Xxxxxx Xxxxxxxx (Xxxx) Xxxxxxx 90,000 720,000
Xxxxxx Xxxxxxx 540,000 4,320,000
Xxxxx Xxxxx 340,000 2,720,000
Xxxxx Xxxxx 400,000 3,200,000
Xxxxxx Xxxxxxxxx 404,000 3,232,000
Xxxx Xxxxxxxxx 340,000 2,720,000
Xxxxxx Xxxxxxxxxx 340,000 2,720,000
Xxxxxx Xxxxxxx 340,000 2,720,000
Xxxxx X. Xxxxxxxxx 450,000 3,600,000
Canadian Consultants Bureau Inc. 340,000 2,720,000
Xxx Xxxxxx 340,000 2,720,000
Schedule A-1 Total 3,924,000 31,329,000
AMENDED SCHEDULE A-2
HOLDERS OF CONVERTIBLE
SEED FINANCING NOTES
Name of Convertible Principal Amount Axion Shares Tamboril
Seed Financing Noteholder of Notes Issuable Shares Issued
Xxxxxx Xxxxxxx $50,000 100,000 800,000
Xxxxx Xxxxx $50,000 100,000 800,000
Xxxxx Xxxxx $50,000 100,000 800,000
Xxxxxx Xxxxxxxxx $50,000 100,000 800,000
Xxxx Xxxxxxxxx $50,000 100,000 800,000
Xxxxxx Xxxxxxxxxx $50,000 100,000 800,000
Xxxxxx Xxxxxxx $50,000 100,000 800,000
HAP Investments LLC $50,000 100,000 800,000
Canadian Consultants Bureau Inc. $50,000 100,000 800,000
Infinity Group LLC $100,000 200,000 1,600,000
Schedule A-2 Total $550,000 1,100,000 8,800,000
EXHIBIT A
SCHEDULE OF STOCK ISSUANCES
PAGE 2 OF 2
AMENDED SCHEDULE A-3
HOLDERS OF CONVERTIBLE
FIRST ROUND PRIVATE PLACEMENT NOTES
Name of Convertible
First Round Private Principal Amount Axion Shares Tamboril Tamboril
Placement Noteholder of Notes Issuable Shares Issued Warrants Issued
Xxxxxx Xxxxxxx $ 200,000 266,667 2,133,333 2,133,333
Xxxxx Xxxxx $ 100,000 133,333 1,066,667 1,066,667
Xxxxx Xxxxx $ 100,000 133,333 1,066,667 1,066,667
Xxxxxx Xxxxxxxxx $ 100,000 133,333 1,066,667 1,066,667
Turitella Corporation $ 200,000 266,667 2,133,333 2,133,333
HAP Investments LLC $ 200,000 266,667 2,133,333 2,133,333
Canadian Consultants Bureau Inc. $ 100,000 133,333 1,066,667 1,066,667
Schedule A-3 Total $ 1,000,000 1,333,333 10,666,667 10,666,667
AMENDED SCHEDULE A-4
HOLDERS OF CONVERTIBLE
SECOND ROUND PRIVATE PLACEMENT NOTES
Name of Convertible
Second Round Private Principal Amount Axion Shares Tamboril Tamboril
Placement Noteholder of Notes Issuable Shares Issued Warrants Issued
Xxxxx Xxxx $150,000 150,000 1,200,000 1,200,000
Turitella Corporation $200,000 200,000 1,600,000 1,600,000
Schedule A-4 Total $350,000 350,000 2,800,000 2,800,000
