1
Exhibit 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (hereinafter the "Agreement") is
entered into effective as of this 6th day of April 1999, by and among Xxxxxxx,
Inc., a Delaware corporation (hereinafter "Xxxxxxx"); Xxxxxx Xxxxxxx, a
shareholder of Xxxxxxx (hereinafter "Heiselt"); XxxxxxXxxx.xxx, Inc., a Delaware
corporation (hereinafter "SNC"), and owners of outstanding common stock of SNC
(hereinafter the "SNC Stockholders").
RECITALS:
WHEREAS, the SNC Stockholders own issued and outstanding common stock of
SNC (the "SNC Common Stock"). Xxxxxxx desires to acquire the SNC Common Stock
solely in exchange for voting common stock of Xxxxxxx, making SNC a controlled
or wholly-owned subsidiary of Xxxxxxx (the "Acquisition"); and
WHEREAS, the SNC Stockholders (as set forth on Exhibit "A") desire to
acquire voting common stock of Xxxxxxx in exchange for the SNC Common Stock, as
more fully set forth herein.
NOW THEREFORE, for the mutual consideration set out herein and other good
and valuable consideration, the legal sufficiency of which is hereby
acknowledged, the parties agree as follows:
AGREEMENT
1. PLAN OF REORGANIZATION. It is hereby agreed that the SNC Common Stock
shall be acquired by Xxxxxxx in exchange solely for Xxxxxxx common voting stock
(the "Xxxxxxx Shares"). It is the intention of the parties hereto that SNC
Common Stock be acquired by Xxxxxxx in exchange solely for Xxxxxxx common voting
stock and that this entire transaction qualify as a corporate reorganization
under Section 368(a)(1)(B) and/or Section 351 of the Internal Revenue Code of
1986, as amended, and related or other applicable sections thereunder.
2. OVERALL TRANSACTION. It is the ultimate purpose of this transaction to
cause Xxxxxxx to make an offer to acquire all of the issued and outstanding
capital stock, warrants and options of SportsNuts in exchange for like
securities of Xxxxxxx as further described herein and to cause SportsNuts to
become a wholly owned subsidiary of Xxxxxxx. However, said transaction shall be
accomplished in two steps. In the first step, Xxxxxxx, with the assistance of
SportsNuts, shall present an offer to all current shareholders of SNC who are
reasonably believed by SNC to be accredited investors as defined by Rule 501(a)
of Regulation D, promulgated under the Securities Act of 1933, as amended (the
"Act"). The Closing of the
2
Acquisition described herein is conditioned upon the acceptance by accredited
SportsNuts Stockholders representing at least 80% of the outstanding SNC Common
Stock. In the event the Acquisition is completed, in that Xxxxxxx is able to
acquire at least 80% of the outstanding SNC Common Stock from accredited SNC
Stockholders, Xxxxxxx shall, as the second step, use its best efforts to file
and pursue to effectiveness a registration statement with the S.E.C. and any
applicable state agencies, covering an offer to all remaining SNC securities
holders (common shares, warrants and options) to exchange their existing
securities of SNC for like securities of Xxxxxxx on the basis described herein,
(the "Second Exchange").In the first step, Xxxxxxx shall offer to existing
accredited holders of outstanding SNC Warrants ("SNC Warrantholders") the
opportunity to exchange such securities for like securities of Xxxxxxx in the
manner and on the basis described herein (the "Accredited Warrant Exchange").
3. TERMS OF EXCHANGE. The parties agree that on the Closing Date or at the
Closing as hereinafter defined, which includes any subsequent Closings to
accomplish the Second Exchange and the Accredited Warrant Exchange, Xxxxxxx
shall deliver its securities, after giving effect to a 2.213 for 1 forward stock
split as to all currently outstanding shares of common stock (the "Forward
Split") as follows:
(a) Xxxxxxx shall, subject to the terms and conditions set forth herein,
issue an aggregate of 9,299,648 shares of its common stock (the Xxxxxxx Shares")
to the SNC Stockholders in exchange for 14,200,000 shares of outstanding SNC
Common Stock on a ratio of .654904748 Xxxxxxx shares for each outstanding share
of SNC Common Stock. The SNC Stockholders are listed on the attached Exhibit "A"
which is by this reference incorporated herein.
(b) Xxxxxxx shall, subject to the terms and conditions set forth herein,
issue warrants to acquire an aggregate of 3,870,487 Xxxxxxx Shares to SNC
Warrantholders in exchange for outstanding SNC Warrants. The SNC Warrantholders
are listed on Exhibit "A". The terms of the Xxxxxxx Warrants are outlined and
set forth in the attached Exhibit "B", which is by this reference incorporated
herein. The ratio of the exchange shall give the SNC Warrantholders the right to
purchase .654904748 Xxxxxxx Shares for each share of SNC Common Stock covered by
outstanding SNC Warrants.
(c) Xxxxxxx shall, subject to the terms and conditions set forth herein,
issue options to acquire an aggregate of 9,862,865 Xxxxxxx Shares to SNC
Optionholders in exchange for outstanding SNC Options. The SNC Optionholders are
listed on Exhibit "A". The terms of the Xxxxxxx Options are outlined and set
forth in the attached Exhibit "C", which is by this reference incorporated
herein. The ratio of the exchange shall give the SNC Optionholders the right to
purchase .654904748 Xxxxxxx Shares for each share of SNC Common Stock covered by
outstanding SNC Warrants.
(d) Each SNC Stockholder shall execute this Agreement or a written consent
to the exchange of their SNC Common Stock for Xxxxxxx Shares.
(e) The Acquisition shall close only in the event Xxxxxxx is able to
acquire at least 80%
3
of the outstanding SNC Common Stock from accredited investors.
4. PRE-CLOSING EVENTS. The Closing is subject to the completion at or about
the time of Closing of the following:
(a) Xxxxxxx shall restate its Certificate of Incorporation in the State of
Delaware in substantially the form attached hereto as Exhibit "D" and shall have
authorized 50,000,000 shares of $.0001 par value common stock and 5,000,000
shares of $.0001 par value preferred stock. The preferred stock shall be subject
to issuance in such series and with such rights, preferences and designations as
determined in the sole discretion of the board of directors.
(b) Xxxxxxx shall have effectuated the Forward Split at or about the
Closing, and shall have 2,441,713 shares of its common stock issued and
outstanding and no other shares of capital stock issued or outstanding.
(c) Xxxxxxx shall demonstrate to the reasonable satisfaction of SNC that it
has no material assets other than the proceeds of the Xxxxxxx Financing as
described herein, and no liabilities contingent or fixed.
5. EXCHANGE OF SECURITIES. As of the Initial Closing Date (as defined
herein) each of the following shall occur:
(a) All shares of SNC Common Stock held by accredited SNC Stockholders who
have accepted the Xxxxxxx offer, assuming at least 80% of the outstanding shares
of SNC Common Stock is covered, shall be exchanged for Xxxxxxx Shares. All such
outstanding shares of SNC Common Stock shall be deemed, after Closing, to be
owned by Xxxxxxx. The holders of such certificates previously evidencing shares
of SNC Common Stock outstanding immediately prior to the Closing Date shall
cease to have any rights with respect to such shares of SNC Common Stock except
as otherwise provided herein or by law;
(b) Any shares of SNC Common Stock held in the treasury of SNC immediately
prior to the Closing Date shall automatically be canceled and extinguished
without any conversion thereof and no payment shall be made with respect
thereto;
(c) The 2,441,713 shares of Xxxxxxx common stock previously issued and
outstanding immediately prior to the Closing, after giving effect to the Forward
Split, will remain outstanding.
(d) Xxxxxxx Warrants shall be exchanged for the SNC Warrants to the extent
said exchange is accepted by accredited SportsNuts' Warrantholders.
6. OTHER EVENTS OCCURRING AT CLOSING. At Closing, the following shall be
accomplished:
(a) Xxxxxxx shall file a restatement to its Certificate of Incorporation
with the Secretary
4
of State of the State of Delaware in substantially the form attached hereto as
Exhibit "D" effecting a restatement to its Certificate of Incorporation to
reflect a name change and revised authorized capitalization all as set forth in
Exhibit "D".
(b) The resignation of the existing Xxxxxxx officers and directors and
appointment of new officers and directors as directed by SNC.
(c) Xxxxxxx shall have completed a private offering under Regulation D,
Rule 506, as promulgated by the Securities and Exchange Commission ("SEC") under
the Securities Act of 1933, as amended, of 1,000,000 shares of its common stock
at $1.00 per share. The gross proceeds of this offering (the "Xxxxxxx
Financing") shall be $1,000,000, which amount, less agreed upon costs, shall be
delivered to the control of new management of Xxxxxxx at Closing in good funds.
The Xxxxxxx Financing shall have been completed in compliance with all
applicable state and federal securities laws and the restricted securities sold
shall be delivered at Closing to the investors in the Xxxxxxx Financing.
(d) Xxxxxxx shall adopt a Stock Option Plan at Closing to include up to
15,000,000 shares of its common stock. The Plan shall include "incentive" stock
options under Section 422 of the Internal Revenue Code of 1986, as amended and
other options and similar rights.
7. DELIVERY OF CERTAIN SHARES. On or as soon as practicable after the
Closing Date, SNC will use its best efforts to cause the SNC Stockholders to
surrender certificates for cancellation representing their shares of SNC Common
Stock, against delivery of certificates representing the Xxxxxxx Shares for
which the shares of SNC Common Stock are to be exchanged at Closing.
8. REPRESENTATIONS OF SNC STOCKHOLDERS. Each SNC Stockholder hereby
represents and warrants each only as to its own SNC Common Stock, effective this
date and the Closing Date as follows:
(a) Except as may be set forth in Exhibit "A", the SNC Common Stock is free
from claims, liens, or other encumbrances, and at the Closing Date said SNC
Stockholder will have good title and the unqualified right to transfer and
dispose of such SNC Common Stock.
(b) Said SNC Stockholder is the sole owner of the issued and outstanding
SNC Common Stock as set forth in Exhibit "A";
(c) Said SNC Stockholder has no present intent to sell or dispose of the
Xxxxxxx Shares and is not under a binding obligation, formal commitment, or
existing plan to sell or otherwise dispose of the Xxxxxxx Shares.
9. REPRESENTATIONS OF SNC. SNC hereby represents and warrants as follows,
which warranties and representations shall also be true as of the Closing Date:
5
(a) Except as noted on Exhibit "A", the SNC Stockholders listed on the
attached Exhibit "A" are the sole owners of record and beneficially of the
issued and outstanding common stock of SNC.
(b) SNC has no outstanding or authorized capital stock, warrants, options
or convertible securities other than as described in the SNC Financial
Statements or on Xxxxxxxx "X", "X" and "C", attached hereto.
(c) The audited financial statements as of and for the periods ended
December 31, 1997 and unaudited financial statements for the period ended
December 31, 1998, which have been delivered to Xxxxxxx (hereinafter referred to
as the "SNC Financial Statements") are complete and accurate and fairly present
the financial condition of SNC as of the dates thereof and the results of its
operations for the periods covered. Prior to Closing, SportsNuts shall deliver
audited financial statements for the period ended December 31, 1998, which shall
not show any material variations from the unaudited statements for said period.
There are no material liabilities or obligations, either fixed or contingent,
not disclosed in the SNC Financial Statements or in any exhibit thereto or notes
thereto other than contracts or obligations in the ordinary course of business;
and no such contracts or obligations in the ordinary course of business
constitute liens or other liabilities which materially alter the financial
condition of SNC as reflected in the SNC Financial Statements. SNC has good
title to all assets shown on the SNC Financial Statements subject only to
dispositions and other transactions in the ordinary course of business, the
disclosures set forth therein and liens and encumbrances of record. The SNC
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied (except as may be indicated therein
or in the notes thereto) and fairly present the financial position of SNC as of
the dates thereof and the results of its operations and changes in financial
position for the periods then ended.
(d) Since the date of the SNC Financial Statements, there have not been any
material adverse changes in the financial position of SNC except changes arising
in the ordinary course of business, which changes will in no event materially
and adversely affect the financial position of SNC.
(e) SNC is not a party to any material pending litigation or, to its best
knowledge, any governmental investigation or proceeding, not reflected in the
SNC Financial Statements, and to its best knowledge, no material litigation,
claims, assessments or any governmental proceedings are threatened against SNC.
(f) SNC is in good standing in its jurisdiction of incorporation, and is in
good standing and duly qualified to do business in each jurisdiction where
required to be so qualified except where the failure to so qualify would have no
material negative impact on SNC.
(g) SNC has (or, by the Closing Date, will have filed) all material tax,
governmental and/or related forms and reports (or extensions thereof) due or
required to be filed and has (or will have) paid or made adequate provisions for
all taxes or assessments which have become due as of the Closing Date.
6
(h) SNC has not materially breached any material agreement to which it is a
party. SNC has previously given Xxxxxxx copies or access thereto of all material
contracts, commitments and/or agreements to which SNC is a party including all
relationships or dealings with related parties or affiliates.
(i) SNC has no subsidiary corporations except as described in writing to
Xxxxxxx.
(j) SNC has made all material corporate financial records, minute books,
and other corporate documents and records available for review to present
management of Xxxxxxx prior to the Closing Date, during reasonable business
hours and on reasonable notice.
(k) The execution of this Agreement does not materially violate or breach
any material agreement or contract to which SNC is a party and has been duly
authorized by all appropriate and necessary corporate action under Delaware of
other applicable law and SNC, to the extent required, has obtained all necessary
approvals or consents required by any agreement to which SNC is a party.
(l) SNC has complied with all applicable state and federal securities laws
in connection with the offer, sale and issuance of all securities issued by it
since its inception.
(m) All disclosure information regarding SNC which is to be set forth in
disclosure documents of Xxxxxxx or otherwise delivered to Xxxxxxx by SNC for use
in connection with the Acquisition described herein is true, complete and
accurate in all material respects.
10. REPRESENTATIONS OF XXXXXXX AND XXXXXXX. Xxxxxxx, and Xxxxxxx to the
best of his knowledge, hereby jointly and severally represent and warrant as
follows, each of which representations and warranties shall continue to be true
as of the Closing Date:
(a) As of the Closing Date, the Xxxxxxx Shares, to be issued and delivered
to the SNC Stockholders hereunder will, when so issued and delivered,
constitute, duly authorized, validly and legally issued shares of Xxxxxxx common
stock, fully-paid and nonassessable. Xxxxxxx shall have completed its Forward
Split wherein each holder of Xxxxxxx Shares shall have received 2.213 shares of
the Xxxxxxx Shares for each Xxxxxxx Shares previously held. The total number of
Xxxxxxx shares of common stock outstanding shall be 2,441,713. No shares of
Xxxxxxx preferred stock, shall be outstanding.
(b) Xxxxxxx has the corporate power to enter into this Agreement and to
perform its respective obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the board of directors of Xxxxxxx. The execution and
performance of this Agreement will not constitute a material breach of any
agreement, indenture, mortgage, license or other instrument or document to which
Xxxxxxx is a party and will not violate any judgment, decree, order, writ, rule,
statute, or regulation applicable to Xxxxxxx or its properties. The execution
and performance of this Agreement will not violate or conflict with any
provision of the Certificate
7
of Incorporation or by-laws of Xxxxxxx.
(c) Xxxxxxx has delivered to SNC (or shall deliver prior to Closing) a true
and complete copy of its audited financial statements for the years ended
December 31, 1997 and 1998 (the "Xxxxxxx Financial Statements"). The Xxxxxxx
Financial Statements are complete, accurate and fairly present the financial
condition of Xxxxxxx as of the dates thereof and the results of its operations
for the periods then ended. There are no material liabilities or obligations
either fixed or contingent not reflected therein. The Xxxxxxx Financial
Statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and fairly present the financial position of Xxxxxxx as of
the dates thereof and the results of its operations and changes in financial
position for the periods then ended.
(d) Since December 31, 1998, there have not been any material adverse
changes in the financial condition of Xxxxxxx except with regard to
disbursements to pay reasonable and ordinary expenses in connection with
maintaining its corporate status and pursuing the matters contemplated in this
Agreement. Prior to Closing, all accounts payable and other liabilities of
Xxxxxxx shall be paid and satisfied in full and Xxxxxxx shall have no
liabilities either contingent or fixed.
(e) Xxxxxxx is not a party to or the subject of any pending litigation,
claims, or governmental investigation or proceeding not reflected in the Xxxxxxx
Financial Statements or otherwise disclosed herein, and there are no lawsuits,
claims, assessments, investigations, or similar matters, to the best knowledge
of Heiselt, threatened or contemplated against or affecting Xxxxxxx, its
management or its properties.
(f) Xxxxxxx is duly organized, validly existing and in good standing under
the laws of the State of Delaware; has the corporate power to own its property
and to carry on its business as now being conducted and is duly qualified to do
business in any jurisdiction where so required except where the failure to so
qualify would have no material negative impact on it.
(g) Xxxxxxx has filed all federal, state, county and local income, excise,
property and other tax, governmental and/or related returns, forms, or reports,
which are due or required to be filed by it prior to the date hereof, except
where the failure to do so would have no material adverse impact on Xxxxxxx, and
has paid or made adequate provision in the Xxxxxxx Financial Statements for the
payment of all taxes, fees, or assessments which have or may become due pursuant
to such returns or pursuant to any assessments received. Xxxxxxx is not
delinquent or obligated for any tax, penalty, interest, delinquency or charge.
(h) There are no existing options, calls, warrants, preemptive rights or
commitments of any character relating to the issued or unissued capital stock or
other securities of Xxxxxxx, except as contemplated in this Agreement.
(i) The corporate financial records, minute books, and other documents and
records of
8
Xxxxxxx have been made available to SNC prior to the Closing and shall be
delivered to new management of Xxxxxxx at Closing.
(j) Xxxxxxx has not breached, nor is there any pending, or to the knowledge
of management, any threatened claim that Xxxxxxx has breached, any of the terms
or conditions of any agreements, contracts or commitments to which it is a party
or by which it or its assets are is bound. The execution and performance hereof
will not violate any provisions of applicable law or any agreement to which
Xxxxxxx is subject. Xxxxxxx hereby represents that it has no business operations
or material assets and it is not a party to any material contract or commitment
other than appointment documents with its transfer agent, and that it has
disclosed to SNC all relationships or dealings with related parties or
affiliates.
(k) Xxxxxxx common stock is currently approved for quotation on the OTC
Bulletin Board under the symbol "DWOD" and there are no stop orders in effect
with respect thereto.
(l) Xxxxxxx has complied with all applicable state and federal securities
laws in connection with the offer, sale and issuance of all securities issued by
it since its inception.
(m) All information regarding Xxxxxxx which has been provided to SNC or
otherwise disclosed in connection with the transactions contemplated herein, is
true, complete and accurate in all material respects. Xxxxxxx and Xxxxxxx
specifically disclaim any responsibility regarding disclosures as to SNC, its
business or its financial condition.
11. CLOSING. The Initial Closing of the transactions contemplated herein
shall take place on such date (the "Closing") as mutually determined by the
parties hereto when all conditions precedent have been met and all required
documents have been delivered, which Closing is expected to take place on or
about April 6, 1999, but no later than April 30, 1999, unless extended by mutual
consent of all parties hereto. The "Closing Date" of the transactions described
herein (the "Acquisition"), shall be that date on which all conditions set forth
herein have been met and the Xxxxxxx Shares are issued in exchange for the SNC
Common Stock. As contemplated in Section 2 hereof, there is expected to be more
than one Closing after the Initial Closing whereat at least 80% of the
outstanding SNC Common Stock is acquired by Xxxxxxx. Such additional Closings
shall be held as are necessary to complete the transactions contemplated herein
subject to the conditions stated herein.
12. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SNC. All obligations of SNC
under this Agreement are subject to the fulfillment, prior to or as of the
Closing and/or the Closing Date, as indicated below, of each of the following
conditions:
(a) The representations and warranties by or on behalf of Heiselt and
Xxxxxxx contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at and
as of the Closing and Closing Date as though such representations and warranties
were made at and as of such time.
9
(b) Xxxxxxx shall have performed and complied with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by it prior to or at the Closing.
(c) On or before the Closing, the board of directors, and shareholders
representing a majority interest the outstanding common stock of Xxxxxxx, shall
have approved in accordance with applicable state corporation law the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein.
(d) On or before the Closing Date, Xxxxxxx shall have delivered to SNC
certified copies of resolutions of the board of directors and shareholders of
Xxxxxxx approving and authorizing the execution, delivery and performance of
this Agreement and authorizing all of the necessary and proper action to enable
Xxxxxxx to comply with the terms of this Agreement including the election of
SNC's nominees to the Board of Directors of Xxxxxxx and all matters outlined
herein.
(e) The Acquisition shall be permitted by applicable law and Xxxxxxx shall
have sufficient shares of its capital stock authorized to complete the
Acquisition.
(f) At Closing, the existing sole officer and director of Xxxxxxx shall
have resigned in writing from all positions as director and officer of Xxxxxxx
effective upon the election and appointment of the SNC nominees.
(g) At the Closing, all instruments and documents delivered to SNC and SNC
Stockholders pursuant to the provisions hereof shall be reasonably satisfactory
to legal counsel for SNC.
(h) The shares of restricted Xxxxxxx capital stock to be issued to SNC
Stockholders and in the Xxxxxxx Financing at Closing will be validly issued,
nonassessable and fully-paid under Delaware corporation law and will be issued
in compliance with all federal, state and applicable corporation and securities
laws.
(i) SNC and SNC Stockholders shall have received the advice of their tax
advisor, if deemed necessary by them, as to all tax aspects of the Acquisition.
(j) SNC shall have received all necessary and required approvals and
consents from required parties and its shareholders.
(k) Xxxxxxx shall have completed the Xxxxxxx Financing and shall have on
hand $1,000,000 in gross proceeds.
(l) At the Closing, Xxxxxxx shall have delivered to SNC an opinion of its
counsel dated as of the Closing to the effect that:
10
(i) Xxxxxxx is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(ii) This Agreement has been duly authorized, executed and delivered
by Xxxxxxx and is a valid and binding obligation of Xxxxxxx enforceable in
accordance with its terms;
(iii) Xxxxxxx through its board of directors and stockholders has
taken all corporate action necessary for performance under this Agreement;
(iv) The documents executed and delivered by Xxxxxxx to SNC and SNC
Stockholders hereunder are valid and binding in accordance with their terms
and vest in SNC Stockholders, as the case may be, all right, title and
interest in and to the Xxxxxxx Shares to be issued pursuant to the terms
hereof, and the Xxxxxxx Shares when issued will be duly and validly issued,
fully-paid and nonassessable;
(v) Xxxxxxx has the corporate power to execute, deliver and perform
under this Agreement;
(vi) Legal counsel for Xxxxxxx is not aware of any liabilities, claims
or lawsuits pending or threatened or otherwise involving Xxxxxxx;
(vii) Durwood's authorized capital stock consists of 50,000,000 shares
of common stock, $.001 par value, of which 1,103,500 shares are issued and
outstanding and 500,000 shares of preferred stock, $.001 par value per
share, of which none are issued or outstanding. The outstanding shares of
common stock have been duly authorized, validly issued and are fully-paid
and non-assessable.
(viii) To our best knowledge there are no outstanding options,
warrants, or other rights calling for the issuance of, and no commitments,
plans or arrangements to issue, any shares of capital stock of Xxxxxxx or
any security convertible into or exchanged for capital stock of Xxxxxxx,
except as described in the Agreement.
13. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF XXXXXXX. All obligations of
Xxxxxxx under this Agreement are subject to the fulfillment, prior to or at the
Closing, of each of the following conditions:
(a) The representations and warranties by SNC and SNC Stockholders
contained in this Agreement or in any certificate or document delivered pursuant
to the provisions hereof shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as of
such time.
(b) SNC shall have performed and complied with, in all material respects,
all covenants, agreements, and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing;
11
(c) SNC shall deliver on behalf of the SNC Stockholders a letter commonly
known as an "Investment Letter," signed by each of said shareholders, in
substantially the form attached hereto as Exhibit "E", acknowledging that the
Xxxxxxx Shares are being acquired for investment purposes and sufficient
documentation to give Xxxxxxx reasonable basis to establish the SNC Stockholders
as Accredited Investors.
(d) SNC shall deliver an opinion of its legal counsel to the effect that:
(i) SNC is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
qualified to do business in any jurisdiction where so required except where
the failure to so qualify would have no material adverse impact on SNC;
(ii) This Agreement has been duly authorized, executed and delivered
by SNC.
(iii) The documents executed and delivered by SNC and SNC Stockholders
to Xxxxxxx hereunder are valid and binding in accordance with their terms
and vest in Xxxxxxx all right, title and interest in and to the SNC Common
Stock, which stock is duly and validly issued, fully-paid and
nonassessable.
14. INDEMNIFICATION. During any applicable statute of limitation period as
to any tax matters, and as to all other matters for a period of two years from
the Closing, Xxxxxxx and Heiselt agree to jointly and severally indemnify and
hold harmless SNC, and SNC agrees to indemnify and hold harmless Xxxxxxx and
Xxxxxxx, against and in respect of any liability, damage or deficiency, all
actions, suits, proceedings, demands, assessments, judgments, costs and expenses
including attorney's fees incident to any of the foregoing, resulting from any
material misrepresentations made by an indemnifying party to an indemnified
party, an indemnifying party's breach of covenant or warranty or an indemnifying
party's nonfulfillment of any agreement hereunder, or from any material
misrepresentation in or omission from any certificate furnished or to be
furnished hereunder.
15. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations, warranties
and covenants made by any party in this Agreement shall survive the Closing and
the consummation of the transactions contemplated hereby for two years from the
Closing. All of the parties hereto are executing and carrying out the provisions
of this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and not upon any
investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
16. DOCUMENTS AT CLOSING. At the Closing, the following documents shall be
delivered:
(a) SNC will deliver, or will cause to be delivered, to Xxxxxxx the
following:
12
(i) a certificate executed by the President and Secretary of SNC to
the effect that all representations and warranties made by SNC under this
Agreement are true and correct as of the Closing, the same as though
originally given to Xxxxxxx on said date;
(ii) a certificate from the jurisdiction of incorporation of SNC dated
at or about the Closing to the effect that SNC is in good standing under
the laws of said jurisdiction;
(iii) Investment Letters in the form attached hereto as Exhibit "C"
executed by each SNC Stockholder and evidence of accreditation;
(iv) such other instruments, documents and certificates, if any, as
are required to be delivered pursuant to the provisions of this Agreement;
(v) certified copies of resolutions adopted by the shareholders and
directors of SNC authorizing this transaction; and
(vi) all other items, the delivery of which is a condition precedent
to the obligations of Xxxxxxx as set forth herein.
(vii) the legal opinion required by Section 12(d) hereof.
(b) Xxxxxxx will deliver or cause to be delivered to SNC:
(i) stock certificates representing the Xxxxxxx Shares to be issued as
a part of the stock exchange as described herein;
(ii) a certificate of the President of Xxxxxxx, to the effect that all
representations and warranties of Xxxxxxx made under this Agreement are
true and correct as of the Closing, the same as though originally given to
SNC on said date;
(iii) certified copies of resolutions adopted by Durwood's board of
directors and Durwood's Stockholders authorizing the Acquisition and all
related matters described herein;
(iv) certificate from the jurisdiction of incorporation of Xxxxxxx
dated at or about the Closing Date that Xxxxxxx is in good standing under
the laws of said state;
(v) opinion of Durwood's counsel as described in Section 11(l) above;
(vi) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(vii) resignation of the existing officer and director of Xxxxxxx;
13
(viii) all corporate and financial records of Xxxxxxx; and
(ix) all other items, the delivery of which is a condition precedent
to the obligations of SNC, as set forth in Section 12 hereof, including the
net proceeds from the Limited Offering not to be less than $950,000.
17. FINDER'S FEES. Xxxxxxx, represents and warrants to SNC, and SNC
represents and warrants to Xxxxxxx that neither of them, or any party acting on
their behalf, has incurred any liabilities, either express or implied, to any
"broker" of "finder" or similar person in connection with this Agreement or any
of the transactions contemplated hereby other than the arrangements described in
Section 5(d) hereof. In this regard, Xxxxxxx, on the one hand, and SNC on the
other hand, will indemnify and hold the other harmless from any claim, loss,
cost or expense whatsoever (including reasonable fees and disbursements of
counsel) from or relating to any such express or implied liability other than as
disclosed herein.
18. MISCELLANEOUS.
(a) Further Assurances. At any time, and from time to time, after the
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply with any
of its obligations, agreements or conditions hereunder may be waived in writing
by the party to whom such compliance is owed.
(c) Amendment. This Agreement may be amended only in writing as agreed to
by all parties hereto.
(d) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first class registered or certified mail, return receipt requested.
(e) Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(g) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware.
14
(h) Arbitration. All disputes hereunder shall be resolved by binding
arbitration in Salt Lake City, Utah before a single arbitrator in accordance
with the applicable rules of the American Arbitration Association then in
effect. Judgment of the Arbitrator may be entered in any court having
jurisdiction over the party against whom the judgment is rendered.
(i) Binding Effect. This Agreement shall be binding upon the parties hereto
and inure to the benefit of the parties, their respective heirs, administrators,
executors, successors and assigns.
(j) Entire Agreement. This Agreement and the attached Exhibits constitute
the entire agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof.
(k) Time. Time is of the essence.
(l) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
XXXXXXX, INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx, President
/s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx, individually
XXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx Xxxxxxx
-------------------------- -------------------------------------
Xxxxxxx Xxxxx, Secretary Xxxxxxx Xxxxxxx, President
15
EXHIBIT "A"
TO AGREEMENT AND PLAN OF REORGANIZATION
LIST OF SNC STOCKHOLDERS, WARRANTHOLDERS AND OPTIONHOLDERS
16
EXHIBIT "B"
TO AGREEMENT AND PLAN OF REORGANIZATION
OUTLINE OF TERMS AND FORM OF XXXXXXX WARRANT
In consideration for services rendered to it and in consideration for financial
sums provided to it, SportsNuts issued warrants to twenty individuals to acquire
5,910,000 shares of Common Stock at an exercise price of $0.50 per share. Each
of the warrants are exercisable for a period of two years from the date of
grant, ranging from June 30, 2000 to January 14, 2001. These SportsNuts warrants
will be exchanged for warrants to acquire in the aggregate 3,870,487 shares of
the Company's common stock exercisable at $.76 per share.
17
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER,
PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
Void after 5:00 p.m., Mountain Standard Time
on ____________________
XXXXXXXXXX.XXX INTERNATIONAL, INC.
WARRANT
This certifies that, for value received, _________________, or registered
assigns (the "Holder"), is entitled to purchase at a price of _______________
($________) per share (the "Exercise Price"), subject to the provisions of this
Warrant, from XXXXXXXXXX.XXX INTERNATIONAL, INC., a Delaware corporation, (the
"Company"), ______________________ (________________) shares of the unregistered
Common Stock of the Company (the "Warrant Stock").
1. Exercise of Warrant. This Warrant may be exercised in whole or in part
at any time or from time to time on or after the date hereof, but not later than
5:00 p.m., Mountain Standard Time, on
, , or if such date is a day on which federal or state chartered
banking institutions are authorized by law to close, then on the next succeeding
day which shall not be such a day, by presentation and surrender thereof to the
Company at its principal office or at the office of its stock transfer agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by
payment, in cash or by certified or official bank check, payable to the order of
the Company, of the Exercise Price for the number of shares of Warrant Stock
specified in such form, together with all taxes applicable upon such exercise.
If this Warrant should be exercised in part only, the Company shall upon
surrender of this Warrant for cancellation, execute and deliver a new Warrant of
the same tenor evidencing the right of the Holder to purchase the balance of the
shares of Warrant Stock purchasable hereunder upon the same terms and conditions
as herein set forth. Upon and as of receipt by the Company of this Warrant at
the office or stock transfer agent of the Company, in proper form for exercise,
and accompanied by payment as herein provided, the Holder shall be deemed to be
the holder of record of the shares of Warrant Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Warrant Stock shall not
then be actually delivered to the Holder.
2. Reservation of Shares. The Company hereby covenants and agrees that at
all times during the period this Warrant is exercisable it shall reserve from
its authorized and unissued
18
shares of Common Stock for issuance and delivery upon exercise of this Warrant
such number of shares of its Warrant Stock as shall be required for issuance and
delivery upon exercise of this Warrant. The Company agrees that its issuance of
this Warrant shall constitute full authority to its officers who are charged
with the duty of executing stock certificates to execute and issue the necessary
certificates for the shares of Warrant Stock upon the exercise of this Warrant.
3. Fractional Shares. No fractional shares or stock representing fractional
shares shall be issued upon the exercise of this Warrant. In lieu of any
fractional shares which would otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the fair market value of one
share of the Warrant Stock on the date of exercise, as determined in good faith
by the Company's Board of Directors.
4. Transfer, Exchange, Assignment or Loss of Warrant.
(a) This Warrant may not be assigned or transferred except as provided
herein and in accordance with and subject to the provisions of the Securities
Act of 1933 and the Rules and Regulations promulgated thereunder (said Act and
such Rules and Regulations being hereinafter collectively referred to as the
"Act"). Any purported transfer or assignment made other than in accordance with
this Section 4 and Section 8 hereof shall be null and void and of no force and
effect.
(b) This Warrant may be transferred or assigned only with the written
consent of the Company, which shall not be unreasonably withheld. In addition,
this Warrant shall be transferable only upon the opinion of counsel satisfactory
to the Company, which may be counsel to the Company, that (i) the transferee is
a person to whom the Warrant may be legally transferred without registration
under the Act; and (ii) such transfer will not violate any applicable law or
governmental rule or regulation including, without limitation, any applicable
federal or state securities law, as further referenced in Section 8 below. Prior
to the transfer or assignment, the assignor or transferor shall reimburse the
Company for its reasonable expenses, including attorneys' fees, incurred in
connection with the transfer or assignment.
(c) Any assignment permitted hereunder shall be made by surrender of
this Warrant to the Company at its principal office with the Assignment Form
annexed hereto duly executed and funds sufficient to pay any transfer tax. In
such event the Company shall, without charge, execute and deliver a new Warrant
in the name of the assignee named in such instrument of assignment and this
Warrant shall promptly be canceled. This Warrant may be divided or combined with
other Warrants which carry the same rights upon presentation thereof at the
principal office of the Company together with a written notice signed by the
Holder thereof, specifying the names and denominations in which new Warrants are
to be issued. The terms "Warrant" and "Warrants" as used herein includes any
Warrants in substitution for or replacement of this Warrant, or into which this
Warrant may be divided or exchanged.
19
(d) Upon receipt by the Company of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, the Company will
execute and deliver a new Warrant of like tenor and date and any such lost,
stolen, destroyed or mutilated Warrant shall thereupon become void. Any such new
Warrant executed and delivered shall constitute an additional contractual
obligation on the part of the Company, whether or not the Warrant so lost,
stolen, destroyed or mutilated shall be at any time enforceable by anyone.
(e) Each Holder of this Warrant, the shares of Warrant Stock issued
hereunder or any other security issued or issuable upon the exercise of this
Warrant shall indemnify and hold harmless the Company, its directors and
officers, and each person, if any, who controls the Company, against any losses,
claims, damages or liabilities, joint or several, to which the Company or any
such director, officer or any such person may become subject under the Act or
statute or common law, insofar as such losses, claims, damages or liabilities,
or actions in respect thereof, arise out of or are based upon the disposition by
such Holder of the Warrant, the shares of Warrant Stock acquired under the
Warrant, or other such securities in violation of this Warrant.
5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a shareholder in the Company, either at law or equity,
and the rights of the Holder are limited to those expressed in this Warrant and
are not enforceable against the Company except to the extent set forth herein.
6. Adjustment of Exercise Price and Number of Shares. The number and kind
of securities issuable upon the exercise of this Warrant and the Exercise Price
of such securities shall be subject to adjustment from time to time upon the
happening of certain events as follows:
(a) Adjustment for Dividends in Stock. In case at any time or from time
to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received, or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive without payment therefor, other or additional stock of the
Company by way of dividend, then and in each case, the Holder of this Warrant
shall, upon the exercise hereof be entitled to receive, in addition to the
number of shares of Warrant Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of such other or additional
stock of Company which such Holder would hold on the date of such exercise had
it been the holder of record of such shares of Warrant Stock on the date hereof
and had thereafter, during the period from the date hereof to and including the
additional stock receivable by it as aforesaid during such period, giving effect
to all adjustments called for during such period by paragraphs (a) and (b) of
this Section 6.
(b) Adjustment for Reclassification, Reorganization or Merger. In case
of any
20
reclassification or change of the outstanding securities of the Company or of
any reorganization of the Company (or any other corporation the stock or
securities of which are at the time receivable upon the exercise of this
Warrant) on or after the date hereof, or in case, after such date, the Company
(or any such other corporation) shall merge with or into another corporation or
convey all or substantially all of its assets to another corporation, then and
in each such case the Holder of this Warrant, upon the exercise hereof at any
time after the consummation of such reclassification, change, reorganization,
merger or conveyance, shall be entitled to receive, in lieu of the stock or
other securities and property receivable upon the exercise hereof prior to such
consummation, the stock or other securities or property which such Holder would
have been entitled upon such consummation if such Holder had exercised this
Warrant immediately prior thereto. In each such case, the terms of this Section
6 shall be applicable to the shares of stock or other securities properly
receivable upon the exercise of this Warrant after such consummation.
(c) Stock Splits and Reverse Stock Splits. If at any time on or after
the date hereof the Company shall subdivide its outstanding shares of Warrant
Stock into a greater number of shares, the Exercise Price in effect immediately
prior to such subdivision shall thereby be proportionately reduced and the
number of shares of Warrant Stock receivable upon exercise of the Warrant shall
thereby be proportionately increased; and, conversely, if at any time on or
after the date hereof the outstanding number of shares of Warrant Stock shall be
combined into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall thereby be proportionately increased
and the number of shares of Warrant Stock receivable upon exercise of the
Warrant shall thereby be proportionately decreased.
7. Officer's Certificate. Whenever the Exercise Price or the number of
shares of Warrant Stock that may be acquired under the Warrant shall be adjusted
as required by the provisions of Section 6 hereof, the Company shall forthwith
file with its Secretary or an Assistant Secretary at its principal office, and
with its stock transfer agent, if any, an officer's certificate showing the
adjusted Exercise Price and shares of Warrant Stock determined as herein
provided and setting forth in reasonable detail the facts requiring such
adjustment. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder, and the Company shall, forthwith
after each such adjustment, deliver a copy of such certificate to the Holder.
8. Transfer to Comply with the Securities Act of 1933.
(a) This Warrant and the shares of Warrant Stock issued hereunder or
any other security issued or issuable upon exercise of this Warrant may not be
sold, transferred or otherwise disposed of, except to a person who, in the
opinion of counsel reasonably satisfactory to the Company, is a person to whom
this Warrant or such shares of Warrant Stock may legally be transferred pursuant
to Section 4 hereof without registration and without the delivery of a current
prospectus under the Act with respect thereto and then only against receipt of
an agreement of such person to comply with the provision of this Section 8 with
respect to any resale or other disposition of such securities unless, in the
opinion of such counsel, such agreement is not required.
21
(b) The Company may cause the following legend to be set forth on each
certificate representing shares of Warrant Stock acquired under this Warrant or
any other security issued or issuable upon exercise of this Warrant, unless
counsel for the Company is of the opinion as to any such certificate that such
legend is unnecessary:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") OR APPLICABLE STATE LAW AND MAY NOT BE OFFERED, SOLD, OR
OTHERWISE TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER THE ACT OR STATE LAW OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER OF THE SECURITIES, SUCH OFFER, SALE, OR TRANSFER,
PLEDGE, OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
9. Governing Law. This Warrant shall be governed by, and construed in
accordance with, the laws of the State of Utah excluding that body of law
pertaining to conflicts of law.
10. Notice. Notices and other communications to be given to the Holder of
the Warrants evidenced by this certificate shall be delivered by hand or mailed,
postage prepaid, to ______________________________________________, or such
other address as the Holder shall have designated by written notice to the
Company as provided herein. Notices or other communications to the Company shall
be deemed to have been sufficiently given if delivered by hand or mailed postage
prepaid to the Company at The Towers at South Towne #2, 00000 Xxxxx 000 Xxxx,
Xxxx Xxxx Xxxx, XX 00000, attn: Xxxxxxx X. Xxxxx, or such other address as the
Company shall have designated by written notice to such registered owner as
herein provided. Notice by mail shall be deemed given when deposited in the
United States mail, postage prepaid, as herein provided.
IN WITNESS WHEREOF, the Company has executed this Warrant as of the _____
day of April, 1999.
XXXXXXXXXX.XXX INTERNATIONAL, INC.
By: ________________________________
Its: _______________________________
22
PURCHASE FORM
Dated:
The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of purchasing _________ shares of Warrant Stock, and hereby makes
payment of $________ in payment of the actual exercise price thereof.
Signature
------------------------------------
ASSIGNMENT FORM
Dated:
FOR VALUE RECEIVED, _______________________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(please type or print)
________________________________________________________________________________
(address)
the right to purchase shares of Warrant Stock represented by this Warrant to the
extent of shares as to which such right is exercisable, and does hereby
irrevocably constitute and appoint the Company and/or its transfer agent as
attorney to transfer the same on the books of the Company with full power of
substitution in the premises.
---------------------------------
Signature
23
EXHIBIT "C"
TO AGREEMENT AND PLAN OF REORGANIZATION
Outline of Terms and Form of Option
24
EXHIBIT "D"
TO AGREEMENT AND PLAN OF REORGANIZATION
Form of Restatement to Certificate of Incorporation
25
RESTATED CERTIFICATE OF INCORPORATION
Xxxxxxx, Inc., a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows:
1. The name of the corporation is Xxxxxxx, Inc., and it was originally
incorporated under the same name, and the original Certificate of Incorporation
of the corporation was filed with the Secretary of State of the State of
Delaware on July 12, 1996.
2. Pursuant to Section 242 and 245 of the General Corporation Law of the
State of Delaware, this Restated Certificate of Incorporation restates and
integrates and further amends the provisions of the Certificate of Incorporation
of this corporation.
3. The text of the Restated Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as follows:
CERTIFICATE OF INCORPORATION
OF
XXXXXXXXXX.XXX INTERNATIONAL, INC.
ARTICLE I. NAME
The name of the corporation is XXXXXXXXXX.XXX INTERNATIONAL, INC. (the
"Corporation").
ARTICLE II. REGISTERED OFFICE
The address of the Corporation's registered office in the State of Delaware
is Corporation Service Company, 0000 Xxxxxx Xxxx, xx xxx Xxxx xx Xxxxxxxxxx,
Xxxxxx of New Castle and its registered agent at such address is CORPORATION
SERVICE COMPANY.
ARTICLE III. PURPOSE
The purpose or purposes of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
ARTICLE IV. CAPITAL STOCK
The Corporation is authorized to issue two classes of shares to be
designated, respectively, "Preferred Stock" and "Common Stock". The number of
shares of Preferred Stock authorized to be issued is Five Million (5,000,000).
The number of shares of Common Stock authorized to be issued is Fifty Million
(50,000,000). The Preferred Stock and the Common Stock shall each have a par
value of $.0001 per share.
26
(a) Provisions Relating to the Common Stock. Each holder of Common
Stock is entitled to one vote for each share of Common Stock standing in
such holder's name on the records of the Corporation on each matter
submitted to a vote of the stockholders, except as otherwise required by
law.
(b) Provisions Relating to Preferred Stock. The Board of Directors (the
"Board") is authorized, subject to limitations prescribed by law and the
provisions of this Article IV, to provide for the issuance of the shares of
Preferred Stock in accordance with Sections 102(a) and 151(a) of the
General Corporation Law of Delaware, in one or more series, and by filing a
certificate pursuant to the applicable law of the State of Delaware, to
establish from time to time the number of shares to be included in each
such series, and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualification, limitations or
restrictions thereof.
ARTICLE V. BOARD OF DIRECTORS
(a) Number. The number of directors constituting the entire Board shall
be as fixed from time to time by vote of a majority of the entire Board,
provided, however, that the number of directors shall not be reduced so as
to shorten the terms of any director at any time in office.
(b) Classified Board. The Board shall be divided into three classes, as
nearly equal in numbers as the then total number of directors constituting
the entire Board permits with the term of office of one class expiring each
year. At the first annual meeting of the stockholders, directors of the
first class will be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class will be elected to
hold office for a term expiring at the second succeeding annual meeting,
and directors of the third class will be elected to hold office for a term
expiring at the third succeeding annual meeting.
(c) Vacancies. Vacancies on the Board shall be filled by the
affirmative vote of the majority of the remaining directors, though less
than a quorum of the Board, or by election at an annual meeting or at a
special meeting of the stockholders called for that purpose.
(d) Election of directors need not be by written ballot.
ARTICLE VI. BY-LAWS
In furtherance and not in limitation of the powers conferred by statute,
the Board is expressly authorized to make, alter, amend or repeal the By-Laws of
the Corporation.
ARTICLE VII. LIABILITY
To the fullest extent permitted by the Delaware General Corporation Law as
the same
27
exists or as may hereafter be amended, no director of the Corporation shall be
personally liable to the Corporation or its stockholders for or with respect to
any acts or omissions in the performance of his or her duties as a director of
the Corporation. Any amendment or repeal of this Article VII will not eliminate
or reduce the affect of any right or protection of a director of the Corporation
existing immediately prior to such amendment or repeal.
ARTICLE VIII. SPECIAL VOTING REQUIREMENTS
The following actions, when submitted to the stockholders of the
Corporation for their consideration, shall require the affirmative vote of at
least 66 2/3% of the outstanding Common Stock of the Corporation: amendment of
Sections (a), (b), or (c) of Article V of the Certificate of Incorporation. The
foregoing voting requirements shall not otherwise be deemed to affect the voting
rights granted by this Certificate of Incorporation, the By-laws, or the
Delaware General Corporation Law, to the Board.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed under the seal of the Corporation this 6th day of April, 1999.
XXXXXXX, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
Xxxxxx Xxxxxxx, President and Secretary
28
EXHIBIT "E"
TO AGREEMENT AND PLAN OF REORGANIZATION
Form of Investment Letter
