EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER is made this 18th day of March, 2003,
by and among WENTWORTH II, INC., a Delaware corporation having its principal
place of business at c/o Strategic Asset Management LLC, 000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 ("Wentworth"), NATURAL GOLF
ACQUISITION CORP.., a Delaware corporation having its principal place of
business at c/o Strategic Asset Management LLC, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxx 00000 ("Natural Golf Acquisition Corp.") and NATURAL GOLF
CORPORATION, an Illinois corporation having its principal place of business at
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxxx, Xxxxxxxx 00000 ("Natural
Golf"). Wentworth, Natural Golf Acquisition Corp. and Natural Golf are
hereinafter sometimes collectively referred to as "Parties" and individually as
"Party."
WHEREAS, Natural Golf is authorized to issue 4,000,000 shares of common
stock, no par value per share, of which Natural Golf has outstanding an
aggregate of 2,362,641 shares of common stock, warrants to purchase 529,108
shares of common stock and debentures and notes convertible into 1,067,358
shares of common stock (the common stock issued and outstanding, underlying the
warrants and issuable upon conversion of outstanding debentures and notes, is
hereinafter collectively referred to as the Shares); and
WHEREAS, Wentworth is authorized to issue 40,000,000 shares of common
stock, par value $.01 per share (the "Wentworth Common Stock"), of which 200,000
shares (the "Issued Wentworth Shares") are issued and outstanding and 10,000,000
shares of preferred stock, par value $.01 share (the "Wentworth Preferred
Stock"), of which no shares are issued or outstanding. The Wentworth Common
Stock and the Wentworth Preferred Stock are referred to collectively herein as
the "Wentworth Shares"; and
WHEREAS, Natural Golf Acquisition Corp. is a wholly owned subsidiary of
Wentworth and is authorized to issue 1,000 shares of common stock, par value
$.01 (referred to as the "Natural Golf Acquisition Corp. Shares"), all of which
such Natural Golf Acquisition Corp. Shares are issued and outstanding and owned
by Wentworth; and
WHEREAS, the respective Boards of Directors of Wentworth, Natural Golf
Acquisition Corp. and Natural Golf (together with Wentworth and Natural Golf
Acquisition Corp., the "Companies") deem it advisable and generally to the
advantage and welfare of each respective Company, and their respective
shareholders, that Natural Golf Acquisition Corp. be merged with and into
Natural Golf (following the Effective Time, the "Surviving Corporation") under
the terms and conditions hereinafter set forth (the "Merger"), the Merger to be
effected pursuant to the Delaware General Corporation Law and the Illinois
Business Corporation Act and the Merger to be a tax free reorganization under
Section 368(a)(1)(A) and 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the premises, covenants and
conditions hereof, the parties hereto do mutually agree as follows:
1. VOTES ON MERGER AND RELATED MATTERS. Natural Golf Acquisition Corp. and
Natural Golf (the "Constituent Corporations") shall each, as soon as practicable
but prior to Closing (as defined below) (i) cause a special meeting of its
1
shareholders, to be called to consider and vote upon the Merger on the terms and
conditions hereinafter set forth, or (ii) obtain written consent of such
shareholders, as is necessary to approve the Merger. If the Merger is approved
in accordance with applicable law, subject to the further conditions and
provisions of this Agreement, a closing of this Agreement shall be held (the
"Closing") and a Certificate of Merger and Articles of Merger, and all other
documents or instruments deemed necessary, convenient or appropriate by the
parties hereto to effect the Merger, shall be executed and filed with the
Secretary of State of the States of Delaware and Illinois, respectively, as
promptly as possible thereafter. The Certificate of Merger and Articles of
Merger so filed shall be substantially in the form of Exhibits A and B annexed
hereto, with such changes therein as the respective Boards of Directors of
Natural Golf Acquisition Corp. and Natural Golf shall mutually approve. The time
when the last of the Certificate of Merger or Articles of Merger become
effective is referred to herein as the "Effective Time."
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF NATURAL GOLF. Natural Golf
represents, warrants and covenants as follows, except to the extent set forth on
the schedule of exceptions in SCHEDULE A that is annexed hereto and made a part
hereof, with such exceptions to apply solely to the representations as to which
they are scheduled except to the extent otherwise specifically cross-referenced:
2.1. ORGANIZATION; CAPITALIZATION. Natural Golf is, and on the effective
date of the Merger (the "Effective Date") will be, a duly organized and a
validly existing corporation in good standing under the laws of the State of
Illinois, and has all requisite corporate power and authority to own its
properties and operate its business as presently conducted. There are issued and
outstanding, and on the Effective Date there will be, issued and outstanding,
only the 2,362,641 shares of common stock, warrants to purchase 529,108 shares
of common stock and debentures and notes convertible into 1,067,358 shares of
common stock, all of which are, and on the Effective Date will be, duly
authorized and validly issued. Other than the securities set forth in the last
sentence, there are, and on the Effective Date there will be, no outstanding
rights, options or warrants to purchase any equity interest in Natural Golf, and
there will be no other issued or outstanding securities of any nature
convertible into or exercisable or exchangeable for equity securities of Natural
Golf.
2.2. AUTHORITY. Natural Golf has, and on the Effective Date will have, full
power and authority to enter into this Agreement and, subject to any required
shareholder or other third party approval in accordance with the laws of the
State of Illinois, to consummate the transactions contemplated hereby. This
Agreement and the transactions contemplated hereby have been duly approved by
all requisite corporate action on the part of Natural Golf and, prior to the
Closing, will have been approved by all shareholders of Natural Golf whose
consent is required under applicable law and the Articles of Incorporation, as
amended, and Bylaws (collectively the "Organizational Documents") of Natural
Golf.
2.3. BINDING AGREEMENT. This Agreement has been duly executed and delivered
by Natural Golf and constitutes the legal, valid and binding obligation of
Natural Golf, enforceable against it in accordance with the terms hereof, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
2
similar laws of general application relating to or affecting the enforcement of
rights hereunder or general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
2.4. NO CONFLICTS. The execution and delivery by Natural Golf of this
Agreement, the consummation and performance of the transactions herein
contemplated, and compliance with the terms of this Agreement by Natural Golf
will not conflict with, result in a breach of or constitute or give rise to a
default under (i) any indenture, mortgage, deed of trust or other agreement,
instrument or contract to which Natural Golf is now a party or by which it or
any of its assets or properties are bound; (ii) Natural Golf's Organizational
Documents; or (iii) any law, order, rule, regulation, writ, injunction, judgment
or decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over Natural Golf or any of its business or
properties wherein such breach could have a material adverse effect on Natural
Golf or any of its business or properties.
2.5. SUBSIDIARIES. Natural Golf has on the Effective Date three wholly
owned subsidiaries: Natural Golf Field Sales Corporation (an Illinois
Corporation), Natural Golf Schools Corporation (an Illinois Corporation), and
Natural Golf Products Corporation (an Illinois Corporation).
2.6. BUSINESS QUALIFICATIONS. Natural Golf is an Illinois corporation.
Natural Golf is, and on the Effective Date will be, qualified or licensed as a
foreign corporation in all jurisdictions where its business or ownership of
assets so requires, except where the failure to be qualified or licensed would
not be reasonably expected to have a material adverse effect on the business of
Natural Golf. The business of Natural Golf does not require it to be registered
as an investment company or investment adviser, as such terms are defined under
the Investment Company Act of 1940 and the Investment Advisers Act of 1940, each
as amended.
2.7. FINANCIAL STATEMENTS. All financial statements of Natural Golf
previously delivered to Wentworth (the "Financial Statements") fairly present in
all material respects the financial pos0ition, results of operations and other
information purported to be shown therein of Natural Golf, at the dates and for
the respective periods to which they apply. All such financial statements have
been prepared in conformity with generally accepted accounting principles
consistently applied throughout the periods involved, and have been adjusted for
all normal and recurring accruals and are incorporated herein by reference.
2.8. MATERIAL ADVERSE CHANGE. There has not been, and on the Effective Date
there will not have been in the aggregate, any material adverse change in the
condition, financial or otherwise, of Natural Golf from November 30, 2002.
2.9. ORDINARY COURSE OF BUSINESS. Except for transactions occurring in the
ordinary course of business, there has not been, and on the Effective Date there
will not have been, any transactions involving Natural Golf since November 30,
2002 in an amount in excess of $75,000.
2.10. LIABILITIES; CLAIMS. There are, and on the Effective Date will be, no
liabilities of (including, but not limited to, tax liabilities) or claims
against Natural Golf (whether such liabilities or claims are contingent or
absolute, direct or indirect, matured or unmatured) not appearing on the
3
Financial Statements, other than (i) liabilities incurred in the ordinary course
of business since November 30, 2002, (ii) taxes accrued on earnings since
November 30, 2002 which are not yet due or payable, or (iii) liabilities which
in the aggregate do not exceed $25,000.
2.11. TAX RETURNS. All federal, state, county and local income, excise,
property and other tax returns required to be filed by Natural Golf have been
filed, and all required taxes, fees or assessments have been paid or an adequate
reserve therefor has been established in the Financial Statements. The federal
income tax returns and state and foreign income tax returns of Natural Golf have
not been audited by the Internal Revenue Service ("IRS") or any other taxing
authority within the past five (5) years. Neither the IRS nor any state, local
or other taxing authority has proposed any additional taxes, interest or
penalties with respect to Natural Golf or any of its operations or businesses.
There are no pending, or to the knowledge of Natural Golf, threatened, tax
claims or assessments, and there are no pending, or to the knowledge of Natural
Golf, threatened, tax examinations by any taxing authorities. Natural Golf has
not given any waivers of rights (which are currently in effect) under applicable
statutes of limitations with respect to the federal income tax returns of
Natural Golf for any year.
2.12. TITLE TO ASSETS. Except as provided for in the Financial Statements,
Natural Golf, has, and on the Effective Date will have, good and marketable
title to all of its furniture, fixtures, equipment and other assets owned or
used by Natural Golf, and such assets are owned free and clear of all security
interests, pledges, liens, restrictions and encumbrances of every kind and
nature. Natural Golf is the owner of its inventory as set forth in the Financial
Statements and has good and marketable title thereto.
2.13. ACCOUNTS RECEIVABLE. The accounts receivable as set forth in the
Financial Statements represent amounts due for goods sold or services rendered
by Natural Golf in the ordinary course of business and, except as reserved for
in the Financial Statements, Natural Golf believes are collectable in the
ordinary course of business.
2.14. MATERIAL CONTRACTS. A copy (or summary if oral) of all agreements,
contracts, arrangements, understandings and commitments, whether written or
oral, to which Natural Golf is a party, or from which Natural Golf will receive
substantial benefits and which are material to Natural Golf (collectively,
"Natural Golf Contracts"), has been delivered to Wentworth or its counsel. Any
Natural Golf Contracts entered into between the date hereof and the Effective
Date will be delivered to Wentworth or its counsel prior to Closing. Natural
Golf is not now, nor will it be on the Effective Date, in material default under
any Natural Golf Contract. The validity and enforceability of, and rights of
Natural Golf contained in, each such Natural Golf Contract shall not be
adversely effected by the Merger or the transactions contemplated hereby or any
actions taken in furtherance hereof.
2.15. LEGAL PROCEEDINGS. There are, and on the Effective Date there will
be, no legal, administrative, arbitral or other proceedings, claims, actions or
governmental investigations of any nature pending, or to Natural Golf's
knowledge, threatened, involving Natural Golf, individually or in the aggregate,
in which an unfavorable determination could result (i) in suspension or
termination of Natural Golf's business or authority to conduct such business in
any jurisdiction, (ii) in the payment by Natural Golf of more than $100,000, or
challenging the validity or propriety of the transactions contemplated by this
Agreement, or (iii) material adverse effect on Natural Golf's business or
financial condition. Natural Golf is not a party to any order, judgment or
decree, which will, or might reasonably be expected to, materially adversely
affect the business, operations, properties, assets or financial condition of
Natural Golf.
4
2.16. CERTAIN TRANSACTIONS. Since November 30, 2002, there have been, and
through the Effective Date there will be (i) no bonuses or extraordinary
compensation paid to any of the officers or shareholders of Natural Golf, (ii)
no loans made to or any other transactions with any of the officers or
shareholders of Natural Golf or their families and (iii) no dividends or other
distributions declared or paid by Natural Golf.
2.17. INSURANCE. Natural Golf has, and on the Effective Date will have,
maintained casualty and liability policies and other insurance policies with
respect to its business which are appropriate and customary for businesses
similar in size, industry and risk profile. Copies of all of the policies of
insurance and bonds presently in force with respect to Natural Golf, including
without limitation those covering properties, buildings, machinery, equipment,
worker's compensation, officers and directors and public liability, have been
made available to Wentworth, and summaries of the same have been delivered to
Wentworth. All such insurance is outstanding and in full force and effect, with
all premiums thereon duly paid, and Natural Golf has not received any notice of
cancellation of any such policies.
2.18. INTELLECTUAL PROPERTY. Natural Golf has, and on the Effective Date
will have a number of patents, patent applications, trademarks, trademark
registrations or applications, trade names, copyrights, copyright registrations
and applications, and other intellectual property detailed in Attachment
Schedule 2.18. Natural Golf does not have knowledge of any infringements by it
of any third party's intellectual property.
2.19. COMPLIANCE WITH LAWS. Natural Golf has, and on the Effective Date
will have, in all material respects operated its business and conducted its
affairs in compliance with all applicable laws, rules and regulations, except
where the failure to so comply did not have and would not be expected to have a
material adverse effect on its business, financial condition or property.
2.20. RELATED PARTY CONTRACTS. There are, and on the Effective Date there
will be, no loans, leases or other Natural Golf Contracts outstanding between
Natural Golf and any of its officers, directors or holders of 5% or more of the
Shares or any person related to or affiliated with any such officers, directors
or holders of 5% or more of the Shares.
2.21. OFFICER AND DIRECTOR INFORMATION. During the past five year period
neither Natural Golf, nor any of its officers or directors, nor any person
intended upon consummation of the Merger to be nominated by Natural Golf to
become an officer or director of Wentworth or any successor entity or
subsidiary, has been the subject of:
(a) a petition under the Federal bankruptcy laws or any other
insolvency or moratorium law or has a receiver, fiscal agent or similar
officer been appointed by a court for the business or property of Natural
Golf or such person, or any partnership in which Natural Golf or any such
person was a general partner at or within two years before the time of such
filing, or any corporation or business association of which Natural Golf or
any such person was an executive officer at or within two years before the
time of such filing;
5
(b) a conviction in a criminal proceeding or a named subject of a
pending criminal proceeding (excluding traffic violations which do not
relate to driving while intoxicated or driving under the influence);
(c) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining Natural Golf or any such person from, or otherwise
limiting, the following activities:
i. Acting as a futures commission merchant, introducing broker,
commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the
United States Commodity Futures Trading Commission or an associated
person of any of the foregoing, or as an investment adviser,
underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings
and loan association or insurance company, or engaging in or
continuing any conduct or practice in connection with such activity;
ii. Engaging in any type of business practice; or
iii. Engaging in any activity in connection with the
purchase or sale of any security or commodity or in connection
with any violation of Federal, state or other securities laws or
commodities laws;
(d) any order, judgment or decree, not subsequently reversed,
suspended or vacated, of any Federal, state or local authority barring,
suspending or otherwise limiting for more than 60 days the right of Natural
Golf or any such person to engage in any activity described in the
preceding sub-paragraph, or to be associated with persons engaged in any
such activity;
(e) a finding by a court of competent jurisdiction in a civil action
or by the Securities and Exchange Commission (the "Commission") to have
violated any securities law, regulation or decree and the judgment in such
civil action or finding by the Commission has not been subsequently
reversed, suspended or vacated; or
(f) a finding by a court of competent jurisdiction in a civil action
or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding has not
been subsequently reversed, suspended or vacated. All items described in
clauses (a) through (f) above are collectively referred to herein as "Bad
Events."
2.22. BENEFIT PLANS. Natural Golf does not have any pension plan, profit
sharing or similar employee benefit plan.
2.23. CONSENTS AND APPROVALS. Except for the consent and approval of the
shareholders of Natural Golf and the filing of the Articles of Merger, no
consents or approvals of, or filings or registrations with, any third party or
6
any public body or authority are necessary in connection with (i) the execution
and delivery by Natural Golf of this Agreement and (ii) the consummation by
Natural Golf of the Merger and of all other transactions contemplated hereby.
2.24. FINDER'S FEES. Natural Golf knows of no person who rendered any
service in connection with the introduction of the Parties to any of the other
Parties, for a "finder's fee" or similar type of fee in connection with the
Merger and the other transactions contemplated hereby, except for Xxxxxxx
Investments, LLC which will receive up to 200,000 shares of Wentworth Common
Stock as a fee in connection with the Merger.
2.25. EMPLOYEE MATTERS. No employees of Natural Golf are on strike or to
the best of Natural Golf's knowledge threatening any strike or work stoppage.
Natural Golf does not have any obligations under any collective bargaining or
labor union agreements, nor is Natural Golf involved in any material controversy
with any of its employees or any organization representing any of its employees.
Natural Golf believes its relationships with its employees are good.
2.26. DISCLOSURE. None of the information supplied or to be supplied by or
about Natural Golf herein or for inclusion or incorporation by reference in any
information to be supplied to holders of Wentworth Common Stock concerning the
Merger contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
2.27. ACTIONS PRIOR TO CLOSING. From the date hereof through the Closing,
Natural Golf shall not, other than in the ordinary course of business,
consistent with past practice, without due consent of Wentworth:
(a) sell, lease, assign, transfer or otherwise dispose of any material
assets, including cash;
(b) agree to assume or assume, guarantee, endorse or otherwise in any way
be or become responsible or liable for, directly or indirectly, any
material contingent obligation;
(c) make any material capital expenditure;
(d) participate or engage in any discussions or negotiations with any
person regarding, or enter into any transaction concerning, a merger,
stock exchange or consolidation, other than with Wentworth and Natural
Golf Acquisition Corp..
(e) declare or pay any dividends or make any other distribution (whether in
cash or property) on any of its Shares or purchase, redeem, retire or
otherwise acquire for value any Shares or warrants or options, whether
now or hereafter outstanding;
(f) make or suffer to exist any advances or loans to, or investments in any
person, firm, corporation or other business entity not a party to this
Agreement;
(g) make any amendment to its Articles of Incorporation, as amended;
7
(h) enter into any new material agreement or be or become liable under any
new material agreement for the lease, hire or use of any real or
personal property;
(i) create, incur, assume or suffer to exist, any mortgage, pledge, lien,
charge, security interest or encumbrance of any kind upon any of its
property, assets, income or profits, whether now owned or hereafter
acquired; or
(j) enter into any commitment with respect to any of the foregoing.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING NATURAL GOLF ACQUISITION
CORP.. Wentworth and Natural Golf Acquisition Corp. each jointly and severally
represents, warrants and covenants as follows with respect to Natural Golf
Acquisition Corp.:
3.1. ORGANIZATION; CAPITALIZATION. Natural Golf Acquisition Corp. is, and
on the Effective Date will be, a duly organized and validly existing corporation
in good standing under the laws of the State of Delaware, authorized to issue
only the Natural Golf Acquisition Corp. Shares. On the Effective Date, there
will be issued and outstanding all of the Natural Golf Acquisition Corp. Shares,
which shall be fully paid and nonassessable and all of which shall be owned
solely by Wentworth. There are no, and on the Effective Date there will be no,
issued or outstanding options or warrants to purchase Natural Golf Acquisition
Corp. Shares or any issued or outstanding securities of any nature convertible
into Natural Golf Acquisition Corp. Shares, or any agreements or understandings
to issue any Natural Golf Acquisition Corp. Shares, options or warrants.
3.2. AUTHORITY. Natural Golf Acquisition Corp. has, and on the Effective
Date will have, full power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. This Agreement and the
transactions contemplated hereby have been duly approved by the Board of
Directors of Natural Golf Acquisition Corp. and, prior to the Closing, will have
been approved by Wentworth, the sole shareholder of Natural Golf Acquisition
Corp..
3.3. NO BUSINESS ACTIVITY. Natural Golf Acquisition Corp. has been
organized solely for the purpose of consummating the Merger and, since its
inception, has had no business activity of any nature other than those related
to its organization or as contemplated by this Agreement.
3.4. ISSUANCE OF SECURITIES. Since its inception, Natural Golf Acquisition
Corp. has not issued or committed itself to issue, and to the Effective Date
will not issue or commit to issue, any Natural Golf Acquisition Corp. Shares or
any options, rights, warrants, or other securities convertible into Natural Golf
Acquisition Corp. Shares, except for the issuance of the Natural Golf
Acquisition Corp. Shares to Wentworth.
3.5. CONSENTS AND APPROVALS. Except for the consent and approval of the
Board of Directors and shareholder of Natural Golf Acquisition Corp., and the
filing of the Certificate of Merger, no consents or approvals of, or filings or
registrations with, any third party or any public body or authority are
necessary in connection with (i) the execution and delivery by Natural Golf
Acquisition Corp. of this Agreement and (ii) the consummation by Natural Golf
Acquisition Corp. of the Merger and the other transactions contemplated hereby.
8
3.6. NO CONFLICTS. The execution and delivery by Natural Golf Acquisition
Corp. of this Agreement, the consummation and performance of the transactions
herein contemplated, and compliance with the terms of this Agreement by Natural
Golf Acquisition Corp. will not conflict with, result in a breach of or
constitute or give rise to a default under any indenture, mortgage, deed of
trust or other agreement, instrument or contract to which Natural Golf
Acquisition Corp. is now a party or by which it or any of its assets or
properties are bound or its Certificate of Incorporation or the bylaws of
Natural Golf Acquisition Corp., or any law, order, rule or regulation, writ,
injunction, judgment or decree of any government, governmental instrumentality
or court, domestic or foreign, having jurisdiction over Natural Golf Acquisition
Corp. or any of its businesses or properties.
3.7. SUBSIDIARIES. Natural Golf Acquisition Corp. has, and on the Effective
Date will have, no subsidiaries.
3.8. FINANCIAL CONDITION. Except for (i) the incurring of expenses of its
organization, (ii) the issuance of the Natural Golf Acquisition Corp. Shares to
Wentworth, (iii) the incurring of expenses relating to this Agreement and the
consummation of the transactions contemplated by this Agreement, and (iv) the
consummation of the Merger, Natural Golf Acquisition Corp. has had, and on the
Effective Date will have had, no business and no financial or other transactions
of any nature whatsoever
3.9. LIABILITIES. Natural Golf Acquisition Corp. has, and on the Effective
Date will have, no liabilities (including, but not limited to, tax liabilities)
nor are there, or on the Effective Date will there be, any claims against
Natural Golf Acquisition Corp. (whether such liabilities or claims are
contingent or absolute, direct or indirect, and matured or unmatured) except for
liabilities for its organization expenses or expenses incurred in connection
with the Merger and the consummation of the transactions contemplated by this
Agreement.
3.10. ASSETS. Natural Golf Acquisition Corp. has, and on the Effective Date
will have no fixtures, furniture, equipment, inventory, accounts receivable or
other assets.
3.11. CONTRACTS. Natural Golf Acquisition Corp. has, and on the Effective
Date will have, no contracts or commitments to which it is, or on the Effective
Date will be, a party, except for this Agreement and other documents and
instruments contemplated hereby in connection with the Merger.
3.12. LEGAL PROCEEDINGS. There are, and on the Effective Date there will
be, no legal, administrative, arbitral or other proceedings, claims, actions or
governmental investigations of any nature against Natural Golf Acquisition
Corp., or challenging the validity or propriety of the transactions contemplated
by this Agreement and, to Natural Golf Acquisition Corp.'s best knowledge, there
is no reasonable basis for any other proceeding, claim, action or governmental
investigation against Natural Golf Acquisition Corp.. Natural Golf Acquisition
Corp. is not a party to any order, judgment or decree which will, or might
reasonably be expected to, materially adversely affect the business, operations,
properties, assets or financial condition of Natural Golf Acquisition Corp..
9
3.13. EMPLOYEE MATTERS; RELATED PARTY TRANSACTIONS. Since the inception of
Natural Golf Acquisition Corp. there have been, and to the Effective Date there
will be (i) no salaried or otherwise compensated employees and no bonuses paid
to any officer or director of Natural Golf Acquisition Corp.; (ii) no loans made
to or any transactions with any officer or director of Natural Golf Acquisition
Corp.; (iii) no dividends or other distributions declared or paid by Natural
Golf Acquisition Corp.; and (iv) no purchase by Natural Golf Acquisition Corp.
of any Natural Golf Acquisition Corp. Shares.
3.14. INTELLECTUAL PROPERTY. Natural Golf Acquisition Corp. has no patents,
patent applications, trademarks, trademark registrations, tradenames,
copyrights, copyright registrations or applications therefor.
3.15. COMPLIANCE WITH LAWS. Since its inception, Natural Golf Acquisition
Corp. has, and on the Effective Date will have, in all material respects
conducted its affairs in compliance with all applicable laws, rules and
regulations.
3.16. OFFICER AND DIRECTOR INFORMATION. During the past five year period,
no officer or director of Natural Golf Acquisition Corp. has been the subject of
any Bad Event.
3.17. BENEFIT PLANS. Natural Golf Acquisition Corp. has no pension plan,
profit sharing or similar employee benefit plan.
3.18. FINDER'S FEES. Natural Golf Acquisition Corp. knows of no person who
rendered any service in connection with the introduction of the Parties to any
of the other Parties, for a "finder's fee" or similar type of fee in connection
with the Merger and the other transactions contemplated hereby, except for
Xxxxxxx Investments, LLC which will receive 200,000 shares of Wentworth Common
Stock as a fee in connection with the Merger.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF WENTWORTH. Wentworth represents,
warrants and covenants as follows, except to the extent set forth in the
Schedule of Exceptions in SCHEDULE B that is annexed hereto and made part hereof
("Wentworth Schedule of Exceptions"):
4.1. ORGANIZATION; CAPITALIZATION. Wentworth is a duly organized and
validly existing corporation in good standing under the laws of the State of
Delaware, authorized to issue an aggregate of 40,000,000 shares of Wentworth
Common Stock and 10,000,000 shares of Wentworth Preferred Stock. On the
Effective Date, there will be issued and outstanding no more than 200,000 shares
of Wentworth Common Stock, all of which such issued and outstanding shares will
be validly issued, fully paid and nonassessable. On the Effective Date, there
will be issued and outstanding no shares of Wentworth Preferred Stock. Except as
contemplated by this Agreement, on the Effective Date there will be no issued or
outstanding securities and no issued or outstanding options, warrants or other
rights, or commitments or agreements of any kind, contingent or otherwise, to
purchase or otherwise acquire Wentworth Shares or any issued or outstanding
securities of any nature convertible into Wentworth Shares other than the
200,000 shares of Wentworth Common Stock which are currently outstanding. There
is no proxy or any other agreement, arrangement or understanding of any kind
authorized, effective or outstanding, which restricts, limits or otherwise
affects the right to vote any Wentworth Shares.
10
4.2. BINDING AGREEMENT. This Agreement and the transactions contemplated
hereby have been duly approved by the Board of Directors of Wentworth. Except as
set forth in this Agreement, this Agreement has been duly executed and delivered
by Wentworth and constitutes the legal, valid and binding obligation of
Wentworth enforceable against it in accordance with the terms hereof, except as
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
laws of general application relating to or affecting the enforcement of rights
hereunder or general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.3. RECENT BUSINESS OPERATIONS. The business of Wentworth and the
Wentworth Subsidiaries (as hereinafter defined), since their respective
incorporation, primarily has been limited to the search for an acquisition or
merger partner and certain transactions described in its filings with the
Commission (the "SEC Filings"), and except for transactions described in the SEC
Filings, Wentworth and the Wentworth Subsidiaries have not engaged in any other
business since their respective incorporations.
4.4. FOREIGN QUALIFICATIONS. Wentworth is, and on the Effective Date will
be, duly authorized, qualified and licensed under any and all applicable laws,
regulations, ordinances or orders of public authorities to carry on its business
in the places and in the manner as presently conducted. The business of
Wentworth does not require it to be registered as an investment company or
investment advisor, as such terms are defined under the Investment Company Act
of 1940 and the Investment Advisors Act of 1940.
4.5. SUBSIDIARIES. Wentworth has, and on the Effective Date will have, no
subsidiaries, except for Natural Golf ACQUISITION CORP. (the "Wentworth
Subsidiaries").
4.6. FINANCIAL STATEMENTS. The financial statements of Wentworth,
consisting of its Balance Sheet, Statements of Operations, Statements of
Stockholders' Equity and Statement of Cash Flows, all as at or for periods
ending December 31, 2002, and all together with accompanying notes, if any, are
complete and correct in all material respects, present fairly the financial
position of Wentworth, the results of operations and changes in financial
position for the periods covered thereby, and were prepared in accordance with
generally accepted accounting principles consistently applied, and have been
adjusted for all normal and recurring accruals. All the financial statements
referenced herein regarding Wentworth are collectively referred to as the
"Wentworth Financial Statements", all of which have been delivered to Natural
Golf and are true, correct and complete in all material respects.
4.7. NO ADVERSE CHANGES. There has not been, and on the Effective Date
there will not have been, any material change in the financial condition of
Wentworth and the Wentworth Subsidiaries from that set forth in the Wentworth
Financial Statements except for (i) transactions in the ordinary course of
business, (ii) transactions relating to this Agreement and (iii) the incurring
of expenses and liabilities relating to this Agreement.
4.8. LIABILITIES. There are, and on the Effective Date will be, no
liabilities (including, but not limited to, tax liabilities) of or claims
against Wentworth or the Wentworth Subsidiaries (whether such liabilities or
claims are contingent or absolute, direct or indirect, accrued or unaccrued and
matured or unmatured) not appearing on the Wentworth Financial Statements,
11
except for (i) liabilities for expenses incurred relating to this Agreement and
the consummation of the transactions contemplated hereby and (ii) liabilities
and commitments incurred or made in the ordinary course of Wentworth's business
or taxes incurred on earnings since December 31, 2002.
4.9. TAX RETURNS. All Federal, state, county and local income, excise,
property or other tax returns required to be filed by Wentworth and the
Wentworth Subsidiaries have been timely filed and all required taxes, fees and
assessments have been paid or an adequate reserve therefore has been provided
for in the Wentworth Financial Statements.
4.10. ASSETS. Wentworth and the Wentworth Subsidiaries have, and on the
Effective Date will have, no fixtures, furniture, equipment, inventory, accounts
receivable or other assets.
4.11. MATERIAL CONTRACTS. Wentworth and the Wentworth Subsidiaries each
have, and on the Effective Date will have, no material contracts to which it is,
or on the Effective Date will be, a party, except as described in the Wentworth
Financial Statements.
4.12. NO CONFLICTS. The execution and delivery by Wentworth of this
Agreement, the consummation and performance of the transactions herein
contemplated and compliance with the terms of this Agreement by Wentworth will
not conflict with, result in a breach of or constitute a default under (i) any
indenture, mortgage, deed of trust or other agreement, instrument or contract to
which Wentworth or the Wentworth Subsidiaries is now a party or by which it or
any of its assets or properties is bound; (ii) the Certificate of Incorporation
or the bylaws of Wentworth and the Wentworth Subsidiaries, in each case as
amended; or (iii) any law, order, rule, regulation, writ, injunction, judgment
or decree of any government, governmental instrumentality or court, domestic or
foreign, having jurisdiction over Wentworth or the Wentworth Subsidiaries or any
of their respective business or properties.
4.13. LEGAL PROCEEDINGS. There are, and on the Effective Date there will
be, no legal, administrative, arbitral or other proceedings, claims, actions or
governmental investigations of any nature pending or to Wentworth's knowledge
threatened, against Wentworth or any of the Wentworth Subsidiaries, including,
but not limited to any shareholder claims or derivative actions, or challenging
the validity or propriety of the transactions contemplated by this Agreement,
and, to Wentworth's best knowledge, there is no reasonable basis for any
proceeding, claim, action or governmental investigation against Wentworth or any
of the Wentworth Subsidiaries. Wentworth and the Wentworth Subsidiaries are not
a party to any order, judgment or decree, which will, or might reasonably be
expected to, materially adversely affect the business, operations, properties,
assets or financial condition of Wentworth.
4.14. CERTAIN TRANSACTIONS. Other than as disclosed in the SEC Filings,
there have been, and through the Effective Date there will be (i) no salaried or
otherwise compensated employees and no bonuses paid to any officer or director
of Wentworth or the Wentworth Subsidiaries; (ii) no loans made to or
transactions with any officer or director of Wentworth or the Wentworth
Subsidiaries; (iii) no dividends or other distributions declared or paid by
Wentworth; and (iv) no purchase by Wentworth or any third party of any of the
Wentworth Shares.
12
4.15. ISSUANCES OF SECURITIES. Wentworth has not, except for the Issued
Wentworth Shares, issued or committed itself to issue, and through the Effective
Date will not issue or commit itself to issue, any Wentworth Shares or any
options, rights, warrants, or other securities convertible into Wentworth
Shares, except as contemplated by this Agreement.
4.16. INTELLECTUAL PROPERTY. Wentworth and the Wentworth Subsidiaries have
no patents, patent applications, trademarks, trademark registrations, trade
names, copyrights, copyright registrations or applications therefor. Wentworth
has no knowledge of any infringements by Wentworth or the Wentworth Subsidiaries
of any third party's intellectual property.
4.17. COMPLIANCE WITH LAWS. Wentworth and the Wentworth Subsidiaries have,
and on the Effective Date will have, in all material respects operated their
respective business and conducted their affairs in compliance with all
applicable laws, rules and regulations, except where the failure to so comply
did not have and would not be expected to have a material adverse effect on its
business or property. To the best of its knowledge, Wentworth and the Wentworth
Subsidiaries are not in violation of any Federal, state or local environmental
law or regulation.
4.18. RELATED PARTY TRANSACTIONS. On the Effective Date there will be no
loans, leases, commitments, arrangements or other contracts of any kind or
nature outstanding between (i) Wentworth or any of the Wentworth Subsidiaries or
(ii) any officer or director of Wentworth or the Wentworth Subsidiaries or any
person related to or affiliated with any officer or director of Wentworth or any
of the Wentworth Subsidiaries.
4.19. OFFICERS AND DIRECTORS. During the past five year period, no current
officer or director of Wentworth or the Wentworth Subsidiaries has been the
subject of any Bad Event.
4.20. EMPLOYEE BENEFIT PLANS. Wentworth and the Wentworth Subsidiaries have
no pension plan, profit sharing or similar employee benefit plan.
4.21. CONSENTS. Except for the consent and approval of the shareholders of
Wentworth and Natural Golf ACQUISITION CORP., the filing of the Certificate of
Merger, the effectiveness of a post-effective amendment to Wentworth's
registration statement on Form SB-2, registration number 333-60468, (the
"Registration Statement"), delivery of an amended prospectus to all Wentworth
shareholders and the reconfirmation by at least 80% of Wentworth's shareholders
who purchased Wentworth Common Stock pursuant to the Registration Statement of
their share purchases pursuant to Rule 419 promulgated under the Securities Act
of 1933, as amended ("Rule 419") and the filing of a current report on Form 8-K,
no consents or approvals of, or filings or registrations with, any third party
or any public body or authority are necessary in connection with (i) the
execution and delivery by Wentworth of this Agreement or (ii) the consummation
by Wentworth of the Merger and the other transactions contemplated hereby.
Wentworth has, and on the Effective Date will have, full power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby.
4.22. FINDER'S FEES. Wentworth knows of no person who rendered any service
in connection with the introduction of the Parties to any of the other Parties,
for a "finder's fee" or similar type of fee in connection with the Merger and
13
the other transactions contemplated hereby except for Xxxxxxx Investments, LLC
which will receive 200,000 shares of Wentworth Common Stock as a fee in
connection with the Merger.
4.23. EMPLOYEES. Wentworth and the Wentworth Subsidiaries have no
employees.
4.24. RULE 419. Wentworth's initial public offering of securities was
conducted in full compliance with all applicable securities laws and
regulations, including without limitation, all the requirements of Rule 419.
4.25. DISCLOSURE. None of the information supplied or to be supplied by or
about Wentworth or the Wentworth Subsidiaries to Natural Golf concerning the
Merger contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5. REPRESENTATIONS TO SURVIVE CLOSING. All of the representations, covenants and
warranties contained in this Agreement (including all statements contained in
any certificate or other instrument delivered by or on behalf of Wentworth,
Natural Golf Acquisition Corp. or Natural Golf pursuant hereto or in connection
with the transactions contemplated hereby) shall survive the Closing for a
period of one (1) year from the Effective Date.
6. SURVIVING CORPORATIONS. The surviving entity in the Merger shall be Natural
Golf. Natural Golf's name, identities, Articles of Incorporation, as amended,
Bylaws, existence, purposes, powers, objects, franchises, rights and immunities
shall be unaffected and unimpaired by the Merger, except as described in the
Certificate of Merger.
7. TREATMENT OF SECURITIES OF CONSTITUENT CORPORATIONS IN THE MERGER. The terms
and conditions of the Merger, the mode of carrying the same into effect, and the
manner and basis of converting the securities of Wentworth, Natural Golf and
Natural Golf Acquisition Corp. as follows:
7.1. TREATMENT OF SHARES. The outstanding Natural Golf shares of common
stock shall be converted by virtue of the Merger, and at the Effective Date,
into an aggregate of 7,718,748 shares of Wentworth Common Stock ("Natural Golf
Shares"), on the basis of 3.267 shares of Wentworth Common Stock for each Share
("Conversion Ratio"), without any action on the part of the holders thereof.
After the Effective Date, each holder of Shares prior to the Merger shall be
entitled, upon surrender, to receive from Wentworth a certificate representing
the number of shares of Wentworth Common Stock to which such holder shall be
entitled, which certificate shall contain any appropriate restrictive legend
concerning the resale of such Wentworth Common Stock. Until so surrendered, any
outstanding certificates or other documentation which, prior to the Effective
Date, represented Shares, shall be deemed for all corporate purposes to evidence
ownership of Wentworth Common Stock into which such Shares shall have been
converted. Upon such surrender, Shares so surrendered shall no longer be
outstanding and shall automatically be canceled and retired, and shall cease to
exist. Upon conversion, any fractional shares of Wentworth Common Stock
resulting from conversion shall be purchased by Wentworth for cash at a price of
the fair value of the fraction of a share on the Effective Date.
14
7.2. TREATMENT OF NATURAL GOLF WARRANTS. The existing warrants of Natural
Golf entitling their holders to purchase Shares shall be replaced at Closing by
warrants to purchase 1,695,260 shares of Wentworth Common Stock, on the same
basis of conversion as set forth in Section 7.1 above. The exercise price for
each Wentworth warrant shall be equal to the quotient determined by dividing the
exercise price per share under the Natural Golf warrant immediately prior to the
Effective Time by the Conversion Ratio, rounded up to the nearest whole cent.
7.3. TREATMENT OF NATURAL GOLF OPTIONS. The existing options to purchase
Shares shall be replaced at Closing by options to purchase 32,670 shares of
Wentworth Common Stock, on the same basis of conversion as set forth in Section
7.1 above. The exercise price for each Wentworth option shall be equal to the
quotient determined by dividing the exercise price per share under the Natural
Golf option immediately prior to the Effective Time by the Conversion Ratio,
rounded up to the nearest whole cent.
7.4. TREATMENT OF NATURAL GOLF CONVERTIBLE DEBENTURES AND NOTES. The
existing Natural Golf convertible debentures convertible into Shares shall be
convertible into 1,225,125 shares of Wentworth Common Stock, on the same basis
of conversion as set forth in Section 7.1 above. The conversion price under each
debenture shall be equal to the quotient determined by dividing the conversion
price per share under the Natural Golf debenture immediately prior to the
Effective Time by the Conversion Ratio, rounded up to the nearest whole cent.
The existing Natural Golf notes and accrued interest thereon that are payable in
Shares, at the election of Natural Golf, shall be payable in 2,261,934 shares of
Wentworth Common Stock, on the same basis of conversion as set forth in Section
7.1 above. The conversion price under the notes shall be equal to the quotient
determined by dividing the conversion price per share under the Natural Golf
notes immediately prior to the Effective Time by the Conversion Ratio, rounded
up to the nearest whole cent.
7.5. EXISTENCE OF NATURAL GOLF ACQUISITION CORP.. The separate existence
and corporate organization of Natural Golf ACQUISITION CORP., except insofar as
it may be continued by statute, shall cease on Effective Date and Natural Golf
shall become a wholly owned subsidiary of Wentworth.
8. RIGHTS AND LIABILITIES OF SURVIVING CORPORATION IN MERGER. On and after the
Effective Date, Natural Golf, as the surviving corporation of the Merger, shall
succeed to and possess, without further act or deed, all of the estate, rights,
privileges, powers and franchises, both public and private, and all of the
property, real, personal, and mixed, of Natural Golf Acquisition Corp.; all
debts due to Natural Golf Acquisition Corp. on whatever account shall be vested
in Natural Golf; all claims, demands, property, rights, privileges, powers,
franchises and every other interest of Natural Golf Acquisition Corp. shall be
as effectively the property of Natural Golf as they were of Natural Golf
Acquisition Corp.; the title to any real estate by deed or otherwise in Natural
Golf Acquisition Corp. shall not revert or be in any way impaired in a material
respect by reason of the Merger, but shall be vested in Natural Golf; all rights
of creditors and all liens upon any property of Natural Golf Acquisition Corp.
shall be preserved unimpaired, limited in lien to the property affected by such
lien at the Effective Date; and all debts, liabilities and duties of Natural
Golf Acquisition Corp. shall thenceforth attach to Natural Golf and may be
enforced against it to the same extent as if such debts, liabilities and duties
had been incurred or contracted by it.
9. FURTHER ASSURANCES OF TITLE. As and when requested by Natural Golf, or by any
of its successors or assigns, Natural Golf Acquisition Corp. shall execute and
deliver, or cause to be executed and delivered, all such deeds and instruments
and will take or cause to be taken all such further action as Natural Golf may
deem necessary or desirable in order to vest in and confirm to Natural Golf
title to and possession of the property acquired by Natural Golf by reason or as
a result of the Merger, and otherwise to carry out the intent and purposes
hereof, and the officers and directors of Natural Golf and Wentworth, as
applicable, are fully authorized in the name of Natural Golf or Wentworth or
otherwise to take any and all such action.
10. CONDITIONS OF OBLIGATIONS OF NATURAL GOLF ACQUISITION CORP. AND WENTWORTH.
The obligations of Natural Golf Acquisition Corp. and Wentworth to consummate
the Merger are subject to the following conditions prior to the Effective Date:
10.1. COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. Natural Golf shall be
in compliance with its representations, warranties and covenants contained
herein in all material respects, and Natural Golf Acquisition Corp. and
Wentworth each shall receive from Natural Golf certificates to such effect from
the President of Natural Golf as of the Effective Date.
10.2. LOSSES. Natural Golf shall not have suffered a loss on account of
fire, flood, accident or other calamity of such a character as to interfere
materially with the continuous operation of its business or materially affect
adversely its condition, financial or otherwise, regardless of whether or not
such loss shall have been insured.
10.3. NO MATERIAL TRANSACTIONS. No material transaction shall have been
entered into by Natural Golf other than transactions in the ordinary course of
business between November 30, 2002 and the Effective Date, other than as
referred to in this Agreement or in the schedules annexed hereto, except with
the prior written consent of Wentworth.
10.4. NO MATERIAL ADVERSE CHANGE; DUE DILIGENCE. Except as disclosed in
this Agreement or in the schedules annexed hereto, no material adverse change in
the aggregate shall have occurred in the financial condition, business,
properties, assets, liabilities, results of operations or prospects of Natural
Golf since November 30, 2002. Additionally, Wentworth shall be satisfied in all
material respects with the results of its due diligence investigation of Natural
Golf.
10.5. DISPOSITION OF ASSETS. None of the properties or assets of Natural
Golf shall have been sold or otherwise disposed of other than in the ordinary
course of business in accordance with past practice during such period, except
with the prior written consent of Wentworth.
10.6. CONDITIONS. Natural Golf shall have performed and complied with the
provisions and conditions of this Agreement on its part to be performed and
complied with.
10.7. FILINGS AND APPROVALS. All applicable filings and regulatory
approvals required to be made or obtained by Natural Golf have been made or
obtained.
10.8. DIRECTOR AND SHAREHOLDER APPROVALS. This Agreement and the
transactions contemplated hereby shall have been approved by appropriate action
of the directors and shareholders, as required, of Natural Golf and resolutions
to that effect in form and substance reasonably satisfactory to Wentworth and
its counsel, shall have been delivered to Wentworth.
15
10.9. COMPLIANCE WITH SECURITIES LAWS. There shall have been full
compliance with the applicable securities or "blue sky" laws and regulations of
any state or other governmental body having jurisdiction over the Merger.
10.10. INVESTMENT REPRESENTATION. Natural Golf shall have obtained an
instrument from the shareholders of Natural Golf, that includes a representation
that the shares of Wentworth Common Stock being acquired as a result of the
transactions contemplated by this Agreement are being acquired for investment
purposes only and not with a view to, or sale in connection with, any
distribution within the meaning of the Securities Act of 1933, as amended.
10.11. DISSENTERS. The holders of more than 5% of the Natural Golf Shares
dissent pursuant to Section 5/11.65 of the Illinois Business Corporation Act.
10.12. CLOSING. The Closing shall have occurred by June 30, 2003.
Compliance with the provisions of this Section 10 shall be evidenced by
the certificate of the President and Secretary of Natural Golf.
11. CONDITIONS OF OBLIGATIONS OF NATURAL GOLF. The obligations of Natural Golf
to consummate the Merger are subject to the following conditions prior to the
Effective Date:
11.1. COMPLIANCE WITH REPRESENTATIONS AND WARRANTIES. Natural Golf
Acquisition Corp. and Wentworth shall be in compliance with their respective
representations, warranties and covenants contained herein, and Natural Golf
shall have received from each of Natural Golf Acquisition Corp. and Wentworth a
certificate to such effect from their respective Presidents as of the Effective
Date.
11.2. LOSSES. Natural Golf Acquisition Corp. and Wentworth shall not have
suffered any loss on account of fire, flood, accident or other calamity of such
a character as to interfere materially with the continuous operation of their
respective businesses or materially adversely affect their respective condition,
financial or otherwise, regardless of whether or not such loss shall have been
insured.
11.3. NO MATERIAL TRANSACTIONS. No material transactions shall have been
entered into by Natural Golf Acquisition Corp. or Wentworth, other than
transactions in the ordinary course of business, since December 31, 2002, other
than as referred to in this Agreement or in connection herewith, except with the
prior written consent of Natural Golf.
16
11.4. NO MATERIAL ADVERSE CHANGE; DUE DILIGENCE. No material adverse change
shall have occurred in the financial condition, business, properties, assets,
liabilities, results of operations or prospects of Natural Golf Acquisition
Corp. or Wentworth since December 31, 2002, other than as referred to in this
Agreement. Additionally, Natural Golf shall be satisfied in all material
respects with the results of its due diligence investigation of Wentworth and
Natural Golf Acquisition Corp..
11.5. DISPOSAL OF ASSETS. None of the properties or assets of Natural Golf
Acquisition Corp. or Wentworth shall have been sold or otherwise disposed of,
other than in the ordinary course of business since December 31, 2002, except
with the written consent of Natural Golf.
11.6. COMPLIANCE WITH CONDITIONS. Natural Golf Acquisition Corp. and
Wentworth shall each have performed and complied with the provisions and
conditions of this Agreement on its part to be performed and complied with.
11.7. FILINGS AND APPROVALS. All applicable filings required to be made and
regulatory approvals, as well as any other third party approvals, obtained by
Wentworth have been made or obtained. In particular, but not by way of
limitation, Wentworth shall have caused to become effective the Registration
Statement pursuant to Rule 419, offering each shareholder of Wentworth who
purchased Wentworth Common Stock pursuant to such Registration Statement an
opportunity to reconfirm their share purchases, and not more than 20% of such
shareholders shall have not reconfirmed by the end of the time period required
by Rule 419.
11.8. BOARD RESIGNATIONS. Wentworth shall have held a meeting of its Board
of Directors at which meeting all of its directors except one (to be chosen by
Wentworth) shall have resigned seriatim and the persons designated by Natural
Golf shall have been elected as directors of Wentworth, all subject to the
consummation of the Merger.
11.9. ADDITIONAL INVESTMENT. On or before May 1, 2003, Xxxxxxx Reverse
Merger Fund, LLC, shall have contributed at least $570,000 of additional capital
to Natural Golf in the form of a debenture containing terms to be agreed to by
Natural Golf and Xxxxxxx Reverse Merger Fund, LLC.
11.10. DISSENTERS. The holders of more than 5% of the Natural Golf Shares
dissent pursuant to Section 5/11.65 of the Illinois Business Corporation Act.
11.11. CLOSING. The Closing shall have occurred by June 30, 2003.
Compliance with the provisions of this Section 11 shall be evidenced by the
certificates of the respective Presidents and Secretaries of each of Natural
Golf Acquisition Corp. and Wentworth to be delivered at Closing.
12. Post Closing Covenants
12.1. AMENDMENT OF WENTWORTH CERTIFICATE OF INCORPORATION. Promptly
following the Closing, Wentworth shall call a special meeting of the
shareholders of Wentworth (the "Special Meeting") to be held as soon as
practicable after the Closing, for the purpose of amending Wentworth's
Certificate of Incorporation to change its corporate name to Natural Golf
Corporation and such other matters as Wentworth shall deem appropriate.
13. Covenants of Principal Shareholders of Wentworth.
13.1. AMENDMENT OF WENTWORTH CERTIFICATE OF INCORPORATION. Xxxxx X. Xxxxxxx
("Xxxxxxx") and Xxxxxxx X. Xxxxxx ("Xxxxxx") each agrees that he will vote all
shares of Wentworth capital stock beneficially owned or controlled by him in
favor of the amendment of Wentworth's Certificate of Incorporation to change its
17
corporate name to Natural Golf Corporation.
14. ABANDONMENT. This Agreement and the Merger may be abandoned (a) by any of
the Parties, acting by its respective Board of Directors, as applicable, at any
time prior to its adoption by the shareholders of any of such Party, as provided
by law, (b) by any of the Companies, acting by its Board of Directors, as
applicable, by written notice to the other parties hereto, at any time in the
event of the failure of any condition in favor of such Party as to which the
consummation of the Merger is subject, or (c) by the consent of all the Parties,
acting each by their respective Board of Directors, as applicable, at any time
prior to the Effective Date. In the event of abandonment of this Agreement, the
same shall become wholly void and of no effect, and there shall be no further
liability or obligation hereunder on the part of any of the Parties, their
respective Boards of Directors or any other Party to this Agreement.
15. CLOSING OR TERMINATION. In the event the Closing of this Agreement shall not
take place due to failure of any condition of Closing required herein, or in the
event that the closing shall not take place on or before June 30, 2003 for any
reason, then any Party shall have the right to terminate this Agreement, in
which event no Party shall have any further right or obligation as against any
other. If Natural Golf shall fail to close for any reason other than failure of
any condition of Closing required herein to be performed on the part of
Wentworth or Natural Golf Acquisition Corp., Natural Golf shall pay to Wentworth
a break-up fee of $25,000 in cash. If Wentworth or Natural Golf Acquisition
Corp. shall fail to close for any reason other than failure of any condition of
Closing required herein to be performed on the part of Natural Golf, Wentworth
shall pay to Natural Golf a break-up fee of $25,000 in cash.
16. DELIVERY OF CORPORATE PROCEEDINGS OF WENTWORTH AND NATURAL GOLF ACQUISITION
CORP.. At the Closing, Wentworth and Natural Golf Acquisition Corp. shall
deliver to counsel for Natural Golf the originals of all of the corporate
proceedings of Wentworth and Natural Golf Acquisition Corp., duly certified by
their respective Secretaries, relating to this Agreement.
17. DELIVERY OF CORPORATE PROCEEDINGS OF NATURAL GOLF. At the Closing, Natural
Golf shall deliver to counsel for Wentworth and Natural Golf Acquisition Corp.
the originals of all of the corporate proceedings of Natural Golf, duly
certified by its Secretary, relating to this Agreement.
18. LIMITATION OF LIABILITY. The representations and warranties made by any
Party to this Agreement are intended to be relied upon only by the other Parties
to this Agreement and by no other person. Nothing contained in this Agreement
shall be deemed to confer upon any person not a Party to this Agreement any
third party beneficiary rights or any other rights of any nature whatsoever.
19. FURTHER INSTRUMENTS AND ACTIONS. Each Party prior to or following the
Closing shall deliver such further instruments and take such further action as
may be reasonably requested by any other Party in order to carry out the intent
and purposes of this Agreement.
20. GOVERNING LAW. This Agreement is being delivered and is intended to be
performed in the State of Delaware, and shall be construed and enforced in
accordance with the laws of such state, without regard to conflicts of laws
thereof.
18
21. NOTICES. All notices or other communications to be sent by any Party to this
Agreement to any other Party to this Agreement shall be sent by certified mail,
personal delivery or nationwide overnight courier to the addresses hereinbefore
designated, or such other addresses as may hereafter be designated in writing by
a Party to the other Parties. Notice shall be deemed given and received on the
date of actual delivery to the address specified thereon.
22. BINDING AGREEMENT. This Agreement represents the entire agreement among the
Parties hereto with respect to the matters described herein and is binding upon
and shall inure to the benefit of the Parties hereto and their legal
representatives, successors and permitted assigns. This Agreement may not be
assigned and, except as stated herein, may not be altered or amended except in
writing executed by the Party to be charged.
23. COUNTERPARTS. This Agreement may be executed in counterparts, all of which,
when taken together, shall constitute the entire Agreement.
24. SEVERABILITY. The provisions of this Agreement shall be severable, so that
the unenforceability, validity or legality of any one provision shall not affect
the enforceability, validity or legality of the remaining provisions hereof.
25. JOINT DRAFTING. This Agreement shall be deemed to have been drafted jointly
by the Parties hereto, and no inference or interpretation against any Party
shall be made solely by virtue of such Party allegedly having been the
draftsperson of this Agreement.
26. RELIANCE ON CERTIFICATES. In rendering any opinion referred to herein,
counsel for the Parties hereto may rely, as to any factual matters involved in
their respective opinions, on certificates of public officials and of corporate
and company officers, and on such other evidence as such counsel may reasonably
deem appropriate and, as to the matters governed by the laws of jurisdictions
other than the United States or the States of Delaware and Illinois, an opinion
of local counsel in such other jurisdiction(s), which counsel shall be
satisfactory to the other Parties in the exercise of their reasonable
discretion.
27. PUBLIC ANNOUNCEMENTS. All parties hereto agree that any public announcement,
press release or other public disclosure of the signing of this Agreement shall
be made jointly and only after all Parties hereto have reviewed and approved the
language and timing of such disclosure, except as such disclosure may be
required pursuant to any legal obligation or order of any court having proper
jurisdiction over any of the Parties hereto.
28. CONSENT. Whenever consent is required to be given by any of the Parties to
any of the other Parties hereunder in connection with any matter contemplated
hereby, such consent shall not be unreasonably withheld, delayed or conditioned.
19
IN WITNESS WHEREOF, the Parties hereto have made and executed this
Agreement as of the day and year first above written.
WENTWORTH II, INC.,
a Delaware corporation
By: /S/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx, President
NATURAL GOLF ACQUISITION CORP..,
a Delaware corporation
By: /S/ Xxxxx X. Xxxxxxx
--------------------------------------
Xxxxx X. Xxxxxxx, President
NATURAL GOLF CORPORATION,
an Illinois corporation
By: /S/ Xxxxxx X. Xxxxx
--------------------------------------
Xxxxxx X. Xxxxx, President
As to the provisions of Section 13
of the Agreement and Plan of
Reorganization:
/S/ Xxxxx X. Xxxxxxx
------------------------
XXXXX X. XXXXXXX
/S/ Xxxxxxx X. Xxxxxx
------------------------
XXXXXXX X. XXXXXX
20
Schedule A Natural Golf Schedule of Exceptions
Schedule B Wentworth Schedule of Exceptions
Exhibit A Certificate of Merger
Exhibit B Articles of Merger
21
SCHEDULE A
NATURAL GOLF SCHEDULE OF EXCEPTIONS
2.1 Outstanding rights, options or warrants to purchase any equity interest
in Natural Golf:
Warrants to purchase 375,000 shares of common stock at $4.00 per share expiring
12/31/07 issued to 10% secured convertible debenture holders. The 375,000 shares
include 142,500 shares that may be issued upon exercise of the warrants that
will be issued as a part of the $570,000 of unsold units that Natural Golf plans
to sell pursuant to the private placement offering described in Section 2.9 of
this Schedule A and such 142,500 shares are included in the definition of Shares
for purposes of this Merger Agreement.
Warrants to purchase 3,125 shares of common stock at $0.01 per share expiring
8/30/04 issued to Xxxxx Xxxx under sponsorship agreement. Agreement to issue
additional warrants to purchase 3,125 shares to Xxxxx Xxxx for contract year
ending 3/31/03 under certain conditions (these warrants are not considered
issued and outstanding for purposes of this Agreement and Plan of Merger).
Warrants to purchase 80,733 shares of common stock at $0.01 per share expiring
November 19, 2007 issued to Xxxxxxxx Xxxxx in connection with employment
termination.
Agreement to issue warrants to purchase 175,000 shares of common stock at $4.00
per share to various note holders upon consummation of certain financing events
(these warrants are not considered issued and outstanding for purposes of this
Merger Agreement).
250,000 shares of common stock reserved for issuance under the 2002 stock option
plan. No options have been issued under the 2002 stock option plan. 362 shares
of common stock to be issued in payment of interest under a certain note issued
to Xxxxxxx Xxxxx at $10.00 per share.
691,996 shares of common stock that may be issued in payment of principal and
interest under certain notes at maturity if Natural Golf elects to pay such
notes in stock at $1.00 to $4.00 per share.
375,000 shares of common stock that may be issued in payment of principal under
the 10% secured convertible debentures at maturity if the holders elect to
convert such debentures into common stock at $4.00 per share. The 375,000 shares
include 142,500 shares that may be issued upon conversion of the debentures
included in the $570,000 of unsold units that Natural Golf plans to sell
pursuant to the private placement offering described in Section 2.9 of this
Schedule A and such 142,500 shares are included in the definition of Shares for
purposes of this Merger Agreement.
On September 6, 2002, Xxxxx Xxxxxxx entered into a consulting agreement with
Natural Golf to act as an advisor for Natural Golf's products. Natural Golf has
granted (but not issued) 10,000 shares of common stock to Xxxxx Xxxxxxx. Natural
Golf also granted Xxxxx Xxxxxxx the option to purchase 10,000 shares of common
stock at $10 per share.
Natural Golf has reached verbal agreements with Xxxx Xxxxx, Xxx Xxxxxxxxx, Xxx
Xxxxxxxx and Xxxxx Xxxxxxxx (Infomercial Talent) for their participation in the
Natural Golf Infomercial. Natural Golf will reserve (but not issue) up to 40,000
shares of common stock to the Infomercial Talent or Natural Golf may pay the
Infomercial Talent $90,000 for their appearance in the infomercial. Natural Golf
will also reserve 100,000 shares of common stock under options to be granted to
the Infomercial Talent at an exercise price of $10 per share.
2.7 Financial Statements
To the extent Natural Golf has delivered monthly or quarterly unaudited
financial statements, such financial statements have been prepared, in all
material respects, with generally accepted accounting principles and have been,
in all material respects, adjusted for normal and recurring accruals.
2.8 Material Adverse Changes Since Financial Statements:
Natural Golf's lender has verbally agreed to renew Natural Golf's $400,000 note
that matured 12/30/02. This bank note is secured by the personal guaranty of
Xxxxxx Xxxxxxxxxx. Natural Golf does not know the specific terms and conditions
of any renewal note or whether the note will actually be extended and renewed,
or extended and renewed on terms acceptable to Natural Golf.
Natural Golf has continued to incur significant net losses and negative cash
flow from operations since November 30, 2002.
See other sections of this Schedule A, as appropriate.
2.9 Transactions not in Ordinary Course:
Subsequent to November 30, 2002, Natural Golf began selling 30 units (the Units)
in a private placement offering (PPO) at $50,000 per unit. Each Unit is
comprised of one 10% convertible debenture for $50,000 and five year warrants to
purchase 12,500 shares of common stock at $4.00 per share of Natural Golf. The
Units are being offered on a best efforts basis by Xxxxxxx Investments, LLC
(placement agent) who will receive a 10% commission on Units placed by the
placement agent and a 7% commission on all sales referred to the placement agent
by Natural Golf or any of its golf lesson instructors. Natural Golf will pay its
instructors a 3% finder's fee on referrals to the placement agent. In addition,
the placement agent will receive warrants to purchase shares of Natural Golf's
common stock at an exercise price of $4.00 per share, expiring 5 years from the
date of grant. The number of placement agent warrants to be issued will equal
10% of the total shares of common stock that could be converted or exercised
from the sale of debentures and warrants in this PPO. On January 3, 2003, note
holders converted $905,000 in notes into Units of the PPO pursuant to
2
subscription agreements. On February 10, 2003, an investor purchased 1/2 Unit
for $25,000 pursuant to a subscription agreement. Xxxxxxx Reverse Merger Fund,
LLC, plans to purchase the remaining Units under the PPO in the principal amount
of $570,000. Based upon the completion of the $570,000 purchase by Xxxxxxx
Reverse Merger Fund, LLC, the placement agent will receive 60,250 warrants to
purchase Natural Golf shares at $4.00 per share. These placement agent warrants
are included in the definition of Shares under this Merger Agreement.
If Natural Golf completes a reverse merger transaction other than as
contemplated by this Agreement, Natural Golf has agreed to pay the placement
agent a fee equal to 3% of the value of such other reverse merger occurring
within 6 months of the termination of placement agent's agreement with Natural
Golf.
On February 7, 2003, Natural Golf issued 72,500 shares of common stock to
certain purchasers of common stock during 2002 to adjust their respective
purchase prices to $4.00 per share. These share issuances are reflected in the
November 30, 2002 financial statements.
On February 11, 2003, Natural Golf issued 71,780 and 69,787 shares of common
stock to Xxxxxx Xxxxx and Xxxxxx Xxxxxxxxxx, respectively, at $4.00 per share
for payment of certain unpaid bonuses and compensation, loans, and unreimbursed
business expenses. On February 11, 2003, Natural Golf issued 96,304 shares of
common stock to certain note holders in payment of principal and interest
totaling $770,432. An additional 96,304 shares are to be issued to complete
payment of these notes based on a share price of $4.00 per share (see Section
2.1, above). These share issuances are reflected in the November 30, 2002
financial statements.
Since November 30, 2002, Natural Golf has issued 499 shares of common stock to
pay accrued interest under certain notes.
Natural Golf entered into an Employment Separation and Release Agreement with
Xxxxxxxx Xxxxx dated 12/16/02. The agreement provided for, among other things, a
warrant to purchase 80,733 shares of common stock at $0.01 per share for unpaid
compensation, a note for $93,706 payable 7/1/03 for unreimbursed expenses and
secured by a lien on Natural Golf's assets, and registration rights on his
shares and the shares underlying the warrants.
Natural Golf's lender has verbally agreed to renew Natural Golf's $400,000 note
that matured 12/30/02. This bank note is secured by the personal guaranty of
Xxxxxx Xxxxxxxxxx. No formal note or agreement has been received from Xxxxxx
Bank and, accordingly, Natural Golf does not know the specific terms and
conditions of any renewal note or whether the note will actually be extended and
renewed, or extended and renewed on terms acceptable to Natural Golf.
In connection with the extension of the maturity of several notes with an
aggregate principal amount of $700,00 issued to various investors, Natural Golf
agreed to issue warrants to purchase 175,000 shares of common stock at $4.00 per
share upon consummation of certain financing events (these warrants are not
considered issued and outstanding for purposes of this Merger Agreement). In
addition, if the holders of these notes elect payment in cash and Natural Golf
subsequently elects to pay such notes in stock, the price per share for payment
was reduced from $4.00 per share to $2.00 per share. These notes mature July 1,
2003; however, in the event Natural Golf receives equity or debt financing of at
least $5 million, payment is accelerated.
3
2.10 Liabilities or Claims Since Financial Statements:
Natural Golf provides a 30-day money back guarantee on its products and a
limited 2-year warranty on its golf clubs.
During the last calendar quarter of 2002, Natural Golf discontinued sales of its
Lifetime of Better Golf instructional kit. This original instructional kit was
replaced by a new version called the Natural Golf Swing System. Natural Golf
began taking pre-orders on this new version in October 2002 and generally
collected customer payments in advance of shipment. The new version
instructional kit was not shipped until January 2003.
2.11 Tax Returns
Natural Golf has established reserves on its November 30, 2002 balance sheet for
potential sales tax liability related to sales occurring prior to 2001.
2.12 Title to Assets:
The 10% secured convertible debentures are secured by a first lien on Natural
Golf's inventory pursuant to a security agreement dated 11/11/02.
A promissory note issued by Natural Golf to Xxxxxxxx Xxxxx for $93,706 and dated
12/16/02 is secured by all assets of Natural Golf, subject to the first lien of
the 10% secured convertible debenture holders on Natural Golf's inventory.
On January 15, 2003, Natural Golf's lender, Xxxxxx Bank, waived through 12/1/03
the negative covenant of Natural Golf prohibiting it from granting a security
interest in its assets.
2.14 Material Contracts:
See other Sections of this Schedule A, as appropriate.
Natural Golf is in default on the payment of a $50,000 note issued to Xxxxxx
Xxxxxxxxx that matured 1/5/03. Natural Golf has offered payment in stock as
permitted under the note, but the holder would prefer payment in cash. The note
is expected to be renewed under terms similar to the existing convertible
debentures including the issuance of 12,500 warrants to purchase common stock in
Natural Golf at $4.00 per year.
The Xxxxxx Bank note has matured without payment by Natural Golf. Xxxxxx Bank
has indicated its intention to renew the note under terms and conditions not yet
formalized. See Section 2.8 of this disclosure schedule.
Natural Golf has an office and warehouse lease for its corporate headquarters in
Mount Prospect, IL and various equipment leases, schedules of which have been
provided.
In November 2002, Natural Golf entered into a 5-year employment agreement with
Xxxxxx Xxxxx. The agreement provides for a base salary, an annual bonus equal to
10% of net income less his base salary, and stock grants of up to 150,000 shares
based on revenue and net income targets.
4
Placement Agent Agreement between Natural Golf and Xxxxxxx Investments, LLC
dated January 3, 2003, and a letter agreement dated September 23, 2002.
Investor relations agreement with KCSA dated 10/18/02.
Independent contractor agreements with approximately 125 certified instructors
that provide golf instruction and sell golf products for Natural Golf. The
certified instructors receive a sales commission for orders which they place on
behalf of Natural Golf customers.
License agreement granting Xxxxx Xxxxxxx/Xxxxxxxx Xxxxxx the right to sell and
distribute Natural Golf's products and services in Sweden, Norway, Denmark and
Finland.
Natural Golf has entered into a number of royalty agreements in connection with
the production of the "A Lifetime of Better Golf' instructional package and the
production of an infomercial to promote this package. Generally, the agreements
require Natural Golf to pay a royalty for every package sold via media
advertising and minimum royalty payments for a specified period. Agreements of
this type relating to "A Lifetime of Better Golf" include Xxx Xxxxxxx, Xxx
Xxxxxxxxx and Sports Learning and Performance Center, Inc. Natural Golf no
longer produces or sells the "A Lifetime of Better Golf" instructional package.
Natural Golf has completed production, and commenced sales, of its new "Natural
Golf Swing System". A number of royalty agreements will be entered into in
connection with the production of the "Natural Golf Swing System' instructional
package and the production of an infomercial to promote this package. Although
the agreements are currently being negotiated, they generally require Natural
Golf to pay a royalty for every package sold via media advertising or a minimum
royalty payment for a specified period. Agreements of this type relating to
"Natural Golf Swing System" are expected to include Xxx Xxxxxxxxx, Xxx Xxxxxx,
Xxxx Xxxxx, Xxxxx Xxxxxxxx, Xxx Xxxxxxxx and others.
Natural Golf also has agreements with certain individuals, including Xxxxx
Xxxxx, Xxx Xxxxxx, Xxxx Xxxxxx, Xxx Xxxxxx and Xxxxx Xxxxxxx, which provides for
payments of $1 to $2 for each full price sale (and in some cases all sales) of
certain instructional kits, videos and DVDs.
Natural Golf has an agreement with Xxx Xxxxxx to promote Natural Golf's swing
system, golf clubs and other products. This agreement provides for a monthly
payment of $3,000 plus $2,000 for each mutually agreed upon appearance. The term
of this agreement is September 1, 2000 through August 31, 2003.
Natural Golf has an agreement with Xxxxx Xxxx, a professional golfer. This
agreement requires Natural Golf to pay minimum annual compensation of $60,000
plus tournament incentive compensation for finishes within the top 10 places in
PGA Tour tournaments and European Tour Tournaments. The royalty can increase up
to a maximum of $200,000 annually based on sales of certain products. The term
of this agreement expires March 31, 2003. Upon expiration of this term, Natural
Golf will have the option to extend the agreement for an additional two-year
term. Natural Golf has also agreed to issue the professional golfer 3,125
warrants for the purchase of common stock at the conclusion of each year under
the contract. As of November 30, 2002, 3,125 warrants have been issued. The
5
warrants have an exercise price of $.01 per share and expire September 30, 2003.
This agreement also requires Natural Golf to pay a 5% royalty of sales
originating from any European country.
Natural Golf has a consulting agreement with Xxxxxx Xxxxxxxxxxx for the design
and engineering of Natural Golf's products. The agreement provides for payment
of $3,000 per month and has been continued beyond the 12/31/02 expiration date.
2.15 Legal Proceedings:
None
2.16 Certain Transactions:
See other Sections of this Schedule A, as appropriate.
Natural Golf entered into an Employment Separation and Release Agreement with
Xxxxxxxx Xxxxx dated 12/16/02. The agreement provided for, among other things, a
warrant to purchase 80,733 shares of common stock at $0.01 per share for unpaid
compensation, a note for $93,706 payable 7/1/03 for unreimbursed expenses and
secured by a lien on Natural Golf's assets, and registration rights on his
shares and the shares underlying the warrants.
On February 11, 2003, Natural Golf issued 71,780 and 69,787 shares of common
stock to Xxxxxx Xxxxx and Xxxxxx Xxxxxxxxxx, respectively, at $4.00 per share
for payment of certain unpaid bonuses and compensation, loans, and unreimbursed
business expenses.
Certain notes maturing 10/15/02 were extended and renewed under new terms and
conditions (including extending the maturity to 7/1/03). Two of these note
holders were Xxxxx and Xxxxxxx Xxxxxxxxxx, who are the son and daughter of
Xxxxxx Xxxxxxxxxx.
From time to time, Xxxxxx Xxxxxxxxxx advances funds to Natural Golf on a
short-term basis. These advances amount to $15,000 at February 20, 2003
On February 10, 2003, Strategic Asset Management LLC purchased 1/2 Unit for
$25,000 of the 30 Units described in Section 2.9 of this Schedule A. Xxxxxxx X
Xxxxxx, one of the directors of Natural Golf, is affiliated as a principal of
Strategic Asset Management, LLC.
2.18 Intellectual Property:
SEE SCHEDULE 2.18 HERETO FOR A LISTING OF ISSUED AND PENDING PATENTS, TRADEMARKS
AND COPYRIGHTS.
2.20 Related Party Contracts:
See other Sections of this Schedule A, as appropriate.
6
Certain notes issued by Natural Golf to Xxxxx and Xxxxxxx Xxxxxxxxxx, the son
and daughter of Xxxxxx Xxxxxxxxxx, amounting to $100,000 in the aggregate.
Natural Golf purchases promotional items from Ha-Lo, a promotional products
company in which the sales person is Xxxx Xxxxx, brother of Xxxxxx Xxxxx.
Xxxxxx Xxxxxxxxxx personally guarantees the Xxxxxx Bank loan in the amount of
$400,000.
On February 10, 2003, Strategic Asset Management LLC purchased 1/2 Unit for
$25,000 of the 30 Units described in Section 2.9 of this Schedule A. Xxxxxxx X
Xxxxxx, one of the directors of Natural Golf, is affiliated as a principal of
Strategic Asset Management, LLC.
2.22 Benefit Plans
Natural Golf has a 401K retirement plan, a 2002 stock option plan and a health
insurance plan.
7
SCHEDULE B
None
8
EXHIBIT A
CERTIFICATE OF MERGER
OF
NATURAL GOLF ACQUISITION CORP..
INTO
NATURAL GOLF CORPORATION
Pursuant to Section 252 of the General Corporation Law of the State of
Delaware ("General Corporation Law"), Natural Golf Corporation certifies as
follows:
1. The constituent corporations are: Natural Golf Acquisition Corp.., a
Delaware corporation, and Natural Golf Corporation, an Illinois corporation.
2. An agreement and plan of merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with Section 252 of the General Corporation Law and in accordance with Sections
5/11.05 and 5/11.20 of the Illinois Business Corporation Act.
3. The name of the surviving corporation is Natural Golf Corporation.
4. The certificate of incorporation of the surviving corporation shall be
the certificate of incorporation of the surviving corporation.
5. The executed agreement and plan of merger is on file at the principal
office of Natural Golf Corporation at 0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxx Xxxxxxxx, Xxxxxxxx 00000.
6. A copy of the agreement and plan of merger will be furnished by Natural
Golf Corporation, on request and without cost, to any stockholder of either
constituent corporation.
7. Natural Golf Corporation hereby agrees that it may be served with
process in Delaware in any proceeding for enforcement of any obligation of
Natural Golf Acquisition Corp.., as well as for enforcement of any obligation of
Natural Golf Corporation arising from the merger, including any suit or other
proceeding to enforce the right of any stockholders as determined in appraisal
proceedings pursuant to ss. 262 of the General Corporation Law of Delaware of
Delaware and irrevocably appoints the Secretary of State as its agent to accept
service of process in any such suit or other proceedings. The address to which a
copy of such process shall be mailed by the Secretary of State is: 0000 Xxxxxxxx
Xxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxxx, Xxxxxxxx 00000.
NATURAL GOLF CORPORATION
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
Form BCA-11.25 ARTICLES OF MERGER EXHIBIT B
(Rev. Jan.. 1999) CONSOLIDATION OR EXCHANGE File #
------------------------------------------------------------------------------
Xxxx Xxxxx
Secretary of State
Department of Business Services
Xxxxxxxxxxx, XX 00000
Telephone (000) 000-0000
xxxx://xxx. xxx.xxxxx.xx.xx
------------------------------------- --------------------------
DO NOT SEND IN CASH SUBMIT IN DUPLICATE
Remit payment in check or money This space for use
order, payable to "Secretary of State" by Secretary of State
Filing Fee is $100, but if merger of
consolidation involves more than 2 Date
corporations, $50 for each additional Filing Fee $
corporation. Approved
-------------------------------------------------------------------------------
1. Names of the corporations proposing to merge and the state or country
of their incorporation:
Name of Corporation State or Country Corporation
of Incorporation File Number
Natural Golf Corporation Illinois 0000-000-0
-------------------------------------------------------------------------------
Natural Golf Acquisition Corp. Delaware
-------------------------------------------------------------------------------
2. The laws of the state or country under which each corporation is incorporated
permits such merger,consolidation or exchange. surviving
3. (a) Name of the surviving corporation: Natural Golf Corporation
(b) it shall be governed by the laws of: Illinois
-------------------------------------------------------------------------------
If not sufficient space to cover this point, add one or more sheets
of this size. merger
4. Plan of merger attached
5. Plan of merger was approved, as to each corporation not organized in
Illinois, incompliance with the laws of the exchange state under which it is
organized, and (b) as to each Illinois corporation, as follows:
(Thefollowing items are not applicable to mergers underss.11.30 - 90% owned
subsidiary provisions. See Article 7.)
(Only "X" one box for each Illinois corporation)
By the shareholders, a resolution of the board of directos
having been duly adopted and submitted to a vote at a
meeting of shareholders. Not less than the minimum numbe of
votes required by statute and by the articles of
incorporation voted in favor of the action taken
Name of Corporation
-------------------
Natural Gold Corporation [X]
-------------------------------------------------------------------------------
6. (Not applicable if surviving, new or acquiring corporation is an Illinois
corporation)
It is agreed that, upon and after the issuance of a certificate of merger,
consolidation or exchange by the Secretary of State of the State of Illinois:
a. The surviving, new or acquiring corporation may be served with process in
the State of Illinois in any proceeding for the enforcement of any
obligation of any corporation organized under the laws of the State of
Illinois which is a party to the merger, consolidation or exchange and in
any proceeding for the enforcement of the rights of a dissenting
shareholder of any such corporation organized under the laws of the State
of Illinois against the surviving, new or acquiring corporation.
b. The Secretary of State of the State of Illinois shall be and hereby
is irrevocably appointed as the agent of the surviving, new or acquiring
corporation to accept service of process in any such proceedings, and
c. The surviving, new, or acquiring corporation will promptly pay to the
dissenting shareholders of any corporation organized under the laws of the
State of Illinois which is a party to the merger, consolidation or exchange
the amount, if any, to which they shall be entitled under the provisions of
"The Business Corporation Act of 1983" of the State of Illinois with
respect to the rights of dissenting shareholders. By the shareholders, a
resolution of the board of directors having been duly adopted and submitted
to a vote at a meeting of share- holders. Not less than the minimum number
of votes required by statute and by the articles of incorporation voted in
favor of the action taken. (ss. 11.20) By written consent of the
shareholders having not less than the minimum number of votes required by
statute and by the articles of incorpora- tion. Shareholders who have not
consented in writing have been given notice in accor- dance with ss. 7.10
(ss. 11.220) By written consent of ALL the share- holders entitled to vote
on the action, in accordance with ss. 7.10 & ss. 11.20
------------------------------------------------------------------------------
7. (Complete this item if reporting a merger underss.11.30-90% owned subsidiary
provisions.)
a. The number of outstanding shares of each class of each merging subsidiary
corporation and the number of such shares of each class owned immediately
prior to the adoption of the plan of merger by the parent corporation, are:
Total Number of Shares Number of Shares of Each Class
Outstanding Owned Immediately Prior to
Name of Corporation of Each Class Merger by the Parent Corporation
--------------------- ------------- ---------------------------------
--------------------- ------------- ---------------------------------
--------------------- ------------- ---------------------------------
b. (Not applicable to 100% owned subsidaries)
The date of mailing a copy of the plan of merger and notice of the right to
dissent to the shareholders of each merging subsidiary
corporation was _____________________ , _________.
(Month & Day) (Year)
Was written consent for the merger or written waiver of the 30-day period by the
holders of all the outstanding shares of all subsidiary corporations received? [
]Yes [ ]No
(If the answer is "No," the duplicate copies of the Articles of Merger may not
be delivered to the Secretary of State until after 30 days following the mailing
of a copy of the plan of merger and of the notice of the right to dissent to the
shareholders of each merging subsidiary corporation.)
8. The undersigned corporations have caused these articles to be signed by their
duly authorized officers, each of whom affirms, under penalties of perjury, that
the facts stated herein are true. (All signatures must be in BLACK INK.)
2003
Dated _____________________________, ____________ Natural Golf Corporation
(Month & Day) (Year) (Exact Name of Corporation)
attested by
---------------------------------------------- By: ---------------------------
(Signature of Secretary or Assistant Secretary) (Signature pf President or Vice President)
Xxxxxx X. Xxxxx, Secretary Xxxxxx X. Xxxxx, President
---------------------------------------------- -----------------------------
(Type or Print Name) (Type or Print Name)
2003
Dated _____________________________, ____________ Natural Gold Acquisition Corp.
(Month & Day) (Year) (Exact Name of Corporation)
attested by
---------------------------------------------- By: ---------------------------
(Signature of Secretary or Assistant Secretary) (Signature pf President or Vice President)
Xxxxxxx X. Xxxxxx, Secretary Xxxxx X. Xxxxxxx, President
---------------------------------------------- -----------------------------
(Type or Print Name) (Type or Print Name)
SCHEDULE 2.18
TO
AGREEMENT AND PLAN OF MERGER
TRADEMARKS - REGISTERED
-----------------------
The Natural - United States
A Lifetime of Better Golf - United States
History Stick - United States
Natural Golf - Canada
European Union Natural Golf (logo) - United States
Natural Golf (Services) - United States
Natural Golf (Golf Clubs) - United States
Natural Golfer - United States
TI Hammer - United States
TRADEMARKS - PENDING
--------------------
Big Daddy - United States
Natural Golf - Japan
Pipeline - United States, Canada, European Union, Japan
Pro Performance - United States
Single Plane - United States
PATENTS - ISSUED
---------------
Golf Club Head Design and Method - United States Patent Xx. 0,000,000
Xxxx Xxxxx - Xxxxxx Xxxxxx Design Patent No. D388,144
PATENTS - PENDING
-----------------
Golf Club Head - United States Serial No. 29/151,184
COPYRIGHTS - REGISTERED
------------------------
Natural Golf Putting
Student Learning Manual
Why It Works
Golf Reform is At Hand
Bishops of the Game
How It Works
Faults & Fixes
Short Game "A Naturally Simple Way to Lower Your Score"
Driving for Distance