REORGANIZATION AGREEMENT
This Reorganization Agreement ("Agreement") is made and entered into this
5th day of April, 1999, between and among eNote.Com, Inc., a Delaware
corporation formerly known as Webcor Electronics Inc. (the "Company"), Navis
Technologies, Ltd., a Delaware corporation, ("Navis") and the persons identified
in Exhibit "A" (the "Shareholders").
WHEREAS, the Shareholders own, and have the unrestricted right to sell,
transfer and convey, one hundred percent (100%) of the issued and outstanding
common stock of Navis (the "Securities"); and
WHEREAS, the Company wishes to acquire the Securities, solely in
exchange for Company Securities; and
WHEREAS, immediately after the closing of this Agreement the Company
intends to enter into a Purchase and Sale Agreement with Friedlander
International Limited, a copy of which is attached hereto as Exhibit "B" and
incorporated herein by this reference, pursuant to which Friedlander
International will purchase 5,000,000 shares of preferred stock and 2,000,000
common stock purchase warrants for an aggregate consideration of $5,000,000; and
WHEREAS, the Company's Shareholders previously approved, subject only to
the closing of this Reorganization Agreement, a reverse stock split which has
positioned the Company to complete the transactions contemplated by this
Agreement; and
WHEREAS, the shareholders of the Company have previously approved, subject
only to the closing of this Reorganization Agreement, a change in the name of
the Company to eNote.Com, Inc.
NOW, THEREFORE, in consideration of the mutual covenants, obligations and
benefits hereinafter set forth, the parties hereto agree as follows:
1. REPRESENTATIONS AND WARRANTIES BY NAVIS AND ITS' SHAREHOLDERS. Navis and
its Shareholders jointly and severally represent and warrant to the Company:
a. Organization and Qualification; Subsidiaries. Navis is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, has all requisite corporate or other power and authority to
own, lease and operate its properties and to carry on its business as it is now
being conducted, and is duly qualified and in good standing to do business in
the State of Vermont and each other jurisdiction in which the nature of the
business conducted by it or the ownership or leasing of its properties makes
such qualification necessary. Navis has no directly or indirectly owned
subsidiaries other than eNote Communications, Inc., a newly formed Delaware
corporation that has no assets, liabilities or business activities.
b. Articles of Incorporation and By-Laws. Navis has heretofore furnished to
the Company complete and correct copies of its' Articles of Incorporation and
By-Laws, including all amendments thereto or restatements thereof. Navis is not
in violation of any of the provisions of its Articles of Incorporation, By-Laws.
All original documents and other information relating to Navis' affairs has
been made available to all parties to the transactions contemplated hereby.
Included within the documents made available have been at least the Articles of
Incorporation and any Amendments, By-laws and any amendments thereto, Minutes of
all of the meetings of the Incorporators, Directors and Shareholders, all
financial statements and copies of all contracts, leases, patents, copyrights,
licenses, trademarks or agreements to which Navis is a party or in which Navis
has an interest.
c. Capitalization. The authorized capital stock of Navis consists of 1,000
shares of common stock, $0.01 par value ("Navis Common"). As of the date hereof
536 shares of Navis Common are issued and outstanding, all of the issued and
outstanding shares of Navis Common are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
Navis' Articles of Incorporation or By-Laws or any agreement to which Navis is a
party or bound. There are no bonds, debentures, notes or other indebtedness
issued or outstanding having the right to vote on any matters on which Navis'
Shareholders may vote. All holders of outstanding Navis Common are identified in
Schedule A-1 to this Agreement and there are no options, warrants, calls or
other rights, agreements, arrangements or commitments presently outstanding
obligating Navis to issue, deliver or sell shares of its capital stock or debt
securities, or obligating Navis to grant, extend or enter into any such option,
warrant, call or other such right, agreement, arrangement or commitment.
Schedule A-1 sets forth a true and complete list of all holders of Navis Common,
showing for each holder the number of shares of Navis Common owned by such
holder as of the date hereof.
In addition to the Navis Common, Navis has previously sold $810,147
aggregate principal amount of Debentures ("Navis Debentures"). The Navis
Debentures are held by the holders of Navis Debentures ("Debentureholders")
identified in Schedule A-1 and immediately prior to the closing of the
transactions contemplated hereby, the holders of $400,000 aggregate principal
amount of Debentures intend to convert the Navis Debentures held by them into
400,000 shares of Navis Common. Immediately after the closing of this Agreement,
the Company intends to repay $410,147 aggregate principal amount of Navis
Debentures, together with accrued interest thereon, in full and final
satisfaction of the rights of the holders of such Navis Debentures.
All outstanding Navis Securities and Navis Debentures are duly authorized,
validly issued, fully paid and nonassessable and are owned by the Shareholders
and Debentureholders specified in Schedule A-1 free and clear of any security
interests, liens, claims, pledges, agreements, limitations on voting rights,
charges or other encumbrances of any nature whatsoever ("Encumbrances").
d. Authority. Navis has all requisite corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated herein. The execution and delivery of
this Agreement and the consummation of the transactions contemplated herein have
been duly authorized by all necessary corporate action and no other corporate
proceeding on the part of Navis is necessary to authorize this Agreement or to
consummate the transactions contemplated herein. This Agreement has been duly
executed and delivered by Navis and, assuming the due authorization, execution
and delivery thereof by the Company, constitutes the legal, valid and binding
obligation of Navis enforceable in accordance with its terms.
e. No Conflict; Required Filings and Consent. The execution and delivery of
this Agreement by Navis does not, and the performance of this Agreement by Navis
will not (i) conflict with or violate the Articles of Incorporation or By-Laws
of Navis, (ii) conflict with or violate any federal, state, or local law,
statute, ordinance, rule, regulation, order, judgment or decree (collectively,
"Laws") in effect as of the date of this Agreement and applicable to Navis or by
which its properties are bound or subject, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or require payment under, or result
in the creation of an Encumbrance on, any of the properties or assets of Navis
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Navis is a
party or by which Navis or its properties are bound or subject except for
breaches, defaults, events, rights of termination, amendment, acceleration or
cancellation, payment obligations or liens or Encumbrances that would not have a
material adverse effect on the business, properties, assets, condition
(financial or otherwise) operations or prospects of Navis, taken as a whole
("Navis Material Adverse Effect").
The execution and delivery of this Agreement by Navis does not, and the
performance of this Agreement by Navis will not, require Navis to obtain any
consent, approval, authorization or permit of, or to make any filing with or
notification to, any governmental or regulatory authority ("Governmental
Entities") based on laws, rules, regulations and other requirements of
Governmental Entities in effect as of the date of this Agreement, except for
applicable requirements, if any, of (i) federal or state securities laws and the
filing and recordation of certain corporate documents as required by applicable
State law and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
either individually or in the aggregate, prevent Navis from performing its
obligations under this Agreement or have a Navis Material Adverse Effect.
f. Permits; Compliance. Navis is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances, exemptions, consents,
certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted
(collectively, the "Navis Permits"), and there is no action, proceeding or
investigation pending or, to the knowledge of Navis, threatened, regarding
suspension or cancellation of any of Navis Permits. Navis is not in conflict
with, or in default or violation of (a) any Law applicable to Navis or by which
any of its properties is bound or subject or (b) any of the Navis Permits,
except for any such conflicts, defaults or violations which would not have a
Navis Material Adverse Effect.
g. Financial Statements. Attached hereto as Exhibit "C", the text of which
is hereby incorporated herein by reference, are the audited financial statements
of Navis as of December 31, 1998 containing the balance sheet of Navis and the
related statements of operations, cash flows and shareholders' equity for the
period then ended, together with unaudited interim financial statements for the
period ended March 31, 1999 (the "Navis Financial Statements"). The Navis
Financial Statements have been prepared in accordance with generally accepted
accounting principles and practices consistently followed by Navis throughout
the period indicated, and fairly present the consolidated financial position of
Navis as of the date thereof. Except as described in the notes to the Navis
Financial Statements, Navis has not
(1) issued any shares of its capital stock, or any options or rights to
acquire such securities, to any person other than the persons listed in
Schedule A-1;
(2) paid or declared any dividends or distributions of capital, surplus, or
profits with respect to any of its issued and outstanding shares of capital
stock;
(3) paid or agreed to pay any consideration in redemption of any of its
issued and outstanding capital stock; or
(4) entered into any other transaction or agreement which would, or might,
materially impair its shareholders' equity as reflected in such financial
statements.
h. No Undisclosed Liabilities. There are no liabilities of Navis of any
kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability,
other than liabilities fully reflected or reserved against on the Navis
Financial Statements; and liabilities which, individually or in the aggregate,
would not have a Navis Material Adverse Effect.
i. Absence of Certain Changes or Events. Except as and to the extent
disclosed herein since March 31, 1999, there has not been any significant change
by Navis in its accounting methods, principles or practices or any circumstance
which would constitute a Navis Material Adverse Effect.
j. Absence of Litigation. There is no claim, action, suit, litigation,
proceeding, arbitration or investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or
threatened against Navis or any properties or rights of Navis and Navis is not
subject to any continuing order of, consent decree, settlement agreement or
other similar written agreement with, or continuing investigation by, any
Governmental Entity, or any judgment, order, writ, injunction, decree or award
of any Governmental Entity or arbitrator, including, without limitation,
cease-and-desist or other orders.
k. Taxes. Navis has filed all federal, state and local tax returns required
by law, or has filed proper extensions, and has paid all Taxes, assessments and
penalties due and payable. The provisions for Taxes, if any, reflected in the
most recent balance sheet included in the Navis Financial Statements are
adequate for any and all federal, state, county and local taxes for the period
ending on the date of that balance sheet and for all prior periods, whether or
not disputed. There are no present disputes as to Taxes of any nature payable by
Navis or any Subsidiary.
l. Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated in this Agreement based upon arrangements made by or
on behalf of Navis except for fees consisting of an 650,000 shares of the
Company's common stock that will be issued to certain financial consultants and
other professionals as payment for services rendered in connection with the
transaction contemplated hereby.
m. Navis Corporate Action. The Board of Directors of Navis has by the
unanimous vote of all directors present (a) determined that the transaction
contemplated hereby is advisable and fair and in the best interests of Navis and
its Shareholders, (b) approved the transaction contemplated hereby in accordance
with the applicable provisions of the General Corporation Law of Delaware, (c)
recommended the approval of this Agreement by the Shareholders and (d) obtained
the unanimous approval of all holders of Navis Securities, of a resolution
approving the transactions contemplated in this Agreement.
n. Environmental Laws and Regulations. (a) Navis is in material compliance
with all applicable federal, state and local laws and regulations and common law
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata (collectively, "Environmental Laws")), which
compliance includes, but is not limited to, the possession by Navis of all
material permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof and
compliance with notification, reporting and registration provisions under
applicable Environmental Laws; Navis has not received notice of, or, to the
knowledge of Navis, is the subject of, any action, cause of action, claim,
investigation, demand or notice by any person or entity alleging liability under
or noncompliance with any Environmental Law ("Environmental Claim"); and to the
knowledge of Navis, there are no circumstances that are reasonably likely to
prevent or interfere with such material compliance in the future, or to require
material expenditures to maintain such material compliance in the future.
There are no Environmental Claims that are pending or, to the knowledge of
Navis, threatened against Navis, or, to the knowledge of Navis, against any
person or entity whose liability for any Environmental Claim Navis has or may
have retained or assumed either contractually or by operation of law.
To the knowledge of Navis, there are no circumstances that could form the
basis for an Environmental Claim against Navis, or against any person or entity
whose liability for any Environmental Claim Navis or any Subsidiary has or may
have retained or assumed either contractually or by operation of law.
o. Intellectual Property Rights. Navis has good and marketable title to all
patents, know-how, trade secrets, trademarks and other intellectual properties
required for the development and commercialization of the TVe-mail system as
described in the Confidential Business Plan of eNote Communications Inc. dated
February 1999, a copy of which is attached hereto as Exhibit "D" and
incorporated herein by this reference. Such intellectual properties are free and
clear of all liens, charges, encumbrances, or restrictions, however
characterized. All of the contracts, leases, subleases, patents, copyrights,
licenses and agreements, however characterized, under which Navis holds such
intellectual properties are in full force and effect. Navis is not in default
under any of the material terms or provisions of any contracts, leases,
subleases, patents, copyrights, licenses or agreements under which Navis holds
its intellectual properties. There are no known claims against Navis concerning
its rights under the leases, subleases, patents, copyrights, licenses and
agreements and concerning its right to continued possession of the intellectual
properties.
p. Survival of Representations and Warranties. All of the representations
and warranties set forth above are true as of the date of this Agreement, shall
be true at the Closing Date and shall survive the closing for a period of three
(3) years from the Closing Date.
2. Affirmative Covenants.
(a) SEC Reporting Obligations. For so long as the Company's common stock is
registered under the Securities Exchange Act of 1934, as amended (said Act and
rules and regulations promulgated thereunder being hereinafter referred to as
the "Exchange Act")., the Company (i) will file all forms, reports, statements
and other documents required to be filed with (A) the Securities and Exchange
Commission ("SEC"), including, without limitation (1) all Annual Reports on Form
10-KSB, (2) all Quarterly Reports on Form 10-QSB, (3) all proxy statements
relating to meetings of stockholders (whether annual or special), (4) all
Reports on Form 8-K, (5) all other reports or registration statements and (6)
all amendments and supplements to all such reports and registration statements
and (B) any state, local or other governmental authority pursuant to applicable
laws regulating the offer and sale of securities (the "Blue Sky Laws") and (C)
all forms, reports, statements and other documents required to be filed with any
other applicable federal or state regulatory authorities. The Company Reports
shall be prepared in all material respects in accordance with the requirements
of applicable Law (including, the Securities Act and Exchange Act, as the case
may be, and the rules and regulations of the SEC thereunder applicable to such
Company Reports) and shall not at the time they are filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading.
(b) Reports to Stockholders. For so long as the Company's common stock is
registered under the Exchange Act, the Company will hold an annual meeting of
shareholders for the election of directors within 180 days after the end of each
of the Company's fiscal years and, within 180 days after the end of each of the
Company's fiscal years, will provide the Company's shareholders with the audited
financial statements of the Company as of the end of the fiscal year just
completed prior thereto. Such financial statements shall be those required by
Rule 14a-3 under the Exchange Act and shall be included in an annual report
meeting the requirements of the Rule. Further, the Company agrees to make
available to the Company's shareholders in printable form within 60 days after
the end of each fiscal quarter of the Company (other than the last fiscal
quarter in any fiscal year) reasonably itemized financial statements of the
Company and its subsidiaries, if any, for the fiscal quarter just ended and a
narrative discussion of such financial statements and the business conducted by
the Company and its subsidiaries, if any, during such quarter.
3. REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDERS. The Shareholders
hereby jointly and severally warrant to the Company:
a. The Shareholders have full power and authority to exchange the Navis
Securities which are held by them upon the terms and conditions provided for in
this Agreement, and when delivered to the Company in accordance with the terms
of this agreement, the Navis Securities will be free and clear of any lien or
other encumbrance on the Closing Date specified herein.
b. The Shareholders are acquiring the Common Stock of the Company solely
for their own account, for investment, and not with a view to any subsequent
"distribution" thereof within the meaning of that term as defined in the
Securities Act of 1933, as amended (said Act and rules and regulations
promulgated thereunder being hereinafter referred to as the "Securities Act").
The Shareholders understand that the Common Stock of the Company has not been
registered under the Act or securities laws of any State ("State Act") by reason
of the specific exemptions therefrom, which exemptions depend in part upon the
Shareholders subjective investment intent as expressed herein. In furtherance of
the foregoing, each Shareholder shall be required to execute and deliver to the
Company an Investment Letter, in the form attached hereto as Exhibit "E," as a
condition precedent to the issuance of a certificate for the Common Stock of the
Company that will be issued to him.
c. The Shareholders hereby jointly acknowledge that they:
(1) are "Accredited Investors" as such term is defined in Regulation D
promulgated under the Act; and
(2) That they have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of the
proposed exchange of Navis's and eNote `s securities, respectively, for
Common Stock of the Company; and that they are able to bear the economic
risks of the investment and are able to protect their own interests in an
investment of this nature.
The Shareholders further represent and warrant that all of the representations
and warranties set forth above are true as of the date of this Agreement, shall
be true at the Closing Date and shall survive the closing for a period of three
(3) years from the Closing Date.
4. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company hereby
represents and warrants to Navis and the Shareholders:
a. Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, has all requisite corporate or other power and authority to own, lease
and operate its properties and to carry on its business as it is now being
conducted, and is duly qualified and in good standing to do business in each
jurisdiction in which the nature of the business conducted by it or the
ownership or leasing of its properties makes such qualification necessary. The
Company has no directly or indirectly owned subsidiaries.
b. Articles of Incorporation and By-Laws. The Company has heretofore
furnished to the Navis and the Shareholders complete and correct copies of its'
Articles of Incorporation and By-Laws, including all amendments thereto or
restatements thereof. The Company is not in violation of any of the provisions
of its Articles of Incorporation, By-Laws.
c. Capitalization. The Company has the corporate authority to issue a total
of 25,000,000 shares of $0.01 par value Common Stock and 5,000,000 shares of
$0.01 par value Preferred Stock, of which 3,439,247 shares are presently issued
and outstanding. The beneficial owners of such shares, as reflected on the
records of the Company, are identified in Exhibit "F" to this Agreement.
Prior to the closing of this Reorganization Agreement, the Company will
effect a reverse split of all issued and outstanding shares of the Common Stock
in the ratio of one (1) share of new Common Stock for each six and
three-quarters (6 3/4) shares presently outstanding; provided, however, that (a)
no fractional shares shall be issued and all calculations that would result in
the issuance of a fractional share shall be rounded up to the nearest whole
number and (b) no Shareholder who was the beneficial owner of at least 100
shares of old Common Stock shall receive fewer than 100 shares of new Common
Stock and all calculations that would result in the issuance of fewer than 100
shares of new Common Stock to such a Shareholder will be rounded up to 100
shares; so that immediately thereafter the Company will have approximately
540,000 shares of new Common Stock issued and outstanding, all of which are
fully paid, validly issued and nonassessable. Except as specifically provided
herein and in certain agreements between the parties and their respective legal
counsel, no other capital stock of the Company or any rights whatsoever to
purchase additional capital stock of the Company will be outstanding on the
Closing Date. Except as specifically provided herein, in agreements with legal
counsel, and in agreements with Friedlander International, no Shareholder of the
Company will have or obtain any registration rights with respect to any shares
of the Company's capital stock that are issued and outstanding on the Closing
Date.
Immediately after the completion of the reverse split described above, the
Company will issue a total of 540,000 shares of Common Stock to certain
individual designees of Capston Network Company of Clearwater, Florida
("Capston"), subject to the following forfeiture provisions:
(1) in the event that the reverse split results in the issuance of fewer
than 540,000 shares of Common Stock to the existing shareholders of
the Company, then Capston's designees shall be obligated to return
to the Company for cancellation an indeterminate number of shares of
Common Stock so that immediately after such surrender and
cancellation, the total number of shares issuable to Capston's
designees shall not exceed 100% of the number of shares of Common
Stock issued to the existing shareholders of the Company, and
(2) in the event that the reverse split set forth above results in the
issuance of more than 540,000 shares of Common Stock to the existing
shareholders of the Company, then Capston shall be obligated to
return to the Company for cancellation an indeterminate number of
shares so that immediately after such surrender and cancellation,
the total number of shares issued to Capston, legal counsel and the
holders of Common Stock shall not exceed 1,350,000 shares.
Immediately after the closing of this Agreement, the Company will have not
more than 10,000,000 shares of Common Stock issued and outstanding which will be
held beneficially and of record by the following classes of persons:
(1) 8,000,000 shares held by the Shareholders;
(2) 540,000 shares, more or less, which will be held by the original public
shareholders of the Company;
(3) 540,000 shares, more or less, which will be held by Capston or its
designees;
(4) 270,000 shares which will be held by legal counsel for the parties hereto;
and
(5) 650,000 shares which will be held by certain financial consultants and
other professionals who introduced Navis to the Company and assisted in the
negotiation and documentation of the transactions contemplated hereby.
d. Authority. Each of the Company, Capston and Sally A. Fonner has all
requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the transactions
contemplated herein. The execution and delivery of this Agreement and the
consummation of the transactions contemplated herein have been duly authorized
by all necessary corporate action and no other corporate proceeding on the part
of the Company (including, without limitation, any approval by the shareholders
of the Company of this Agreement or the transactions contemplated herein) is
necessary to authorize this Agreement or to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by the
Company, Capston and Sally A. Fonner and, assuming the due authorization,
execution and delivery hereof by Navis and the Shareholders, constitutes the
legal, valid and binding obligation of the Company enforceable in accordance
with its terms.
e. No Conflict; Required Filings and Consents. The execution and delivery
of this Agreement by the Company does not, and the performance of this Agreement
by the Company will not (i) conflict with or violate the Certificate of
Incorporation or By-Laws, as amended or restated, of the Company, (ii) conflict
with or violate any Laws in effect as of the date of this Agreement applicable
to the Company or by which any of its properties is bound, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or require payment
under, or result in the creation of a lien or Encumbrance on, any of the
properties or assets of the Company pursuant to, any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company is a party or by which the Company
or any of its properties is bound or subject except for breaches, defaults,
events, rights of termination, amendment, acceleration or cancellation, payment
obligations or liens or Encumbrances that would not have a material adverse
effect on the business, properties, assets, condition (financial or otherwise)
operations or prospects of the Company, taken as a whole, or on the transactions
herein contemplated ("Company Material Adverse Effect").
The execution and delivery of this Agreement by the Company and the
performance of this Agreement by the Company does not require the Company to
obtain any consent, approval, authorization or permit of, or to make any filing
with or notification to, any Governmental Entities, except for applicable
requirements, if any, of (i) the Securities Act, the Exchange Act, the Blue Sky
Laws, the National Association of Securities Dealers, and the filing and
recordation of appropriate such documents as required by General Corporation Law
of Delaware and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not,
either individually or in the aggregate, prevent the Company from performing its
obligations under this Agreement or have a Company Material Adverse Effect.
f. Permits; Compliance. The Company is in possession of all franchises,
grants, authorizations, licenses, permits, easements, variances, exemptions,
consents, certificates, approvals and orders necessary to own, lease and operate
its properties and to carry on its business as it is now being conducted
(collectively, the "Company Permits"), and there is no action, proceeding or
investigation pending or, to the knowledge of the Company, threatened, regarding
suspension or cancellation of any of the Company Permits. The Company is not in
conflict with, or in default or violation of (a) any Law applicable to the
Company or by which any of its properties is bound or subject or (b) any of the
Company Permits, except for any such conflicts, defaults or violations which
would not have a the Company Material Adverse Effect. The Company has not
received from any Governmental Entity any written notification with respect to
possible conflicts, defaults or violations of Laws.
g. Reports; Financial Statements. The Company filed a voluntary petition
under Chapter 11 of the Bankruptcy Act on February 1, 1989, in the U.S.
Bankruptcy Court for the Eastern District of New York (Brooklyn) (Case #
89-10328). On October 16, 1990, the Company's Chapter 11 case was voluntarily
converted to a case in Chapter 7 which subsequently closed on November 13, 1996.
As a result of the Bankruptcy, the Company was inactive and engaged in no
business activities until December 26, 1996, when its corporate charter was
restored. On December 31, 1996, the Company filed with the Securities and
Exchange Commission an omnibus Annual Report on Form 10-K for the fiscal years
ended March 31, 1988, through March 31, 1996, together with quarterly reports
for the periods ended June 30 and September 30, 1996. Since December 31, 1996,
the Company has filed (i) all forms, reports, statements and other documents
required to be filed with (A) the Securities and Exchange Commission ("SEC"),
including, without limitation (1) all Annual Reports on Form 10-KSB, (2) all
Quarterly Reports on Form 10-QSB, (3) all proxy statements relating to meetings
of stockholders (whether annual or special), (4) all Reports on Form 8-K, (5)
all other reports or registration statements and (6) all amendments and
supplements to all such reports and registration statements (collectively, the
"Company SEC Reports") and (B) any applicable Blue Sky Laws and (ii) all forms,
reports, statements and other documents required to be filed with any other
applicable federal or state regulatory authorities (all such forms, reports,
statements and other documents being referred to herein, collectively, as the
"Company Reports"). The Company Reports were prepared in all material respects
in accordance with the requirements of applicable Law (including, with respect
to the Company SEC Reports, the Securities Act and Exchange Act, as the case may
be, and the rules and regulations of the SEC thereunder applicable to such
Company SEC Reports) and did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
Each of the financial statements (including, in each case, any related
notes thereto) contained in the Company SEC Reports filed prior to or on the
date of this Agreement (i) have been prepared in accordance with, and complied
as to form with, the published rules and regulations of the SEC and generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein) and (ii) fairly present the
financial position of the Company as of the respective dates thereof and the
results of its operations and cash flows for the periods indicated.
The Company's auditors have issued no management letters in connection with
the Company's financial statements.
Attached hereto as Exhibit "G", the text of which is hereby incorporated
herein by reference, are the audited financial statements of the Company as of
December 31, 1998, containing the balance sheet of the Company and the related
statements of operations, cash flow and shareholders' equity for the period then
ended (the "Company Financial Statements"). To the best of the Company's
knowledge, the Company Financial Statements have been prepared in accordance
with generally accepted accounting principles and practices consistently
followed by the Company throughout the period indicated, and fairly present the
consolidated financial position of the Company as of the date thereof. Except as
described in the notes to the Company Financial Statements, the Company has not
(1) issued any shares of its capital stock, or any options or rights to
acquire such securities, to any person other than the persons listed in
Schedule A-2;
(2) paid or declared any dividends or distributions of capital, surplus, or
profits with respect to any of its issued and outstanding shares of capital
stock;
(3) paid or agreed to pay any consideration in redemption of any of its
issued and outstanding capital stock; or
(4) entered into any other transaction or agreement which would, or might,
materially impair its shareholders' equity as reflected in such financial
statements.
h. No Undisclosed Liabilities. There are no liabilities of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of circumstances
which could reasonably be expected to result in such a liability, other than (a)
liabilities fully reflected or reserved against on the balance sheet contained
in the Company's 1997 Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1998, or in the unaudited consolidated balance sheet contained in the
Quarterly Reports on Form 10-QSB for the fiscal quarters ended June 30,
September 30, or December 31, 1998; (b) liabilities under this Agreement and
fees and expenses related thereto; and (c) liabilities which, individually or in
the aggregate, would not have a Company Material Adverse Effect.
i. Absence of Certain Changes or Events. Except as disclosed in SEC Reports
filed prior to or on the date of this Agreement, there has not been any
significant change by the Company in its accounting methods, principles or
practices.
j. Absence of Litigation. There is no claim, action, suit, litigation,
proceeding, arbitration or investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or
threatened against the Company or any properties or rights of the Company and
the Company is not subject to any continuing order of, consent decree,
settlement agreement or other similar written agreement with, or continuing
investigation by, any Governmental Entity, or any judgment, order, writ,
injunction, decree or award of any Governmental Entity or arbitrator, including,
without limitation, cease and desist or other orders.
k. Taxes. The Company has filed all federal, state and local tax returns
required by law, or has filed proper extensions, and has paid all Taxes,
assessments and penalties due and payable. The provisions for Taxes, if any,
reflected in the most recent balance sheet included in the Company Financial
Statements are adequate for any and all federal, state, county and local taxes
for the period ending on the date of that balance sheet and for all prior
periods, whether or not disputed. There are no present disputes as to Taxes of
any nature payable by the Company.
l. Brokers. Except as specifically disclosed to Navis and the Shareholders,
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated in this
Agreement based upon arrangements made by or on behalf of the Company.
m. Company Corporate Action. The stockholders of the Company have approved
the transaction contemplated hereby in accordance with the applicable provisions
of the General Corporation Law of Delaware.
n. Environmental Laws and Regulations. The Company is in material
compliance with all applicable Environmental Laws, which compliance includes,
but is not limited to, the possession by the Company of all material permits and
other governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof and compliance with
notification, reporting and registration provisions under applicable
Environmental Laws; the Company has not received notice of, or, to the knowledge
of the Company, is the subject of any Environmental Claim; and to the knowledge
of the Company, there are no circumstances that are reasonably likely to prevent
or interfere with such material compliance in the future, or to require material
expenditures to maintain such material compliance in the future.
There are no Environmental Claims that are pending or, to the knowledge of
the Company, threatened against the Company or, to the knowledge of the Company,
against any person or entity whose liability for any Environmental Claim the
Company has or may have retained or assumed either contractually or by operation
of law.
To the knowledge of the Company, there are no circumstances that could form
the basis for an Environmental Claim against the Company, or against any person
or entity whose liability for any Environmental Claim the Company has or may
have retained or assumed either contractually or by operation of law.
o. Contract Rights. Except for this Agreement and the agreements
contemplated herein, the Company is not a party to or bound by any contract or
agreement, whether written or oral, including, without limitation, any contract
or agreement for employment, consulting or similar services, for capital
expenditures or the acquisition or construction of fixed assets, which
constitutes any note, bond, indenture or other evidence of indebtedness or
guaranty or security for indebtedness of others, for the sale of any asset, or
the grant of any right or option to purchase such asset, which constitutes a
lease, which purports to limit the freedom of the Company to compete in any line
of business or in any geographic area or to borrow money or incur indebtedness.
p. Employee Benefit Plans.
Except for its' 1997 Incentive Stock Plan, the Company does not have, and
has not had any employee benefit plan (including, without limitation, any
"employee benefit plan," as defined in Section 3(3) of the ERISA), or any bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock option, phantom stock, retirement, vacation,
severance, disability, death benefit, hospitalization, insurance or other plan,
arrangement or understanding (whether or not legally binding). No incentive
grants of any type or nature are outstanding under the Company's Incentive Stock
Plan and no person has any right to require the Company to issue any such
incentive grant in the future.
The Company is not party to any collective bargaining agreement.
The Company has no obligation for retiree health, medical or life
insurance benefits under any plan or arrangement. The Company has no
employees other than Sally A. Fonner.
q. Public Offering. The initial public offering of the Company was a bona
fide offering to the "public" as such term is used and defined in connection
with offerings of securities subject to the Securities Act in material
compliance with the Securities Act and the rules and regulations promulgated
thereunder. The Common Stock of the Company which was issued and outstanding
prior to the Closing Date of this Agreement has been (a) issued pursuant to a
valid claim of exemption under Section 4(2) of the Securities Act, (b) issued
pursuant to an effective registration statement under the Securities Act, or (c)
issued in violation of the applicable registration requirements of the
Securities Act, but at a date sufficiently remote from the Closing Date that
that purchasers of such shares are precluded from initiating or maintaining an
action in law or in equity based on the sale and issuance of such share
r. Transfer Agent. The Company has appointed American Stock Transfer &
Trust Company, New York, New York as the Company's transfer agent. The Company
will continue to retain a transfer agent reasonably satisfactory to Navis and
the Shareholders for so long as the Company is subject to the reporting
requirements under Section 12(g) or Section 15(d) of the Exchange Act. The
Company will make arrangements to have available at the office of the transfer
agent sufficient quantities of the Company's common stock certificates as may be
needed for the quick and efficient transfer of the Shares.
s. Survival of Representations and Warranties. All of the representations
and warranties set forth above are true as of the date of this Agreement, shall
be true at the Closing Date and shall survive the closing for a period of three
(3) years from the Closing Date.
5. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of the
Company hereunder shall be subject to the following conditions:
a. The Company shall not have discovered any material error, misstatement
or omission in any of the representations and warranties made by Navis or the
Shareholders herein and all the terms and conditions of this Agreement to be
performed and complied with have been performed and complied with.
b. There shall have been no material adverse changes in the financial
condition, business or operations of Navis taken as a whole from March 31, 1999
until the Closing Date, except for changes resulting from operations in the
usual and ordinary course of its business, and between such dates no business
and assets of Navis shall have been materially adversely affected as the result
of any fire, explosion, earthquake, flood, accident, strike, lockout,
combination of the workmen, condemnation of any assets by any governmental
authorities, riot, activities of armed forces, or Acts of God or of the public
enemies.
c. There shall have been no material adverse changes in the financial
condition, business or operations of Navis, except for immaterial changes
resulting from operations in the usual ordinary course of the business.
d. The Company shall have received the opinion of Doremus Associates, legal
counsel for Navis, to the effect that:
(1) Navis is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has the power and authority to own
its properties and to carry on its business in the State of Vermont as of
the Closing Date;
(2) The outstanding Navis Securities are validly issued, fully paid and
nonassessable;
(3) This Agreement has been duly executed and delivered by Navis and the
Shareholders and constitutes a legal, valid and binding obligation of Navis
and the Shareholders enforceable in accordance with its terms.
6. CONDITIONS TO THE OBLIGATIONS OF NAVIS AND THE SHAREHOLDERS. The
obligations of the Navis and the Shareholders hereunder are subject to the
following conditions:
a. Navis and the Shareholders shall not have discovered any material error
or misstatement in any of the representations and warranties made by the Company
herein and all the terms and conditions of this Agreement to be performed and
complied with by the Company have been performed and complied with.
b. There shall have been no material adverse changes in the financial
condition, business or operations of the Company, from December 31, 1998 until
the Closing Date, except for changes resulting from those operations in the
usual ordinary course of the business.
c. Navis and the Shareholders shall have received the opinion of John L.
Petersen, legal counsel for the Company, to the effect that:
(1) The Company is a corporation duly organized and validly existing under
the laws of the State of Delaware and has the power to own and operate its
properties wherever the same shall be located as of the Closing Date;
(2) The execution, delivery and performance of this Agreement by the
Company has been duly authorized by all necessary corporate action and
constitutes a legal, valid and binding obligation of the Company
enforceable in accordance with its terms;
(3 When delivered to the Shareholders, the Common Stock to be delivered to
the Shareholders pursuant to the terms of this Agreement will be validly
issued, fully paid and nonassessable;
(4) The Common Stock of the Company which was issued and outstanding prior
to the Closing Date of this Agreement has been (a) issued pursuant to a
valid claim of exemption under Section 4(2) of the Securities Act, (b)
issued pursuant to an effective registration statement under the Securities
Act, or (c) issued in violation of the applicable registration requirements
of the Securities Act, but at a date sufficiently remote from the Closing
Date that that purchasers of such shares are precluded from initiating or
maintaining an action in law or in equity based on the sale and issuance of
such shares;
(5) The transaction contemplated qualifies as a tax-free reorganization
under ss.368(a)(1)(B) of the Internal Revenue Code and related regulations
thereunder and the receipt of Company stock by the Shareholders at the
Closing will not give rise to a taxable event; and
(6) The Common Stock of the Company is fully registered under the Exchange
Act and the Company has, for the preceding 12 months, filed all reports
required to be filed under Sections 12 and 15 of the Exchange Act.
7. CLOSING DATE. The final closing of this Agreement shall take place in
New York, New York on April 5, 1999, or at such other reasonable time and place
as the parties hereto shall agree upon.
8. EXCHANGE OF SECURITIES. Subject to the terms and conditions set forth
herein, and at the time of the closing set forth in Section 7 and the conditions
to which are specified in Sections 5 and 6, the Company will issue and deliver
to the Shareholders share certificates evidencing the ownership of a total of
8,000,000 shares of the Company's Common Stock as specified in Schedule A-3.
Concurrently therewith the Shareholders shall deliver to the Company
certificates evidencing the ownership of all issued and outstanding Navis
Securities, duly endorsed to the Company.
9. ISSUANCE OF SECURITIES. At or subsequent to the Closing, the Company
will issue and deliver share certificates evidencing the ownership of the
Company's Common Stock in the following amounts to the following parties:
a. 540,000 Company's Common Shares to Ms. Sally Fonner as compensation for
Ms. Fonner's services rendered in connection with the Company and the
transaction contemplated by this Agreement. Such shares shall be registered
under the Securities Act prior to issuance.
b. 650,0000 Company's Common Shares to be issued in lieu of a Finder's Fee.
Such shares shall be registered under the Securities Act prior to issuance.
Notwithstanding the foregoing, no finder's fees will be paid to Capston, Sally
A. Fonner or any of their respective employees, agents or affiliates without the
prior consent of the Shareholders.
c. 270,0000 Company's Common Shares to be issued to legal counsel for the
parties as compensation for services rendered in connection with the transaction
contemplated hereby. Such shares shall be registered under the Securities Act
prior to issuance. Notwithstanding the foregoing, no finder's fees will be paid
to Capston, Sally A. Fonner or any of their respective employees, agents or
affiliates without the prior consent of the Shareholders.
10. ACTIONS AT THE CLOSING. At the final closing of this Agreement, the
Company and the Shareholders will each deliver, or cause to be delivered to the
other, the shares of stock to be exchanged in accordance with Section 8 of this
Agreement and each party shall pay any and all federal and state taxes required
to be paid in connection with the issuance and the delivery of their own
securities. All stock certificates shall be in the name of the party to which
the same are deliverable, as specified herein. In addition to the
above-mentioned exchange of certificates, the following transactions will take
place at the final closing.
Navis and the Shareholders will deliver to the Company:
(1) The opinion of Doremus Associates legal counsel for Navis, as provided for
in Section 5(d) hereof;
(2) A certificate of corporate good standing for Navis from the Secretary of
State of the State of Delaware which shall be dated no more than sixty (60)
days prior to the Closing Date;
(3) A certificate of corporate good standing for eNote from the Delaware
Secretary of State which shall be dated no more than sixty (60) days prior
to the Closing Date;
(4) A certificate by a principal officer of each of Navis that each of the
representations and warranties of Navis and the Shareholders, respectively,
are true and correct as of the Closing Date and that all of the conditions
to the obligations of the Company which are to be performed by Navis and
the Shareholders have been performed as of the Closing Date.
The Company will deliver to Navis and the Shareholders:
(1) Duly certified copies of corporate resolutions and other corporate
proceedings taken by the Company to authorize the execution, delivery and
performance of this Agreement;
(2) The opinion of John L. Petersen, legal counsel for the Company, as
provided for in Section 6(c) hereof;
(3) A certificate executed by a principal officer of the Company attesting
that the foregoing representations and warranties of the Company are true
and correct as of the Closing Date and that all of the conditions to the
obligations of the Shareholders which are to be performed by the Company
have been performed as of the Closing Date;
(4) A certificate of corporate good standing for the Company from the
Delaware Secretary of State which shall be dated no more than 60 days prior
to the Closing Date; and
(5) Duly executed resignations of all existing officers and directors of
the Company, effective as of 8:00 a.m. on the Closing Date.
11. CONDUCT OF BUSINESS. Between the date hereof and the Closing Date, the
Company, Navis shall conduct its business in the same manner in which it has
heretofore been conducted and the Shareholders will not permit Navis to (1)
enter into any contract, other than in the ordinary course of business, or (2)
declare or make any distribution in the nature of a dividend or return of
capital to the Shareholders without first obtaining the written consent of the
Company. Likewise, the Company will not (1) enter into any contract, other than
in the ordinary course of business, or (2) declare or make any distribution in
the nature of a dividend or return of capital to its shareholders without first
obtaining the written consent of the Shareholders.
12. BOARD OF DIRECTORS. Promptly after compliance with Section 14(f) of the
Exchange Act, the Board of Directors of the Company shall have a meeting, at
which all of the present directors of the Company shall resign, and they shall
elect as members of the Company's Board of Directors, in accordance with the
By-Laws of the Company and the Purchase and Sale Agreement, such individuals as
the Shareholders shall designate to the Company in writing.
13. FUTURE REGISTRATION OF COMMON STOCK. The Shareholders understand that
because the Common Stock has not been registered under the Act or any state Act,
they must hold the Common Stock indefinitely, and cannot dispose of any or all
of the Common Stock unless such Common Stock is subsequently registered under
the Act and any applicable State Act, or exemptions from registration are
available. The Shareholders acknowledge and understand that they have no
independent right to require the Company to register the shares of Common Stock.
The Shareholders further understand that the Company may, as a condition to the
transfer of any of Common Stock, require that the request for transfer by a
Shareholder be accompanied by an opinion of counsel, in form and substance
satisfactory to the Company, provided at such Shareholder's expense, to the
effect that the proposed transfer does not result in violation of the Act or any
applicable State Act, unless such transfer is covered by an effective
registration statement under the Act and is in compliance with all applicable
State Acts.
14. TRANSFERABILITY. All certificates for shares of Common Stock which are
issued to the Shareholders pursuant to the terms of this Agreement shall be
restricted securities within the meaning of Regulation D promulgated under
Section 4(2) of the Securities Act. The Company shall issue stop transfer
instructions to the transfer agent for its Common Stock with respect to the of
Common Stock and shall place the following legend on the certificates
representing such of Common Stock:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED PURSUANT TO
A TRANSACTION EFFECTED IN RELIANCE UPON AN EXEMPTION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), AND HAVE NOT BEEN THE SUBJECT TO A
REGISTRATION STATEMENT UNDER THE ACT OR ANY STATE SECURITIES ACT. THE
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR APPLICABLE EXEMPTION THEREFROM UNDER THE ACT OR ANY
APPLICABLE STATE SECURITIES ACT."
15. ACCESS TO INFORMATION. Either previously or concurrently herewith, the
Company has delivered to the Shareholders correct and complete copies of all
documents and records requested by the Shareholders. In addition, the
Shareholders have had the opportunity to ask questions of, and receive answers
from, officers and directors of the Company, and persons acting on its behalf
concerning the terms and conditions of the Agreement, and has received
sufficient information relating to the Company to enable them to make an
informed decision with respect to the acquisition of the Common Stock.
16. NO SOLICITATION. At no time were the Shareholders presented with or
solicited by any leaflet, public promotion meeting, circular, newspaper or
magazine article, radio or television advertisement, or any other form of
general advertising in connection with its acquisition of the Common Stock.
17. EXPENSES. The Shareholders, Navis and the Company shall each pay their
respective expenses incident to this Agreement and the transactions contemplated
hereby, including all fees of their counsel and accountants, whether or not such
transactions shall be consummated; provided that Navis may pay the reasonable
fees and expenses of legal counsel for Capston and Friedlander International
Limited in connection with the Purchase and Sale Agreement and the proposed
transactions contemplated hereby, up to a maximum of Forty Thousand Dollars
($40,000). The Shareholders shall pay all other fees and expenses incurred by
them or by Navis by reason of this Agreement and the proposed transactions
contemplated hereby.
18. ATTORNEYS FEES. In the event of any litigation among the parties
related to this Agreement, the prevailing party shall be entitled to reasonable
attorneys fees and costs to be fixed by the Court, said fees to include appeal
and collection of judgment.
19. ARBITRATION. All disputes concerning this Agreement or the transactions
contemplated herein will be submitted to binding arbitration in New York, New
York, in accordance with the rules of the American Arbitration Association. The
decisions of the Arbitrator must be delivered in writing accompanied by written
findings of fact and conclusions of law. Any court of competent jurisdiction may
enter judgment upon the Arbitrator's awards. The prevailing party, as part of
its damages, shall be entitled to recover its reasonable attorneys fees and
expenses incurred in such arbitration from the losing party.
20. MISCELLANEOUS.
a. This Agreement shall be controlled, construed and enforced in accordance
with the laws of the State of Delaware without giving effect to conflict of laws
principles thereof.
b. This Agreement shall not be assignable by any party without prior
written consent of the others.
c. All Section headings herein are inserted for convenience only. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, which together shall constitute one and the same instrument.
Facsimile signatures shall constitute original signatures.
d. This Agreement incorporates the term of all prior agreements and sets
forth the entire understanding between the parties. No amendments hereto shall
be valid unless made in writing and signed by the parties hereto.
e. This Agreement shall be binding upon and shall inure to the benefit of
the heirs, executors, administrators and assigns of Navis and the Shareholders
and upon the successors and assigns of the Company.
f. All notices, requests, instructions, or other documents to be given
hereunder shall be in writing and sent by registered mail:
If to the Company or Navis: with copies to:
eNote.com, Inc. Peter Doremus, esq.
One Lawson Lane, Third Floor Doremus Associates
P.O. Box 388 112 Lake Street, Suite 3
Burlington, Vermont 05402 Burlington, Vermont 05401
Fax: (802) 862-1631 Fax: (802) 658-5675
If to the Shareholders: with copies to:
eNote.com, Inc. Peter Doremus, esq.
One Lawson Lane, Third Floor Doremus Associates
P.O. Box 388 112 Lake Street, Suite 3
Burlington, Vermont 05402 Burlington, Vermont 05401
Fax: (802) 862-1631 Fax: (802) 658-5675
If to Capston or Fonner: with copies to:
Capston Network Company John L. Petersen, esq.
1612 Osceola Chateau de Barbereche
Clearwater, Florida CH-1783 Barbereche Switzerland
Fax: (727) 443-5240 Fax: (4126) 684-0505
In addition, copies of all notices to any of the parties hereto shall be
sent to:
Milton Gleit, esq.
McCarthy, Fingar, Donovan, Drazen & Smith
11 Maritime Avenue, 12th Floor
White Plains, New York 10606
Fax: (914) 946-0134
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
eNote.com, Inc. Navis Technologies, Ltd..
Sally A. Fonner, President John A. Varsames, President
STOCKHOLDERS LISTED IN EXHIBIT A
John R. Varsarmes and
Heidi A. Varsames
Michael T. Grennan
James D. Richards
Peter D. Swift, M.D
Peter Stern, M.D.
Robert L. Jones
Lori Ann Varsames and
Kristen Varsames
By:
ADDENDUM NUMBER ONE
Paragraph 1(c) of that certain Reorganization Agreement between and among
eNote.Com, Inc., a Delaware corporation formerly known as Webcor Electronics
Inc. (the "Company"), Navis Technologies, Ltd., a Delaware corporation,
("Navis") and the persons identified in Exhibit "A" to the Reorganization
Agreement (the "Shareholders").is hereby amended to read in
its entirety as follows:
c. Capitalization. The authorized capital stock of Navis consists of 1,000
shares of common stock, $0.01 par value ("Navis Common"). As of the date hereof
536 shares of Navis Common are issued and outstanding, all of the issued and
outstanding shares of Navis Common are duly authorized, validly issued, fully
paid and nonassessable and not subject to preemptive rights created by statute,
Navis' Articles of Incorporation or By-Laws or any agreement to which Navis is a
party or bound. There are no bonds, debentures, notes or other indebtedness
issued or outstanding having the right to vote on any matters on which Navis'
Shareholders may vote. All holders of outstanding Navis Common are identified in
Schedule A-1 to this Agreement and there are no options, warrants, calls or
other rights, agreements, arrangements or commitments presently outstanding
obligating Navis to issue, deliver or sell shares of its capital stock or debt
securities, or obligating Navis to grant, extend or enter into any such option,
warrant, call or other such right, agreement, arrangement or commitment.
Schedule A-1 sets forth a true and complete list of all holders of Navis Common,
showing for each holder the number of shares of Navis Common owned by such
holder as of the date hereof.
In addition to the Navis Common, Navis has previously sold $810,147
aggregate principal amount of Debentures ("Navis Debentures"). The Navis
Debentures are held by the holders of Navis Debentures ("Debentureholders")
identified in Schedule A-1 and immediately prior to the closing of the
transactions contemplated hereby, the holders of $500,000 aggregate principal
amount of Debentures intend to convert the Navis Debentures held by them into
500,000 shares of Navis Common. Immediately after the closing of this Agreement,
the Company intends to repay $310,147 aggregate principal amount of Navis
Debentures, together with $58,325 of accrued interest, in full and final
satisfaction of the rights of the holders of such Navis Debentures.
All outstanding Navis Securities and Navis Debentures are duly authorized,
validly issued, fully paid and nonassessable and are owned by the Shareholders
and Debentureholders specified in Schedule A-1 free and clear of any security
interests, liens, claims, pledges, agreements, limitations on voting rights,
charges or other encumbrances of any nature whatsoever ("Encumbrances").
IN WITNESS WHEREOF, the parties hereto have duly executed this Addendum
Number One as of the day and year first above written.
eNote.com, Inc. Navis Technologies, Ltd..
Sally A. Fonner, President John A. Varsames, President
STOCKHOLDERS LISTED IN EXHIBIT A
John R. Varsarmes and
Heidi A. Varsames
Michael T. Grennan
James D. Richards
Peter D. Swift, M.D
Peter Stern, M.D.
Robert L. Jones
Lori Ann Varsames and
Kristen Varsames
By: