UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
February 22, 2006
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Date of Report (Date of earliest event reported)
American Business Corporation
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(Exact name of Registrant as specified in charter)
Colorado 33-9640-LA 90-0249312
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(State or other jurisdiction (Commission File (IRS. Employer
of incorporation) Number) Identification
Number)
11921 Brinley Ave., Louisville, KY 40243
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 244-1964
Item 1.01. Entry into a Material Definitive Agreement.
On February 22, 2006 we entered into a Merger Agreement with
Telomolecular Corp., a Delaware corporation, pursuant to which
Telomolecular would merge with and into AMBC. After the merger
Telomolecular shareholders would own or have the right to receive
approximately 74.5% of our outstanding common stock (on a fully-diluted
basis). Telomolecular is a development stage bio-tech company with
principal offices in Sacramento, California. It was recently
organized to develop a new class of drugs to deliver large-molecule
proteins important in the treatment of aging and age-related diseases.
Consummation of the merger is subject to numerous conditions, including
satisfaction of each party with its due diligence investigation of the
other. A tentative closing date has been set for late April, 2006.
Item 7(c) Exhibits
Merger Agreement between Company and Telemolecular Corp. dated February
22, 2006
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, we have duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: February 28, 2006
AMERICAN BUSINESS CORPORATION
By: /s/ Anthony Russo
----------------------
Name: Anthony Russo
Title: CEO & President
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Exhibit
MERGER AGREEMENT
BETWEEN
American Business Corporation (Colorado)
AND
Telomolecular Corp. (Delaware)
MERGER AGREEMENT, dated as of February 22, 2006 (the "Agreement"),
between American Business Corporation, a Colorado corporation ("AMBC"
or "Purchaser"), and Telomolecular Corp., a Delaware corporation
("Telemolecular" or "Company").
PURPOSE OF MERGER, It is represented that AMBC, a company filing
reports with the U.S. Securities & Exchange Commission under Section
15(d) of the Securities Exchange of Act of 1934, as amended, no longer
conducts meaningful business operations. It is represented that
Telomolecular has been newly-formed as a biopharmaceutical company with
valuable licensing rights to technology patents upon which to base
substantial research and development, and upon which to base commercial
pharmaceutical programs. Telomolecular shall be merged into AMBC in
order to bring about meaningful direction to AMBC and its' shareholders.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Purchaser wishes to acquire the Company by Merger (the
"Merger");
WHEREAS, the stockholders of the Company wish to have the Company
merge with and into Purchaser upon, under and subject to certain terms
and conditions agreed upon by and among the parties as hereinafter set
forth; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter contained, the parties hereby
agree as follows:
Article I
MERGER
1.1 Surviving Corporation.
The parties hereto agree in accordance with the provisions of
this Agreement and the laws of the State of Colorado and the State of
Delaware, at the Effective Time (as defined in Section 1.6), the
Company shall be merged with and into the Purchaser, and the Purchaser
shall be the surviving corporation (hereinafter sometimes referred to
as the "Surviving Corporation") and shall continue its corporate
existence under the laws of the Colorado. At the Effective Time the
separate existence of the Company shall cease. The Articles of Merger
filed with the Secretary of State of the State of Colorado to effect
the Merger shall change the name of Purchaser to "Telomolecular Corp."
1.2 Effect and Procedure.
In accordance with the provisions of this Agreement, at the
Effective Time, all the property, real, personal and mixed of each of
the constituent corporations and all debts due on whatever account to
any of them, including subscriptions to shares and other choses in
action belonging to either of them, shall be taken and deemed to be
transferred and vested in the Surviving Corporation without further
act or deed. The Surviving Corporation shall thenceforth be responsible
for all the liabilities and obligations of the constituent
corporations, but the liabilities of the constituent corporations or
their shareholders, directors or officers shall not be affected, nor
shall the rights of the creditors thereof or of any persons dealing
with the constituent corporations, or any liens upon the property of
such corporations, be impaired by the Merger and any claim existing or
action or proceeding pending by or against any of the constituent
corporations may be prosecuted to judgment as if the Merger had not
taken place, and the Surviving Corporation may be proceeded against or
substituted in its place. AMBC warrants that all material obligations
have been or will be resolved before the Effective Time.
1.3 Articles of Incorporation.
The Articles of Incorporation of the Surviving Corporation shall
be amended and restated as set forth in the Articles of Merger to be
filed in the state of Colorado. The Company may at the discretion of
its managers choose to redomicile in the State of Delaware within 120
days of the merger.
1.4 By-Laws.
The By-Laws of AMBC, as in effect immediately prior to the
Effective Time, shall be the By-Laws of the Surviving Corporation until
amended as therein provided.
1.5 Directors and Officers.
At the Effective Time, the Board of Directors and officers of
Company shall be the directors and officers of the Surviving
Corporation, to hold office in accordance with the Articles of
Incorporation and By-Laws of the Surviving Corporation.
1.6 Effective Time, Closing.
The Merger shall become effective at the time on the date as to
which the Articles of Merger have been accepted by both the Secretary
of State of the State of Colorado and the Secretary of State of the
State of Delaware (the "Effective Time").
1.7 Additional Actions.
If, at any time after the Effective Time, the Surviving
Corporation shall consider or be advised that any further assignments
or assurances in law or any other acts are necessary or desirable (i)
to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation, title to and possession of any property or right of the
Company acquired or to be acquired by reason of, or as a result of, the
Merger, or (ii) otherwise to carry out the purposes of this Agreement,
the Company and its proper officers and directors shall be deemed to
have granted to the Surviving Corporation an irrevocable power of
attorney, coupled with an interest, to execute and deliver all such
proper deeds, assignments and assurances in law and to do all acts
necessary or proper to vest, perfect or confirm title to and possession
of such property or rights in the Surviving Corporation and otherwise
to carry out the purposes of this Agreement; and the proper officers
and directors of the Surviving Corporation are fully authorized in the
name of the Company or otherwise to take any and all such action.
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1.8 Tax-free reorganization.
The parties intend to adopt this Agreement as a tax free plan of
reorganization and to consummate the Merger in accordance with the
provisions of Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended. The parties may determine to restructure the proposed
reorganization as a tax-free merger between Company and a newly-formed
subsidiary of Purchaser.
Article II
CONVERSION OF SHARES
2.1 Conversion of the Company's Common Stock.
In the Merger the holders of shares of Company common stock and
common stock equivalents (i.e. options and warrants for Company common
stock) shall receive a number of shares of Purchaser common stock and
Purchaser Common Stock Equivalents (as defined in Section 4.3) equal
to seventy-four and one-half percent (74.5%) of the post-Merger, fully-
diluted capitalization of Purchaser. Prior to the respective notices
of shareholder meeting being sent to the shareholders of each of
Company and Purchaser this Agreement shall be amended to state the
exchange ratio for the outstanding shares of Company Common Stock and
manner of converting Company Common Stock Equivalents into Purchaser
Common Stock Equivalents (as defined in Section 3.3).
2.2 Exchange of Shares.
(a) After the Effective Time there shall be no transfers on the stock
transfer books of the Surviving Corporation of the shares of Company
Common Stock or Company Common Stock Equivalents which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
certificates or instruments representing such are presented for
transfer to the Surviving Corporation, they shall be cancelled and
exchanged for certificates or instruments representing shares of
Purchaser Common Stock or Purchaser Common Stock Equivalents as
provided in this Section 2.
(b) [deleted]
(c) The AMBC Common Stock issuable to stockholders of the Company in
the Merger will not be registered under the Securities Act of 1933, as
amended (the "Act") or any state securities acts and will be issued in
reliance upon certain exemptions contained in federal and state
securities laws. There will be substantial restrictions on the
transferability of the AMBC Common Stock received in the Merger.
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Article III
PURCHASER REPRESENTATIONS AND WARRANTIES
Except as set forth in the disclosure letter delivered by Purchaser to
Company on or prior to the date hereof (the "Purchaser Disclosure
Letter"), which Purchaser Disclosure Letter is hereby incorporated by
reference, Purchaser represents and warrants to Company as follows:
3.1 Organization and Good Standing.
It is a corporation duly organized, validly existing and in good
standing under the laws its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted. Purchaser is
duly qualified or authorized to do business as a foreign corporation
and is in good standing under the laws of (i) each jurisdiction in
which it owns or leases real property and (ii) each other jurisdiction
in which the conduct of its business or the ownership of its assets
requires such qualification and where a failure to be so qualified
would have a material adverse effect on the business, assets, financial
condition or prospects of Purchaser ("Purchaser Material Adverse
Effect").
3.2 Authorization of Agreement.
It has all requisite power, authority and legal capacity to execute and
deliver this Agreement, and each other agreement, document, or
instrument or certificate contemplated by this Agreement or to
be executed by it in connection with the consummation of the
transactions contemplated by this Agreement, and to consummate the
transactions contemplated hereby and thereby, other than approval of
its shareholders under applicable Colorado law. This Agreement has
been, and each of the documents to be executed by it will be at or
prior to the Effective Time, duly and validly executed and delivered by
it, and (assuming the due authorization, execution and delivery by the
other parties hereto and thereto) this Agreement constitutes, and each
of the documents when so executed and delivered will constitute, legal,
valid and binding obligations of Purchaser, enforceable against the
Purchaser in accordance with their respective terms.
3.3 Capitalization.
(a) The authorized capital stock of AMBC consists of 500,000,000 shares
of Common Stock, $.01 par value and 10,000,000 shares of Preferred
Stock without par value. As of the date hereof, there are:
- Preferred stock, no par value; 10,000,000 shares authorized
o Series A, 90,000 shares issued and outstanding
o Series B, 2,000 shares issued and outstanding
o Series C, 450,000 shares issued and outstanding
o Series D, 950 shares issued and outstanding
o Series E, 2,300 shares issued and outstanding
- Common stock, par value $.001 per share ("Purchaser Common
Stock"); 500,000,000 shares authorized, 69,870,517 shares issued
and outstanding
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(b) Immediately prior to the Effective Time there shall be no existing
option, warrant, call, right, commitment or other agreement of any
character to which the Purchaser is a party requiring, and there will
be no securities of the Purchaser outstanding which upon conversion or
exchange would require, the issuance, sale or transfer of any
additional shares of capital stock or other equity securities of the
Purchaser or other securities convertible into, exchangeable for or
evidencing the right to subscribe for or purchase shares of capital
stock or other equity securities of the Purchaser ("Purchaser Common
Stock Equivalents"). The Purchaser is not a party to any voting trust
or other voting agreement with respect to any of the shares of
Purchaser Common Stock or to any agreement relating to the issuance,
sale, redemption, transfer or other disposition of the capital stock of
the Purchaser.
(c) Immediately prior to the dates on which Company and Purchaser shall
give notice to their shareholders of their respective meetings to
approve the Merger and immediately prior to the Effective Time,
Purchaser shall have outstanding 69,870,517 shares of common stock and
10,000 shares of Series F Preferred Stock convertible into a number of
shares of Purchaser Common Stock as shall equal 11.5% of the
outstanding Purchaser Common Stock on a post-Merger, fully-diluted
basis, with the rights and preferences set forth in Exhibit 3.3(c)
hereto.
3.4 Subsidiaries. Purchaser has no subsidiaries.
3.5 Corporate Records.
(a) The Purchaser will deliver within 14 days to the Company true,
correct and complete copies of the Articles of Incorporation and By-
laws of Purchaser.
(b) The minute book of the Purchaser previously made available to
the Company contains complete and accurate records of all meetings and
accurately reflect all other corporate action of the stockholders and
board of directors (including committees thereof) of the Purchaser.
Before the Effective Time, true, correct and complete copies of the
stock certificate book and stock transfer ledger of the Purchaser will
be made available to the Company. All stock transfer taxes levied or
payable with respect to all transfers of shares of the Purchaser prior
to the date hereof have been paid and appropriate transfer tax stamps
affixed.
3.6 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Purchaser of this
Agreement, the consummation of the transactions contemplated hereby or
thereby, or compliance by the Purchaser with any of the provisions
hereof or thereof will (i) conflict with, or result in the breach of,
any provision of the certificate of incorporation or by-laws of the
company; (ii) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to
which the Purchaser is a party or by which it or any of its properties
or assets is bound; (iii) violate any statute, rule, regulation, order
or decree of any governmental body or authority by which the Purchaser
is bound; or (iv) result in the creation of any lien, charge
or encumbrance upon the properties or assets of the Purchaser except,
in case of clauses (ii), (iii) and (iv), for such violations, breaches
or defaults as would not, individually or in the aggregate, have a
Purchaser Material Adverse Effect.
(b) No consent, waiver, approval, order, permit or authorization
of, or declaration or filing with, or notification to, any person or
governmental body is required on the part of the Purchaser in
connection with the execution and delivery of this Agreement or the
compliance by the Purchaser with any of the provisions hereof or
thereof, other than approval of Purchaser's shareholders under
applicable Colorado law.
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3.7 Financial Statements.
Purchaser has delivered to Company copies of Purchaser's Annual
Report on Form 10-K for the year ended 2004 and its Quarterly Reports
on Form 10-Q for the first three fiscal quarters of 2005 (collectively,
the "AMBC Reports"), as filed by Purchaser with the Securities and
Exchange Commission. All of the AMBC Reports are delivered without
exhibits. The financial statements contained in the AMBC Reports (the
"AMBC Financial Statements") fairly present the financial condition and
results of operations of AMBC as at and for the periods therein
specified in accordance with generally accepted accounting principles
consistently applied, all as more particularly set forth in such
financial statements and the notes thereto.
3.8 No Undisclosed Liabilities.
As of the Effective Time Purchaser will not have any
indebtedness, obligations, guarantees or liabilities of any kind
(whether accrued, absolute, contingent or otherwise, and whether due or
to become due) that would have been required to be reflected in,
reserved against or otherwise described on the AMBC Financial
Statements or in the notes thereto in accordance with GAAP which are
not fully reflected in, reserved against or otherwise described in the
Financial Statements or the notes thereto or which were not incurred in
the ordinary course of business since the date of the AMBC Financial
Statements.
3.9 Taxes.
(a)(A) all federal, state, local, sales, use or other tax returns
of any kind or nature ("Tax Returns") required to be filed by or on
behalf of the Company have been properly prepared and duly and timely
filed with the appropriate taxing authorities in all jurisdictions in
which such Tax Returns are required to be filed (after giving effect
to any valid extensions of time in which to make such filings), and all
such Tax Returns were true, complete and correct in all material
respects; (B) all amounts shown on such Tax Returns (including interest
and penalties) as due from the Purchaser ("Taxes") have been fully and
timely paid, and adequate reserves or accruals for Taxes have been
provided for in the Purchaser's financial statements with respect to
any period for which Tax Returns have not yet been filed or for which
Taxes are not yet due and owing; and (C) the Purchaser has not executed
or filed with the IRS or any other taxing authority any agreement,
waiver or other document or arrangement extending or having the effect
of extending the period for assessment or collection of Taxes
(including, b ut not limited to, any applicable statute of limitation),
and no power of attorney with respect to any Tax matter is currently
in force.
(b) All deficiencies asserted or assessments made as a result of
any examinations by the IRS or any other taxing authority of the Tax
Returns of or covering or including the Purchaser have been fully paid,
and there are no other audits or investigations by any taxing authority
in progress, nor has the Purchaser received any notice from any taxing
authority that it intends to conduct such an audit or investigation. A
federal, state, local or foreign taxing authority in any current or
prior examination, which by application of the same or similar
principles, could reasonably be expected to result in a proposed
deficiency for any subsequent taxable period, has raised no issue.
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(c) There are no Liens as a result of any unpaid Taxes upon any
of the assets of the Purchaser.
3.10 Real Property.
Purchaser does not own, lease or otherwise control any real
property.
3.11 Tangible Personal Property.
The Purchaser does not own, lease or otherwise control any
tangible or intangible personal property.
3.12 Material Contracts.
Purchaser has no material contracts.
3.13 Litigation.
There is no suit, action, proceeding, investigation, claim or
order pending or, to the knowledge of the Purchaser, overtly threatened
against the Purchaser, or against any of the officers, directors or key
employees of the Purchaser with respect to their business activities on
behalf of the Purchaser, which, if adversely determined, would have a
Purchaser Material Adverse Effect, before any court, or before any
governmental department, commission, board, agency, or instrumentality;
nor to the knowledge of the Purchaser, is there any reasonable basis
for any such action, proceeding, or investigation.
3.14 Insurance.
The Purchaser does not maintain any insurance.
3.15 Receivables; Payables.
(a) The Purchaser has no accounts receivable as of the date
thereof.
(b) All accounts payable of the Purchaser reflected in the
Balance Sheet or arising after the date thereof will be paid prior to
the Effective Date.
3.16 No Misrepresentation.
No representation or warranty of the Purchaser contained in this
Agreement, in any schedule hereto, in any certificate or other
instrument furnished by the Purchaser to the Company pursuant to the
terms hereof, or in the AMBC Reports contains any untrue statement of
a material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
3.17 Financial Advisors.
No Person has acted, directly or indirectly, as a broker, finder
or financial advisor for the Purchaser in connection with the
transactions contemplated by this Agreement and no person is entitled
to any fee or commission or like payment in respect thereof.
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Article IV
COMPANY REPRESENTATIONS AND WARRANTIES
Except as set forth in the disclosure letter delivered by Company to
Purchaser on or prior to the date hereof (the "Company Disclosure
Letter"), which Comany Disclosure Letter is hereby incorporated by
reference, Company represents and warrants to Purchaser that
4.1 Organization and Good Standing.
It is a corporation duly organized, validly existing and in good
standing under the laws its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted. The Company
is duly qualified or authorized to do business as a foreign corporation
and is in good standing under the laws of (i) each jurisdiction in
which it owns or leases real property and (ii) each other jurisdiction
in which the conduct of its business or the ownership of its assets
requires such qualification and where a failure to be so qualified
would have a material adverse effect on the business, assets,
financial condition or prospects of Company ("Company Material Adverse
Effect").
4.2 Authorization of Agreement.
It has all requisite power, authority and legal capacity to
execute and deliver this Agreement, and each other agreement, document,
or instrument or certificate contemplated by this Agreement or to be
executed by it in connection with the consummation of the transactions
contemplated by this Agreement, and to consummate the transactions
contemplated hereby and thereby, other than approval of Company's
shareholders under applicable Delaware law. This Agreement has been,
and each of the documents to be executed by it will be at or prior to
the Effective Time, duly and validly executed and delivered by it, and
(assuming the due authorization, execution and delivery by the other
parties hereto and thereto) this Agreement constitutes, and each of the
documents when so executed and delivered will constitute, legal, valid
and binding obligations of Purchaser, enforceable against the Company
in accordance with their respective terms.
4.3 Capitalization.
(a) The authorized capital stock of the Company consists of 4,500,000
shares of common stock, $5.00 par value per share ("Company Common
Stock"), and 300,000 shares of preferred stock, without par value. As
of the date hereof, there are outstanding 3,600,000 shares of Company
Common Stock and no shares of preferred stock.
(b) Except as set forth in Schedule 3.3 to the Disclosure Letter, there
is no existing option, warrant, call, right, commitment or other
agreement of any character to which any the Company is a party
requiring, and there are no securities of the Company outstanding which
upon conversion or exchange would require, the issuance, sale or
transfer of any additional shares of capital stock or other equity
securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase
shares of capital stock or other equity securities of the Company
("Company Common Stock Equivalents"). The Company is not a party to any
voting trust or other voting agreement with respect to any of the
shares of Company Common Stock or to any agreement relating to the
issuance, sale, redemption, transfer or other disposition of the
capital stock of the Company.
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(c) As at the Effective Time Company shall have outstanding no more
than 372,629,483 shares of Company Common Stock and Company Common
Stock Equivalents.
4.4 Subsidiaries. Purchaser has no subsidiaries.
4.5 Corporate Records.
(a) The Company will deliver to the Purchaser within 14 days of
signature true, correct and complete copies of the Certificate of
Incorporation and By-laws of Company.
(b) The minute book of the Company will be made available to the
Purchaser within 14 days of signature and will contain complete and
accurate records of all meetings and accurately reflect all other
corporate action of the stockholders and board of directors (including
committees thereof) of the Company. Before the Effective Time, true,
correct and complete copies of the stock certificate book and stock
transfer ledger of the Company will be made available to the Purchaser.
All stock transfer taxes levied or payable with respect to all
transfers of shares of the Company prior to the date hereof have been
paid and appropriate transfer tax stamps affixed.
4.6 Conflicts; Consents of Third Parties.
(a) None of the execution and delivery by the Company of this
Agreement, the consummation of the transactions contemplated hereby or
thereby, or compliance by the Company with any of the provisions
hereof or thereof will (i) conflict with, or result in the breach of,
any provision of the certificate of incorporation or by-laws of the
Company; (ii) conflict with, violate, result in the breach or
termination of, or constitute a default under any note, bond, mortgage,
indenture, license, agreement or other instrument or obligation to
which the Company is a party or by which it or any of its properties
or assets is bound; (iii) violate any statute, rule, regulation, order
or decree of any governmental body or authority by which the Company
is bound; or (iv) result in the creation of any lien, charge or
encumbrance upon the properties or assets of the Company except, in
case of clauses (ii), (iii) and (iv), for such violations, breaches or
defaults as would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(b) No consent, waiver, approval, order, permit or authorization
of, or declaration or filing with, or notification to, any person or
governmental body is required on the part of the Company in connection
with the execution and delivery of this Agreement or the compliance by
the Company with any of the provisions hereof or thereof, other than
approval of Company's shareholders under applicable Delaware law.
4.7 Ownership and Transfer of Shares.
To the knowledge of the Company, each of the stockholders of the
Company is the record and beneficial owner of the shares of Company
Common Stock indicated as being owned by such Seller on Schedule 4.7
to the Disclosure Letter, free and clear of any and all liens, charges
or encumbrances of any kind or nature. Schedule 4.7 includes the
current business and residence addresses for such shareholders. None
of the outstanding Company Common Stock was sold in an offering which
constituted a "general solicitation" for purposes of Regulation D under
the Securities Act of 1933, as amended.
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4.8 Financial Statements.
The Company will deliver to the Purchaser copies of its audited
balance sheet as of December 31, 2005 ("Company Balance Sheet Date"),
income statement, statement of cash flows, and changes in stockholders'
equity for the period ending on the Company Balance Sheet Date
("Company Financial Statements"). The Company Financial Statements are
complete and correct in all material respects, have been prepared in
accordance with GAAP and present fairly the financial position, results
of operations, cash flows, and changes in stockholders' equity of the
Company as at the dates and for the periods indicated.
4.9 No Undisclosed Liabilities.
The Company does not have any indebtedness, obligations,
guarantees or liabilities of any kind (whether accrued, absolute,
contingent or otherwise, and whether due or to become due) that would
have been required to be reflected in, reserved against or otherwise
described on the Company Financial Statements or in the notes thereto
in accordance with GAAP which are not fully reflected in, reserved
against or otherwise described in the Company Financial Statements or
the notes thereto or which were not incurred in the ordinary course of
business since the Balance Sheet Date.
4.10 Taxes.
(a) Except as set forth on Schedule 4.10 to the Disclosure
Letter, (A) all federal, state, local, sales, use or other tax returns
of any kind or nature ("Tax Returns") required to be filed by or on
behalf of the Company have been properly prepared and duly and timely
filed with the appropriate taxing authorities in all jurisdictions in
which such Tax Returns are required to be filed (after giving effect
to any valid extensions of time in which to make such filings), and all
such Tax Returns were true, complete and correct in all material
respects; (B) all amounts shown on such Tax Returns (including
interest and penalties) as due from the Company ("Taxes") have been
fully and timely paid, and adequate reserves or accruals for Taxes have
been provided for in the Company's financial statements with respect to
any period for which Tax Returns have not yet been filed or for which
Taxes are not yet due and owing; and (C) the Company has not executed
or filed with the IRS or any other taxing authority any agreement,
waiver or other document or arrangement extending or having the effect
of extending the period for assessment or collection of Taxes
(including, but not limited to, any applicable statute of limitation),
and no power of attorney with respect to any Tax matter is currently
in force.
(b) All deficiencies asserted or assessments made as a result of
any examinations by the IRS or any other taxing authority of the Tax
Returns of or covering or including the Company have been fully paid,
and there are no other audits or investigations by any taxing authority
in progress, nor has the Company received any notice from any taxing
authority that it intends to conduct such an audit or investigation. A
federal, state, local or foreign taxing authority in any current or
prior examination, which by application of the same or similar
principles, could reasonably be expected to result in a proposed
deficiency for any subsequent taxable period, has raised no issue.
(c) There are no liens as a result of any unpaid Taxes upon any
of the assets of the Company.
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4.11 Real Property.
The Company does not own, lease or otherwise control any real
property.
4.12 Tangible Personal Property.
The Company does not own, lease or otherwise control any tangible
personal property.
4.13 Intangible Property.
The Company owns and controls exclusive sublicensing rights (for
telomeric elongation) to United States Patent Application, Docket No.
63206 and 63206 PCT (the "Patent"), described as sustained-release
nanoparticle compositions and methods for using the same and any
divisions, re-issues, re-examinations, and continuations to the extent
they are directed to the subject matter and dominated by the claims of
the Patent. These rights confer exclusive non-competitive use of the
technology in a field, are permanent (contingent upon the satisfaction
of milestones), and permit for the further sublicensing of technology
by Telomolecular for certain described uses.
These patents shall be transferred to the Surviving Company under
the authority of the existing agreement entitled "EXCLUSIVE SUBLICENSE
AGREEMENT" between UNeMed and Telomolecular which designates transfer
of ownership in the circumstance of merger. Furthermore, UNeMed will be
asked to provide certification that this transfer is acceptable. All
other trade secrets and intellectual property not described herein
shall also be transferred to the Surviving Company and incorporated as
part of the company's intellectual domain.
4.14 Material Contracts.
Schedule 4.14 of the Disclosure Schedule sets forth all of the
contracts to which the Company is a party or by which it is bound
(collectively, the "Material Contracts"). There have been made
available to the Purchaser, its affiliates and their representative's
true and complete copies of all of the Material Contracts. All of the
Material Contracts and other agreements re in full force and effect
and are the legal, valid and binding obligation of the Company,
enforceable against them in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or
in equity). The Company is not in default in any material respect under
any Material Contracts, nor, to the knowledge of the Company, is any
other party to any Material Contract in default thereunder in any
material respect.
4.15 Litigation.
There is no suit, action, proceeding, investigation, claim or
order pending or, to the knowledge of the Company, overtly threatened
against the Company, or against any of the officers, directors or key
employees of the Company with respect to their business activities on
behalf of the Company, which, if adversely determined, would have a
Company Material Adverse Effect, before any court, or before any
governmental department, commission, board, agency, or instrumentality;
nor to the knowledge of the Company, is there any reasonable basis for
any such action, proceeding, or investigation.
11
4.16 Compliance with Laws; Permits.
The Company is in compliance with all laws applicable to the
Company or o the conduct of the business or operations of the Company
or the use of its properties (including any leased properties) and
assets, except for such non-compliances as would not, individually or
in the aggregate, have a Company Material Adverse Effect. The Company
has all governmental permits and approvals from state, federal or
local authorities which are required for the Company to operate its
business, except for those the absence of which would not, individually
or in the aggregate, have a Company Material Adverse Effect.
4.17 Insurance.
The Company does not maintain any insurance. The Company is
required, according to the terms of its licensing agreement with
UNeMed, to purchase and maintain general liability insurance.
4.18 Receivables; Payables.
(a) The Company has no accounts receivable.
(b) All accounts payable of the Company are reflected in the
Balance Sheet.
4.19 No Misrepresentation.
No representation or warranty of the Company contained in this
Agreement, in any schedule hereto, in any certificate or other
instrument furnished by the Company to the Purchaser pursuant to the
terms hereof, or in the Confidential Private Placement Memorandum of
the Company dated February 1, 2006 contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
4.20 Financial Advisors.
No person has acted, directly or indirectly, as a broker, finder
or financial advisor for the Company in connection with the
transactions contemplated by this Agreement and no Person is entitled
to any fee or commission or like payment in respect thereof.
Article V
COVENANTS
5.1 Access to Information.
The Company and the Purchaser agree that, prior to the Effective
Date, each party shall be entitled, through its officers, employees and
representatives (including, without limitation, its legal advisors and
accountants), to make such investigation of the properties, businesses
and operations of the other party and its subsidiaries and such
examination of the books, records and financial condition of the
thereof as it reasonably requests and to make extracts and copies of
such books and records. Any such investigation and examination shall
be conducted during regular business hours and under reasonable
circumstances. No investigation prior to or after the date of this
Agreement shall diminish or obviate any of the representations,
warranties, covenants or agreements of each party contained in this
Agreement. In order that each party may have full opportunity to make
such physical, business, accounting and legal review, examination or
investigation as it may reasonably request, each party shall cause its
officers, employees, consultants, agents, accountants, attorneys and
other representatives to cooperate fully with such representatives in
connection with such review and examination.
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5.2 Conduct of the Business Pending the Closing.
(a) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the other party to this Agreement,
each party shall:
(i) conduct its business only in the ordinary course
consistent with past practice;
(ii) use its best efforts to (A) preserve its present
business operations, organization (including, without limitation,
management and the sales force) and goodwill and (B) preserve its
present relationship with persons having business dealings with it;
(iii) maintain (A) all its assets and properties in their
current condition, ordinary wear and tear excepted and (B) insurance
upon all of its assets and properties in such amounts and of such kinds
comparable to that in effect on the date of this Agreement; and
(iv) maintain its books, accounts and records in the ordinary
course of business consistent with past practices.
(b) Except as otherwise expressly contemplated by this Agreement
or with the prior written consent of the other party to this Agreement,
neither party shall:
(i) declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock or that of a subsidiary
or repurchase, redeem or otherwise acquire any outstanding shares its
capital stock or other securities of, or other ownership interests in,
it or any of its subsidiaries except;
(ii) transfer, issue, sell or dispose of any shares of its
capital stock or other securities or grant options, warrants, calls or
other rights to purchase or otherwise acquire shares of its capital
stock or other securities, except as set forth above;
(iii) effect any recapitalization, reclassification, stock
split or like change in its capitalization or any of its subsidiaries;
(iv) amend its certificate of incorporation or by-laws or of
any of its subsidiaries;
(v) (A) materially increase the annual level of compensation
of any of its employees, (B) increase the annual level of compensation
payable or to become payable to any of their respective executive
officers, (C) grant any unusual or extraordinary bonus, benefit or
other direct or indirect compensation to any employee, director or
consultant, other than in the ordinary course consistent with past
practice, (D) increase the coverage or benefits available under any
(or create any new) severance pay, termination pay, vacation pay,
company awards, salary continuation for disability, sick leave,
deferred compensation, bonus or other incentive compensation,
insurance, pension or other employee benefit plan or arrangement made
to, for, or with any of its directors, officers, employees, agents or
representatives or otherwise modify or amend or terminate any such
plan or arrangement or (E) enter into any employment, deferred
compensation, severance, consulting, non-competition or similar
agreement (or amend any such agreement);
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(vi) except for trade payables and for indebtedness for
borrowed money incurred in the ordinary course of business and
consistent with past practice, borrow monies for any reason or draw
down on any line of credit or debt obligation, or become the guarantor,
surety, endorser or otherwise liable for any debt, obligation or
liability (contingent or otherwise) of any other person;
(vii) subject to any lien (except for leases that do not
materially impair the use of the property subject thereto in their
respective businesses as presently conducted), any of its properties
or assets (whether tangible or intangible);
(viii) acquire any material properties or assets or sell,
assign, transfer, convey, lease or otherwise dispose of any of the
material properties or assets (except for fair consideration in the
ordinary course of business consistent with past practice and
explicitly except for any material property considered useful in the
art of "telomere elongation" that is deemed as a desirable acquisition
target by Company management;
(ix) cancel or compromise any debt or claim or waive or
release any material right except in the ordinary course of business
consistent with past practice;
(x) introduce any material change with respect to the
operation of its business, including any material change in the types,
nature, composition or quality of its products or services, experience
any material change in any contribution of its product lines to its
revenues or net income, or, other than in the ordinary course of
business, make any change in product specifications or prices or terms
of distributions of such products;
(xi) enter into any transaction or make or enter into any
contract which by reason of its size or otherwise is not in the
ordinary course of business consistent with past practice; or
(xii) agree to do anything prohibited by this Section 5.2 or
anything which would make any of its representations and warranties
contained in this Agreement untrue or incorrect in any material respect
as of any time through and including the Effective Time.
(c) A general exception to these covenants is that the Company
may negotiate, and use all available means including all of its current
assets and financial resources, to reach any agreement with any entity
as it relates to the acquisition of intellectual property of any kind
deemed relevant to the elongation and repair of chromosomal telomeres.
5.3 Disclosure Supplements.
Within 10 days after the end of each month, Purchaser and Company
will promptly supplement or amend its Disclosure Letter with respect
to any matter hereafter arising which, if existing, occurring or known
at the date of this Agreement, would have been required to be set
forth or described in their Disclosure Letter or which is necessary to
correct any information in their Disclosure Letter which has been
rendered materially inaccurate thereby. Notwithstanding the foregoing,
the amendment or supplementation of a Disclosure Letter shall not be
considered as a cure of any defect, or a waiver of any rights,
including any right of termination or any breach under this Agreement
which may otherwise arise or exist under this Agreement.
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5.4 Shareholder Meetings.
The parties shall notice and conduct shareholder meetings to act
upon the proposed Merger promptly after each party has given the other
notice that it has completed its due diligence investigation and is
satisfied thereiwith.
5.5 Consents.
The Company shall use its best efforts, and the Purchaser shall
cooperate with the Company, to obtain at the earliest practicable date
all consents and approvals required to consummate the transactions
contemplated by this Agreement.
5.6 Other Actions.
Each of the Company and the Purchaser shall use its best efforts
to (i) take all actions necessary or appropriate to consummate the
transactions contemplated by this Agreement and (ii) cause the
fulfillment at the earliest practicable date of all of the conditions
to their respective obligations to consummate the transactions
contemplated by this Agreement.
5.7 Publicity.
Neither the Company nor the Purchaser shall, before completion
of the Merger, issue any press release or public announcement
concerning this Agreement or the transactions c ontemplated hereby
without obtaining the prior written approval of the other party hereto,
which approval will not be unreasonably withheld or delayed, unless,
in the sole judgment of the Purchaser, disclosure is otherwise
required by applicable law or by the applicable rules of any stock
exchange on which the Purchaser lists or intends to list securities,
provided that, to the extent required by applicable law, the party
intending to make such release shall use its best efforts consistent
with such applicable law to consult with the other party with respect
to the text thereof.
Article VI
CONDITIONS TO CLOSING
6.1 Conditions Precedent to Obligations of Purchaser.
The obligation of the Purchaser to consummate the transactions
contemplated by this Agreement is subject to the fulfillment, on or
prior to the Effective Time, of each of the following conditions (any
or all of which may be waived by the Purchaser in whole or in part to
the extent permitted by applicable law):
(a) All representations and warranties of the Company contained
herein shall be true and correct in all material respects as of the
Effective Time with the same effect as though those representations
and warranties had been made again at and as of that time (except for
those representations and warranties which speak as of a specific date,
which shall be true and correct in all material respects as of such
date);
(b) the Company shall have performed and complied in all material
respects with all obligations and covenants required by this Agreement
to be performed or complied with by it on or prior to the Effective
Time;
(c) the Purchaser shall have been furnished with certificates
(dated the Effective Date and in form and substance reasonably
satisfactory to the Purchaser) executed by the President of the
Company certifying as to the fulfillment of the conditions specified
in Sections 6.1(a) and 6.1(b) hereof;
15
(d) the Company shall have obtained all consents and waivers
referred to in Section 4.6 hereof with respect to the transactions
contemplated by this Agreement;
(e) there shall not have been or occurred any event which has
caused or may reasonably be expected to cause a Company Material
Adverse Effect;
(f) no legal proceedings shall have been instituted or threatened
or claim or demand made against the Company or the Purchaser seeking
to restrain or prohibit or to obtain substantial damages with respect
to the consummation of the transactions contemplated hereby, and there
shall not be in effect any order by a governmental body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby, and
(g) Purchaser shall have completed its due diligence
investigation of Company and have satisfied itself that the Merger is
in the best interests of the Purchaser and its shareholders.
6.2 Conditions Precedent to Obligations of the Company.
The obligations of the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, prior
to or on the Effective Date, of each of the following conditions (any
or all of which may be waived by the Company in whole or in part to the
extent permitted by applicable law):
(a) all representations and warranties of the Purchaser contained
herein qualified as to materiality shall be true and correct in all
material respects , and all representations and warranties of the
Purchaser contained herein not qualified as to materiality shall be
true and correct, at and as of the Effective Date with the same effect
as though those representations and warranties had been made again at
and as of that date (except for those representations and warranties
which speak as of a specific date, which shall be true and correct as
of such date);
(b) the Purchaser shall have performed and complied in all
material respects with all obligations and covenants required by this
Agreement to be performed or complied with by Purchaser on or prior to
the Effective Date;
(c) the Company shall have been furnished with certificates
(dated the Effective Date and in form and substance reasonably
satisfactory to the Company) executed by the President of the Purchaser
certifying as to the fulfillment of the conditions specified in
Sections 6.2(a) and 6.2(b);
(d) the Purchaser shall have obtained all consents and waivers
referred to in Section 3.6 hereof with respect to the transactions
contemplated by this Agreement;
(e) there shall not have been or occurred any event which has
caused or may reasonably be expected to cause a Purchaser Material
Adverse Effect;
(f) no legal proceedings shall have been instituted or threatened
or claim or demand made against the Purchaser, seeking to restrain or
prohibit or to obtain substantial damages with respect to the
consummation of the transactions contemplated hereby, and there shall
not be in effect any order by a governmental body of competent
jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby,
16
(g) Company's common stock shall have been authorized for
quotation on the OTCBB;
(h) Company shall have completed its due diligence investigation
of Purchaser and have satisfied itself that the Merger is in the best
interests of the Company and its shareholders.
Article VII
DOCUMENTS TO BE DELIVERED
7.1 Documents to be Delivered by the Company.
At the Closing, the Company shall deliver to the Purchaser the
following:
(a) the certificates referred to in Section 6.1(c) hereof;
(b) certificates of good standing with respect to the Company
issued by the Secretary of State of its state of incorporation; and
(c) such other documents as the Purchaser shall reasonably
request.
7.2 Documents to be Delivered by the Purchaser.
At the Closing, the Purchaser shall deliver to the Company the
following:
(a) the certificates referred to in Section 6.2(c) hereof;
(b) certificates of good standing with respect to the Purchaser
issued by the Secretary of State of its state of incorporation; and
(c) such other documents as the Company shall reasonably request.
Article VIII
TERMINATION; AMENDMENT AND WAIVER
8.1 Termination by Mutual Consent.
This Agreement may be terminated at any time prior to the Closing
by the mutual written consent of Company and Purchaser.
8.2 Termination by Either Party.
If any condition precedent to the Company's obligations hereunder
is not satisfied and such condition is not waived by the Company at or
prior to the Closing Date, or if any condition precedent to Purchaser's
obligations hereunder is not satisfied and such condition is not waived
by Purchaser at or prior to the Closing Date, the Company, or
Purchaser, as the case may be, may terminate this Agreement at their
option by written notice to the other party unless the terminating
party shall be in default of its obligations hereunder or unless the
failure of condition is the result of the material breach of this
Agreement by the party seeking to terminate. In the event that a
condition precedent to its obligations is not satisfied, nothing
contained herein shall be deemed to require any party to terminate
this Agreement, rather than to waive such condition precedent and
proceed with the transactions contemplated hereby or permit the other
party additional time to attempt to satisfy such condition precedent.
For purposes here, the Closing Date shall mean and be April 21st, 2006
or such other date as the parties may mutually agree.
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8.3 Amendment.
This Agreement may be amended or modified in whole or in part at
any time but only by an agreement in writing executed in the same
manner as this Agreement.
Article IX
MISCELLANEOUS
9.1 Payment of Sales, Use or Similar Taxes.
All sales, use, transfer, intangible, recordation, documentary
stamp or similar taxes or charges, of any nature whatsoever, applicable
to, or resulting from, the transactions contemplated by this Agreement
shall be borne by the Company.
9.2 Expenses.
Except as otherwise provided in this Agreement, the Company and
the Purchaser shall each bear its own expenses incurred in connection
with the negotiation and execution of this Agreement and each other
agreement, document and instrument contemplated by this Agreement and
the consummation of the transactions contemplated hereby and thereby.
9.3 Further Assurances.
The Company and the Purchaser each agrees to execute and deliver
such other documents or agreements and to take such other action as may
be reasonably necessary or desirable for the implementation of this
Agreement and the consummation of the transactions contemplated hereby
in a timely manner.
9.4 Binding Effect; Assignment.
This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
Nothing in this Agreement shall create or be deemed to create any third
party beneficiary rights in any person or entity not a party to this
Agreement except as provided below. No assignment of this Agreement or
of any rights or obligations hereunder may be made by either the
Company or the Purchaser (by operation of law or otherwise) without the
prior written consent of the other parties hereto and any attempted
assignment without the required consents shall be made.
9.5 Counterparts.
This Agreement may be executed in several counterparts, and all
so executed shall constitute one agreement, binding on each of the
parties, notwithstanding that all the parties are not signatory to the
original or the same counterpart. Telecopied, confirmed, signature
pages shall have the same legal and evidentiary effect as delivery of
manually executed signature pages.
9.6 No strict construction.
The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement will be construed as if drafted jointly by the parties, and
no presumption or burden of proof shall arise favoring or disfavoring
any person or entity by virtue of the authorship of any of the
provisions of this Agreement.
AMERICAN BUSINESS CORPORATION
By: /s/ Anthony Russo
-----------------------------
Anthony R. Russo, CEO & President
TELOMOLECULAR CORP.
By: /s/ Matthew Sarad
-----------------------------
Matthew A. Sarad, CEO
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EXHIBIT 3.3(c)--SERIES F PREFERRED STOCK.
The Series F Preferred Stock shall carry the following rights
and preferences:
1. Voting rights. Except as otherwise expressly provided herein
or by law, the holders of shares of Series F Preferred Stock shall be
entitled to vote on all matters and shall be entitled to that number of
votes equal to the largest number of whole shares of Common Stock into
which such holder's shares of Series F Preferred Stock could be
converted, pursuant to the provisions of Section 2 hereof, at the
record date for the determination of shareholders entitled to vote on
such matter or, if no such record date is established, at the date such
vote is taken or any written consent of shareholders is solicited.
Except as otherwise expressly provided herein or as expressly required
by law, the holders of shares of Series F Preferred Stock and Common
Stock shall vote together as a single class on all matters.
2. Conversion. Each share of Series F Preferred Stock may be
converted, at the option of the holder thereof, into shares of common
stock of the corporation, on the terms and conditions set forth below:
2A. Subject to the provisions for adjustment hereinafter set
forth, each share of the Series F Preferred Stock shall be convertible
at the option of the holder thereof, in the manner hereinafter set
forth, into 5,750 shares of common stock of the corporation.
2B. The number of shares of common stock into which each share of
the Series F Preferred Stock is convertible shall be appropriately
adjusted from time to time:
2B(1) In case the corporation shall at any time or from time to
time declare or pay any dividend on its common stock payable in its
common stock or effect a subdivision of the outstanding shares of its
common stock into a greater number of shares of common stock;
2B(2) In case the corporation at any time or from time to time
shall combine or consolidate the outstanding shares of its common stock
into a lesser number of shares of common stock.
2C. The record holder of any shares of Series F Preferred Stock
may exercise his option to convert such shares into shares of common
stock one-third on _____________ __, 2007, one-half on
______________ __, 2008, and the balance of such shares on
_______________ __, 2009 by surrendering for such purpose to the
corporation, at its principal office or at such other office or agency
maintained by the corporation for that purpose, a certificate or
certificates representing the shares of Series F Preferred Stock to be
converted accompanied by a written notice stating that such holder
elects to convert a specified whole number of such shares in accordance
with the provisions of this section and specifying the name or names in
which such holder wishes the certificate or certificates for shares of
common stock to be issued. In case such notice shall specify a name or
names other than that of such holder, such notice shall be accompanied
by payment of all transfer taxes payable upon the issuance of shares of
common stock in such name or names. As promptly as practicable, and in
any event within five business days after the surrender of such
certificates and the receipt of such notice relating thereto and, if
applicable, payment of transfer taxes, the corporation shall deliver
or cause to be delivered (a) certificates representing the number of
validly issued, fully paid, and nonassessable shares of common stock
of the corporation to which the holder of Series F Preferred Stock so
converted shal be entitled and (b) if less than the full number of
shares of Series F Preferred Stock evidenced by the surrendered
certificate or certificates are being converted, a new certificate or
19
certificates, of like tenor, for the number of shares evidenced by such
surrendered certificate or certificates less the number of shares
converted. Such conversions shall be deemed to have been made at the
close of business on the date of giving of such notice and of such
surrender of the certificate or certificates representing the shares
of Series F Preferred Stock to be converted so that the rights of the
holder thereof shall cease except for the right to receive common stock
of the corporation in accordance herewith, and the converting holder
shall be treated for all purposes as having become the record holder of
such common stock of the corporation at such time.
Notwithstanding the foregoing, the Series F Preferred Stock shall be
fully convertible upon a "change in control" of the corporation for
purposes of Item 5.01 of Form 8-K under the Securities Exchange Act of
1934, other than a change in control resulting from a transaction
reported on Form 8-K not more than 3 months after the creation of this
Series F Preferred Stock.
2D. In connection with the conversion of any shares of Series F
Preferred Stock, no fractions of shares of common stock shall be
issued, but the corporation shall pay a cash judgment in respect of
such fractional interest in an amount equal to the market value of such
fractional interest.
2E. At all times that Series F Preferred Stock is convertible as
provided above, the corporation shall reserve and keep available out of
its authorized common stock the full number of shares of common stock
of the corporation issuable upon the conversion of all outstanding
shares of the Series F Preferred Stock.
2F. If any capital reorganization or reclassification of the
capital stock of the Corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities
or assets with respect to or in exchange for Common Stock, then, as a
condition of such reorganization or reclassification, lawful and
adequate provisions shall be made whereby each holder of a share or
shares of Series F Preferred Stock shall thereupon have the right to
receive, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately
theretofore receivable upon the conversion of such share or shares of
Series F Preferred Stock, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a
number of outstanding shares of Common Stock equal to the number of
shares of such Common Stock immediately theretofore receivable upon
such conversion had such reorganization or reclassification not taken
place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of such holder to the end that the
provisions hereof shall thereafter be applicable, as nearly as may be,
in relation to any shares of stock, securities or assets thereafter
deliverable upon the exercise of such conversion rights.
2G. Definition of Common Stock. As used in this paragraph 2,
the term "Common Stock" shall mean and include the Corporation's
authorized Common Stock, $.001 par value per share, as constituted on
the date of filing of these terms of the Series F Preferred Stock and
the shares of Common Stock receivable upon conversion of shares of
Series F Preferred Stock shall include only shares designated as Common
Stock of the Corporation on the date of filing of this instrument, or
in case of any reorganization or reclassification of the outstanding
shares thereof, the stock, securities or assets provided for in
subparagraph 2F.
3. Liquidation. Upon any liquidation, dissolution or winding
up of the corporation, whether voluntary or involuntary, the holders of
shares of Series F Preferred Stock shall be entitled to be paid an
amount (the "Liquidation Payment") equal to such amount per share of
Series F Preferred Stock as would have been payable had each such share
been converted to common stock immediately prior to such event of
liquidation, dissolution or winding up,
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Whenever the distribution provided for in this Section shall be payable
in property other than cash, the value of such distribution shall be
the fair market value of such property as determined in good faith by
the Board of Directors of the Corporation.
4. Dividends. The holders of the Series F Preferred Stock shall
be entitled to receive, out of funds legally available therefor, when
and if declared by the Board of Directors, dividends equal to the
amount payable upon a share of Common Stock multiplied by 5,750.
5. Protective Provisions. As long as any shares of Series F
Preferred Stock shall be outstanding, (i) the holders of the Series F
Preferred Stock shall have the right and option to designate and vote
(and remove and replace) as a class with respect to one member of the
corporation's Board of Directors, and (ii) the terms of the Series F
Preferred Stock shall not be amended without the consent of the holders
of not less than a majority of the outstanding Series F Preferred
Stock, and (iii) the Common Stock shall not be subject of a reverse
split or any other reorganization or reclassification which shall have
the effect of reducing the number of outstanding shares of Common Stock
without the consent of the holders of not less than a majority of the
outstanding Series F Preferred Stock.
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