SECOND AMENDMENT TO AGREEMENT OF MERGER AND PLAN OF REORGANIZATION
Exhibit 2.3
SECOND AMENDMENT TO AGREEMENT
OF MERGER AND PLAN OF REORGANIZATION
This
Second Amendment to Agreement of Merger and Plan of Reorganization,
dated as of June 1, 2017 (this “Amendment”), is made
and entered into by and by and among Environmental Packaging
Technologies Holding, Inc., a Nevada corporation
(“Pubco”), EPT Acquisition
Corporation, a Delaware corporation (“Merger Sub”), and a
direct wholly-owned subsidiary of Pubco, and Environmental
Packaging Technologies, Inc., a Delaware corporation
(“EPT”
and, together with Pubco and Merger Sub, the “Parties”). This Amendment
amends the Agreement of Merger and Plan of Reorganization by and
among the Parties and dated December 28, 2016, as amended on March
31, 2017 (collectively, the “Agreement”).
WHEREAS, the
Parties have determined that it is necessary, desirable and in the
best interest of the Parties to amend the Agreement as set forth in
this Amendment. Capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the
Agreement.
NOW
THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein
contained, the Company and the Holder hereby agree as
follows:
1.
Section 1.09(h) of
the Agreement is amended and restate in its entirety as
follows:
(h) Pubco
agrees that it will cause the Pubco Common Stock into which EPT
Common Stock is converted at the Effective Time pursuant to
Section 1.08(a)(ii) to be available for such purposes.
Pubco further covenants that at or immediately following the
Effective Time, Pubco will effect cancellations of outstanding
shares of Pubco Common Stock and that there will be no more than
12,000,023 pre-Merger shares of Pubco Common Stock issued and
outstanding, and that no other pre-Merger common or preferred stock
or equity securities or any options, warrants, rights or other
agreements or instruments (debt, equity and/or otherwise)
convertible, exchangeable or exercisable into common or preferred
stock or other equity securities shall be issued or outstanding,
except as described herein. At the Effective Time, EPT shall pay
$550,000 to the shareholder of the controlling block of Pubco
Common Stock (the “Controlling Shareholder”
for the cancellation of 11,810,830 shares of Parent Common Stock
and for services related to the completion of the
Merger.
2.
Section 1.10 of the
Agreement is amended and restate in its entirety as
follows:
Capital Structure of Pubco
Post-Merger. Immediately prior to the Effective Time, Pubco
shall have issued and outstanding 12,000,023 shares of Pubco Common
Stock and no other securities (as defined under the Securities
Act). Immediately following the Effective Time, Pubco shall have
(a) issued and outstanding the following shares of Pubco Common
Stock (i) 40,000,000 shares owned by the former EPT Stockholders,
(ii) 12,000,023 shares owned by the Pubco shareholders
immediately prior to the Effective Time, (iii) such number of
shares to be issued to purchasers of EPT Common Stock in a private
placement by EPT and converted into Pubco Common Stock pursuant to
Section 1.08(ii) hereof, (iv) 1,045,000 shares issuable upon
exercise of EPT warrants outstanding prior to the Effective Date,
(v) 1,120,000 shares issuable upon conversion of convertible notes
of EPT issued in a private placement, and (vi) 998 shares of Series
B convertible preferred stock representing the same 998 shares of
Series B preferred stock of EPT issued and outstanding, and which a
Certificate of Designation will be filed with the State of Nevada
for such B Shares following the Effective Time.
3.
Section 2.11 of the
Agreement is amended and restated in its entirety as
follows:
“Financial Statements.
Pubco has previously been provided with EPT’s audited balance
sheets (the “Balance
Sheet”) as of December 31, 2016 (the
“EPT Balance Sheet
Date”) and statements of operations, stockholders
equity and cash flows for the twelve (12) months ended December 31,
2016 and 2015 (the “Financial Statements”.
The audited Financial Statements (a) are in accordance with
the books and records of EPT, (b) present fairly the financial
condition and operating results of EPT as of the dates therein
specified and for the periods therein specified, subject to normal
year-end audit adjustments and (c) have been prepared in
accordance with GAAP applied on a basis consistent with prior
accounting periods.”
4.
Section 2.12 of the
Agreement is amended and restated in its entirety as
follows:
“Absence of Undisclosed
Liabilities. As of December 31, 2016, EPT had no material
obligation or liability (whether accrued, absolute, contingent,
liquidated or otherwise, whether due or to become due), arising out
of any transaction entered into at or prior to the Closing, except
(a) as disclosed in the Balance Sheet, (b) to the extent
set forth on or reserved against in the Balance Sheet or the notes
to the Financial Statements, and (c) current liabilities
incurred and obligations under agreements entered into in the usual
and ordinary course of business since EPT Balance Sheet
Date.”
5.
Section 6.02(d) and
(e) of the Agreement are amended and restated in its entirety as
follows:
"(d)
At Closing, neither
Pubco nor Merger Sub shall have any Indebtedness nor any other
amounts due and/or outstanding other than accounts payable no
greater than $34,000.
(e)
EPT shall have
raised no less than $2,250,000 of gross proceeds through the sale
of its equity and/or debt securities.”
6.
Section 7.01(e) of
the Agreement is amended and restated in its entirety as
follows:
“by either
EPT, on the one hand, or Pubco and Merger Sub, on the other hand,
if the Closing has not occurred on or prior to June 15 2017, for
any reason other than delay or nonperformance of the party seeking
such termination.”
7.
Section 8.03 of the
Agreement is amended and restated in its entirety as
follows:
“EPT shall be
responsible for (a) any and all of its own legal, audit, printing
and transfer agent fees (“Professional Fees
and Expenses”) and broker fees in connection with the
merger and any private placement, and (b) up to $34,000 (which may
be increased by mutual agreement of the Parties) of Pubco’s
Professional Fees and Expenses in connection with the Merger and
all transactions contemplated herein.”
8. Notwithstanding
anything to the contrary provided herein, in the Agreement or
elsewhere, the Parties acknowledge that EPT has not provided the
unaudited financial statements for the quarter ending March 31,
2017, as such are not yet available, and as a result will not be
included in the Current Report on Form 8-K (the “8-K”) of Pubco to be
filed with the SEC no later than four (4) business days following
the Effective Date. Such shall not constitute a direct and/or
indierct violation, breach and/or an event of default under and are
hereby expressly waived as a Pubco and Merger Sub closing condition
in the Merger Agreement (to the extent such is a closing
condition). EPT shall cause such unaudited financial statements to
be filed as an amendment to the 8-K as soon as reasonably possible
following the receipt of the final copy thereof.
9. This Amendment is
effective as of the date hereof, and all references to the
Agreement from and after such time will be deemed to be references
to the Agreement as amended hereby. The Agreement is not otherwise
supplemented or amended by virtue of this Amendment, but remains in
full force and effect only amended as specifically stated
herein.
10. This Agreement and
the terms and conditions set forth herein, shall be governed by and
construed solely and exclusively in accordance with the internal
laws of the State of New York without regard to the conflicts of
laws principles thereof. The parties hereto hereby expressly and
irrevocably agree that any suit or proceeding arising directly
and/or indirectly pursuant to or under this Agreement shall be
brought solely in a federal or state court located in the City,
County and State of New York. By its execution hereof, the parties
hereto covenant and irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City,
County and State of New York and agree that any process in any such
action may be served upon any of them personally, or by certified
mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally
served upon them in New York, New York. The parties hereto
expressly and irrevocably waive any claim that any such
jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with
respect thereto. In the event of any such action or proceeding, the
party prevailing therein shall be entitled to payment from the
other parties hereto of all of its reasonable counsel fees and
disbursements.
11. This Agreement may
be executed in one or more counterparts, with the same effect as if
all parties had signed the same document. Each such counterpart
shall be an original, but all such counterparts together shall
constitute a single agreement.
12. If any term or
other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by
applicable legal requirements in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the
extent possible.
IN WITNESS
WHEREOF, the parties hereto have executed this Agreement to be
binding and effective as of the day and year first above
written.
PUBCO:
ENVIORNMENTAL
PACKAGING TECHNOLOGIES HOLDINGS, INC.
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
President and Chief Executive Officer
MERGER SUB:
EPT
ACQUISITION CORPORATION
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
President and Chief Executive Officer
EPT:
ENVIORNMENTAL
PACKAGING TECHNOLOGIES, INC.
By: /s/ Xxxxx
Xxxxxxxx
Name:
Xxxxx Xxxxxxxx
Title:
Chief Executive Officer
