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
Date of Report (Date of earliest event reported)
August 2, 1999
MCY.com, Inc.
(Formerly Health Builders International, Inc.)
Delaware
(State or other jurisdiction of incorporation)
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333-9809 87-0561634
(Commission file number) (IRS employer identification no.)
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307 7th Avenue, 23rd Floor
New York, NY 10001
(Address of principal executive offices) (Zip Code)
(212) 620-3999
(Registrants telephone number, including area code)
Health Builders International, Inc.
2077 Elderberry Way
Sandy, Utah 84092
(former name and address of registrant)
<PAGE>
Item 1. Change in Control of Registrant.
Health Builders International, Inc. (the "Registrant" or the "Company") was
originally organized under the laws of the State of Delaware on July 31, 1996.
The Registrant changed its name on August 2, 1999, to MCY.com, Inc. in
connection with the closing of a Merger and Plan of Reorganization by and among
the Company, a subsidiary of the Company and MCY Music World, Inc. ("MCY") (the
"Merger").
The Company had 2,305,500 shares of Common Stock issued and outstanding as
of its year ended December 31, 1998. However, effective August 2, 1999, the
Company effectuated a 2 for 1 forward split of its outstanding shares of Common
Stock and a shareholder contributed for cancellation certain shares resulting in
the Company having 4,610,000 shares of Common Stock issued and outstanding and
47,651,655 shares of Common Stock and 1,000,000 shares of Series 1 Preferred
Stock issued and outstanding immediately following the Merger, inclusive of an
aggregate of 43,041,655 shares of Common Stock and 1,000,000 shares of Series 1
Voting Preferred Stock (the "Preferred Stock") issued to the shareholders of MCY
in connection with the Merger. Each share of Series 1 Preferred Stock entitles
the holder thereof to 100 votes per share on all matters submitted to a vote of
the holders of Common Stock. Pursuant to the Merger, MCY became a wholly owned
subsidiary of the Company, and as a result, the Company, in effect, acquired all
of the assets of MCY.
Formed in 1999, MCY operates an Internet website offering an interactive
environment and virtual music store where music buyers will be able to purchase
digital music downloads (NETrax") or mail order CDs. In addition, it is intended
that music fans will be able to learn about their favorite artist or musical
genre, find out about new music releases and concert events and listen to and
watch live web broadcasts and exclusive artist interviews. MCY believes that it
is prepared to provide high-quality, high-speed digital distribution of music on
the Internet coupled with a distribution technology which ensures accurate and
comprehensive collection of royalties. MCY will distribute music online as
"NETrax", a proprietary enhanced and encrypted version of the "MP3" format,
which allows users to download and store on their computers 16- bit stereo music
tracks. The NETrax may then be played back later directly on the computers, or
in the near future on hand-held portable devices that MCY, together with its
partners, intends to market. The Company offers a music library stocked from a
broad range of independent record labels and recording labels and recording
artists and is actively negotiating with many additional labels and artists.
MCY is based in New York City and also has subsidiary operations in Berlin
and Los Angeles. The New York corporate headquarters is a 2,600 square foot
space located at 307 7th Avenue in New York City, leased at a rate
$2,883.33/month. There are 19 full-time employees working out of the New York
office, as well as several programming and creative staff working on a freelance
basis. In addition, New York is the center from which the activities of MCY's
Product Acquisition Team, a team of 18 freelance agents working to close
contracts with record labels on a commission basis, are coordinated. This office
space is considered inadequate for MCY's growing needs and MCY is currently
negotiating for new, larger office facilities in New York City.
<PAGE>
The Berlin office is comprised of approximately 3,500 square feet, and is
rented at 6,055 DM/month. A major portion of this space is devoted to the MCY
Digitization Factory, where digital audio files are created from standard media
such as CDs or digital audio tapes. There are 10 full-time employees, 2 interns
and several freelance staff working in Berlin. This space is expected to be
sufficient for the Berlin operations for the foreseeable future.
The Los Angeles operation is currently run by a full-time freelance
consultant/agent. In anticipation of growth in Los Angeles, MCY has incorporated
a California subsidiary, MCY West, Inc. ("MCY West"), which will be responsible
for industry relations, marketing and content acquisition in California. MCY
West has recently signed a lease on office space which would allow it to
significantly expand operations in Los Angeles and is currently in negotiation
with several potential employees.
MCY plans to expand its operations in the near future by adding staff in
New York, Berlin and Los Angeles and by leasing additional office space in New
York and Los Angeles. It is anticipated that staff will increase to roughly 35
within the next 2 to 3 months and could reach 70 by the end of 1999.
Upon the closing of the Merger the sole officer and director of the
Registrant resigned and new management was appointed. Directors are elected for
a period of one year and thereafter serve until the next annual meeting at which
their successors are duly selected by the stockholders. Officers and other
employees serve at the will of the Board Directors. The following table sets
forth the persons who serve as the directors and executive officers of the
Company.
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MCY.com, Inc.
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Name Position
Bernhard Fritsch Chairman of the Board, Chief Executive Officer,
President and Director
James Burger Treasurer
Lisa Short Secretary
Hubertus von Hesse Director
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Bernhard Fritsch, 37, has been Chairman of the Board, Chief Executive
Officer, President and a Director of MCY since its formation and of the Company
since August 2, 1999. Mr. Fritsch also served as President and Chief Executive
Officer of Datatek Services Limited from its formation in 1997 until June 1999.
In 1991, Mr. Fritsch founded Fritsch and Friends Mediagroup GmbH, a company
which functioned as a high-end audio post-production house and also maintained a
significant presence in multimedia content production , sales and distribution.
From 1989 to 1991, Mr. Fritsch served on the executive management team of Harman
International where he worked to develop and execute their digital equipment
marketing strategy. Prior to 1989, Mr. Fritsch worked on radio and television
audio productions in West Berlin. Mr. Fritsch received
<PAGE>
a Tonmeister Degree from the Technical University of Berlin. For the past six
years, Mr. Fritsch has been a guest lecturer in New York University's
graduate-level studies in Music Technologies.
James Burger, age 31, has been General Manager and Corporate Treasurer of
MCY since its formation and of the Company since August 2, 1999. Prior to
joining the Company, Mr. Burger spent 3 years in Europe with A.T. Kearney
Management Consultants, where he worked on several projects in the areas of
financial management, strategic planning, organizational redesign and
operations. From 1991 to 1993, Mr. Burger worked with a boutique consulting firm
in the Czech Republic, where he conducted enterprise valuations and helped small
and medium-sized enterprises develop strategic and financial plans for their
privatization. Mr. Burger holds an M.B.A. from the M.I.T. Sloan School of
management and a B.A. from Yale University.
Lisa Short has been the Secretary of MCY since its formation and of the
Company since August 2, 1999. Ms. Short joined the MCY management team in June
1997 as the first employee in the New York Office. Under her direction, MCY
operations were shifted from Berlin to the new headquarters in New York City.
Since the start up of the New York Office, Ms. Short has implemented strategic
partnerships and alliances, communications direction and strategy and has set-up
a public relation network for the company as it moves forward. In 1996, Ms.
Short served in a public relation role in organizing and overseeing radio spots,
promotional material distribution and sponsorship organization for a mid-sized
Salt Lake City-based production studio. Ms. Short holds a Bachelor of Arts
Degree in French and Spanish from the University of Oregon. She has also studied
in Switzerland, France and Spain.
Hubertus von Hesse was appointed a Director of MCY on June 16, 1999 and as
a Director of the Company since August 2, 1999. Mr. v. Hesse, a founding partner
of the law firm of Merleker and v. Hesse, advises in commercial, corporate and
real estate law. He has been advising MCY on legal matters since its
incorporation. After a two year training since 1979 at Hypovereinsbank AG/Munch
he studied law at Munich Ludwig-Maximilians-University and University of
Lausanne. He received his law degree from Munich LMU. Mr. v. Hesse passed the
First state exam in 1986 and the Second (final) in 1989. He was admitted to the
Bar in Berlin in 1990.
Upon the consummation of the Merger, the new Officers and Directors of the
Registrant as a group (4 persons) owned as a group 24,190,568 shares or 50.8% of
the Common Stock and 1,000,000 share of Preferred Stock, which in the aggregate,
represents a combined 84% of the outstanding voting securities of the
Registrant, exclusive of any options.
As a result of the Merger, the shareholders of MCY acquired control of the
Registrant. The source of consideration used by the shareholders of MCY for the
Merger with the Registrant were shares of common stock of MCY owned or held
beneficially prior to the Merger that were acquired by the Registrant upon
consummation of the Merger in exchange for the same number of similar securities
issued by the Registrant.
The Registrant is not aware of any arrangements, the operation of which may
at a subsequent date, result in a change in control of the Registrant.
<PAGE>
Item 2. Acquisition or Disposition of Assets.
See Item 1, above.
Item 5. Other Events
In connection with certain corporate actions approved by he Registrant's
Board of Directors and by written consent of shareholders owning in excess of a
majority of the Company's outstanding common stock, the following matters were
accomplished on or about August 2, 1999:
a) Pursuant to the Merger, a 2 for 1 forward stock split of all shares of
the Company's Common Stock issued and outstanding immediately prior to the
Merger. The forward split resulted in an increase in the outstanding shares of
common stock from 2,305,500 to 4,610,000 shares after cancellation of 500
pre-split shares.
b) Pursuant to the Merger, and upon the acquisition of all the outstanding
capital stock of MCY, MCY became a wholly-owned subsidiary of the Company. In
connection with the Merger, on the closing thereof the Company issued to the
shareholders of MCY 43,041,655 restricted shares of Common Stock and 1,000,000
shares of Series 1 Voting Preferred Stock.
c) An amendment and restatement of the Company's Certificate of
Incorporation was filed with the Delaware Secretary of State to (1) change its
name MCY.com, Inc. (2) increase its authorized common stock to 100,000,000
shares, $.001 par value, (3) increase its authorized blank check preferred stock
to 9,000,000 shares, $.001 par value, and (4) to authorize 1,000,000 shares of
Series 1 voting Preferred Stock, $.001 par value;
d) The resignation of L. Dee Hall as the sole officer and director of
the Company along with the election of Bernhard Fritsch and Hubertus von Hesse
to serve as Directors of the Company subsequent to the Merger;
e) The adoption of a 1999 Stock Option Plan and the grating of options
to purchase shares under such new Plan.
On August 9, 1999, the Company sold to investors a total of approximately
4,039,000 shares of its Common Stock for aggregate consideration of
approximately $24.5 Million ($6 per share). The Company realized net proceeds of
$22.6 Million, after expenses of the offering. The offering was managed by
Gruntal & Co., LLC, a New York based brokerage and investment banking firm.
On August 17, 1999, the Company sold an additional 2,071,833 shares of its
Common Stock to its investors through Gruntal & Co. at a price of $6 per share
realizing net proceeds of $11.4 Million, after costs and expenses of the
offering of approximately $1 Million. After taking into account the shares which
were sold in the second round of financing, the Company had issued an
outstanding 53,962,488 shares of Common Stock (1,410,000 of which may be
<PAGE>
deemed to be in the public float) and 1,000,000 shares of Series 1 Preferred
Stock. The shares of Series 1 Preferred Stock entitle the holder to 100 votes
per share and do not carry any liquidation, dividend or other rights or
preferences.
Item 7. Financial statements and Exhibits.
a) Financial Statements of Business Acquired.
The Registrant has decided to file reports as a small business issuer as
defined in Regulation S-B and accordingly will comply with the financial
statements requirements of item 310 of Regulation S-B. Required financial
statements of the Company, under Regulation S-B, will be filed by amendment
hereto within the applicable time periods permitted under Form 8-K and
Regulation S-B requirements.
b) Pro Forma Financial Information
to be filed by amendment.
c) Exhibits.
2.01 Agreement and Plan of Reorganization dated as of August
2, 1999, among Regristrant, a certain shareholder of
Registrant and MCY.com, Inc.
3(i).1 Amended Certificate of Incorporation of Registrant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCY.COM,INC.
By: _______________________________
Bernhard Fritsch, President
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
HEALTH BUILDERS INTERNATIONAL, INC.,
HBI SUB, INC.
AND
MCY MUSIC WORLD, INC.
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TABLE OF CONTENTS
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1. Plan of Reorganization..........................................................................1
2. Terms of Merger.................................................................................2
3. Delivery of Shares..............................................................................4
4. Representations of MCY..........................................................................5
5. Representations of HBI and Hall.................................................................6
6. Closing.........................................................................................9
7. Conditions Precedent to the Obligations
of MCY..........................................................................................9
8. Conditions Precedent to the Obligation of
HBI and HBI Sub................................................................................11
9. Indemnification................................................................................11
10. Nature and Survival of Representations.........................................................12
11. Documents at Closing...........................................................................12
12. Finder's Fees..................................................................................13
13. Miscellaneous..................................................................................13
Signature Page..............................................................................................15
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Exhibit A - Certificate of Merger
Exhibit B - MCY Shareholder Schedule
Exhibit C - Amended and Restated Certificate of Incorporation of HBI Exhibit D -
Investment Letter Exhibit E - Form of Warrant
(i)
<PAGE>
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (hereinafter the "Agreement") is
entered into effective as of this day of August, 1999, by and among Health
Builders International, Inc., a Delaware corporation (hereinafter "HBI"); HBI
Sub, Inc., a newly-formed Delaware corporation (hereinafter "HBI Sub"); L. Dee
Hall, the sole director of HBI and HBI Sub (hereinafter "Hall"); and MCY Music
World, Inc., a Delaware corporation (hereinafter "MCY").
RECITALS:
WHEREAS, HBI desires to acquire MCY as a wholly-owned subsidiary and to
issue shares of HBI common stock to the shareholders of MCY upon the terms and
conditions set forth herein. HBI Sub is a wholly-owned subsidiary corporation of
HBI which shall be merged into MCY, whereupon MCY shall be the surviving
corporation of said merger and shall become a wholly-owned subsidiary of HBI
(HBI Sub and MCY are sometimes collectively hereinafter referred to as the
"Constituent Corporations").
WHEREAS, the boards of directors of HBI and MCY, respectively, deem it
advisable and in the best interests of such corporations and their respective
shareholders that HBI Sub merge with and into MCY pursuant to this Agreement and
Certificate of Merger in the form attached hereto as Exhibit "A" and pursuant to
applicable provisions of law (such transaction hereafter referred to as the
"Merger").
WHEREAS, HBI Sub has an authorized capitalization consisting of 5,000
shares of no par value common stock, of which 1,000 shares shall be issued and
outstanding and owned by HBI as of the closing of the Merger; and MCY has an
authorized capitalization consisting of 50,000,000 shares of common stock, $.001
par value ("MCY Common Stock"), of which 43,851,655 shares are issued and
outstanding as of the date hereof, and 10,000,000 shares of Preferred Stock,
$.001 par value, 1,000,000 of which are issued and outstanding and are
designated as Series I Voting Preferred Stock (the "MCY Preferred Stock"). All
of said outstanding shares of MCY Common Stock and Preferred Stock, are owned by
the shareholders of MCY as set forth on the attached Exhibit "B" (hereafter "MCY
Shareholders").
NOW THEREFORE, for the mutual consideration set out herein, and other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
AGREEMENT
1. Plan of Reorganization. The parties hereto do hereby agree that HBI Sub
shall be merged with and into MCY upon the terms and conditions set forth
herein. It is the intention of the parties hereto that this transaction qualify
as a tax-free reorganization under Section 368(a)(2)(E) of the Internal Revenue
Code of 1986, as amended, and related sections thereunder.
2. Terms of Merger. In accordance with the provisions of this Agreement and
the requirements of applicable law, HBI Sub shall be merged with and into MCY as
of the Effective Date (the terms "Closing" and "Effective Date" are defined in
Section 6 hereof). MCY shall be the surviving corporation (hereinafter sometimes
the "Surviving Corporation") and the separate existence of HBI Sub shall cease
when the Merger shall become effective. Consummation of the Merger shall be upon
the following terms and subject to the following conditions:
(a) Corporate Existence.
(1) At the Effective Date, the Surviving Corporation shall
continue its corporate existence as a Delaware corporation and (i) it
shall thereupon and thereafter possess all rights, privileges, powers,
franchises and property (real, personal and mixed) of each of the
Constituent Corporations; (ii) all debts due to either of the
Constituent Corporations, on whatever account, all causes in action and
all other things belonging to either of the Constituent Corporations
shall be taken and deemed to be transferred to and shall be vested in
the Surviving Corporation by virtue of the Merger without further act
or deed; and (iii) all rights of creditors and all liens upon any
property of any of the Constituent Corporations shall be preserved
unimpaired, limited in lien to the property affected by such liens
immediately prior to the Effective Date, and all debts, liabilities and
duties of the Constituent Corporations shall thenceforth attach to the
Surviving Corporation.
<PAGE>
(2) At the Effective Date, (i) the Certificate of
Incorporation and the By-laws of the Surviving Corporation, as existing
immediately prior to the Effective Date, shall be and remain the
Certificate of Incorporation and By-Laws of the Surviving Corporation;
(ii) the members of the Board of Directors of the Surviving Corporation
holding office immediately prior to the Effective Date shall remain as
the members of the Board of Directors of the Surviving Corporation (if
on or after the Effective Date a vacancy exists on the Board of
Directors of the Surviving Corporation, such vacancy may thereafter be
filled in a manner provided by applicable law and the By-laws of the
Surviving Corporation); and (iii) until the Board of Directors of the
Surviving Corporation shall otherwise determine, all persons who hold
offices of the Surviving Corporation at the Effective Date shall
continue to hold the same offices of the Surviving Corporation.
(b) Pre-Merger Events and Recapitalizations.
(1) HBI shall have declared the effectiveness of a forward stock
split of its common stock (the "HBI Common Stock") so that it has
4,610,000 shares of HBI Common Stock outstanding immediately prior to
consummation of the Merger, not taking into consideration the shares
issued in the Merger.
(2) On the Closing Date, and immediately prior to filing the
Certificate of Merger, HBI shall file an Amendment and Restatement of
its Certificate of Incorporation with the Secretary of State of the
State of Delaware in substantially the form attached hereto as Exhibit
"C" effecting an amendment to its Certificate of Incorporation to (i)
change its corporate name to MCY.com, Inc., or a derivation thereof
(ii) authorize 20,000,000 shares of preferred stock with a par value
of $.0001 per share, to be issued in such series and with such rights
as determined by the board of directors, (iii) increase its authorized
shares of common stock from 50,000,000 to 150,000,000 shares ("HBI
Common Stock") $.0001 par value, and (iv) authorize 1,000,000 shares
of Series I Voting Preferred Stock, $.0001 par value, ("HBI Preferred
Stock") having the rights and preferences set forth in Exhibit "C".
(3) MCY shall have completed the acquisition of various assets
from Datatek Services Limited to the reasonable satisfaction of HBI
(the "Datatek Reorganization").
(c) Conversion of Securities.
As of the Effective Date and without any action on the part of
HBI, HBI Sub, MCY or the holders of any of the securities of any of these
corporations each of the following shall occur:
(1) Each share of MCY Common Stock issued and outstanding
immediately prior to the Effective Date shall be converted into one
share of HBI Common Stock up to a maximum aggregate amount of
43,241,655 shares of HBI Common Stock. Each share of MCY Preferred
Stock issued and outstanding immediately prior to the Effective Date
shall be converted into one share of HBI Preferred stock up to a
maximum aggregate amount of 1,000,000 shares of HBI Preferred Stock.
All such shares of MCY Common Stock and MCY Preferred Stock shall no
longer be outstanding and shall automatically be canceled and shall
cease to exist, and each certificate previously evidencing any such
shares shall thereafter represent the right to receive, upon the
surrender of such certificate in accordance with the provisions of
Section 3 hereof, certificates evidencing such number of shares of HBI
Common Stock and HBI Preferred Stock, respectively, into which such
shares of MCY Common Stock and MCY Preferred Stock were converted. The
holders of such certificates previously evidencing shares of MCY
Common and Preferred Stock outstanding immediately prior to the
Effective Date shall cease to have any rights with respect to such
shares of MCY Common and Preferred Stock except as otherwise provided
herein or by law;
<PAGE>
(2) Any shares of MCY Common or Preferred Stock held in the
treasury of MCY immediately prior to the Effective Date shall
automatically be canceled and extinguished without any conversion
thereof and no payment shall be made with respect thereto;
(3) Each share of capital stock of HBI Sub issued and outstanding
immediately prior to the Effective Date shall remain in existence as
one share of common stock of the Surviving Corporation, all of which
shall be owned by HBI;
(4) The 4,610,000 shares of HBI Common Stock previously issued
and outstanding immediately prior to the Merger will remain
outstanding so that after conversion of the MCY Common Stock, HBI
shall have no more than 47,851,655 shares of HBI Common Stock
outstanding.
(5) HBI acknowledges that MCY is currently contemplating a
private offering of MCY Common Stock pursuant to the Memorandum (as
defined herein) and that if shares are sold under said offering prior
to the Closing, the number of shares of HBI Common stock to be issued
in the Merger will be increased accordingly and shall be issued on a
one for one basis for said MCY shares. Furthermore, HBI agrees that it
shall issue such additional shares and options or warrants to acquire
shares of HBI Common Stock at Closing as required to satisfy all
obligations of MCY as described in the Memorandum. HBI further
acknowledges that there have been discussions with MCY regarding
additional financing pursuant to the sale of up to 700,000 shares of
either MCY or HBI Common Stock at $5.00 per share. HBI has no
responsibility to complete said financing but hereby agrees to issue
additional HBI Common Stock in connection with said financing if
required at Closing or thereafter as requested by MCY.
(d) Other Matters.
(1) There shall be no stock dividend, stock split,
recapitalization, or exchange of shares with respect to or rights
issued in respect of HBI's Common Stock after the date hereof and
there shall be no dividends paid on HBI's Common Stock after the date
hereof, in each case through and including the Effective Date.
(2) MCY shall have received all requisite director and
shareholder approval of all matters set forth herein and no
shareholder of MCY shall have exercised any dissenters rights under
applicable corporate law.
(3) At Closing, HBI shall adopt a Stock Option Plan as described
in the Memorandum and shall grant options under said plan as directed
by MCY.
(4) Prior to Closing, MCY shall have completed the Datatek
Reorganization as defined and discussed on page 3 (subject to changes
in the terms as disclosed in writing to HBI by MCY) of that certain
Private Placement Memorandum of MCY dated June 4, 1999 (the
"Memorandum"). The parties hereto acknowledge that MCY will not
receive audited financial statements from Datatek in connection with
the assets acquired by MCY in the Datatek Reorganization and there can
be no assurance that MCY will be able to obtain such audited financial
statements on a timely basis or at all. However, MCY represents that
after diligent inquiry it reasonably believes such audited financial
statements will be available on a timely basis. However, the parties
acknowledge that the failure to receive such financial statements on a
timely basis could result in HBI becoming delinquent in its SEC
filings and a resultant delisting of its common stock from trading on
the OTC Bulletin Board.
<PAGE>
(5) At Closing, HBI shall issue a Warrant to Datatek, in exchange
for Datatek's Warrant to acquire MCY shares, which will grant Datatek
the rights to acquire up top 2,000,000 shares of HBI Common Stock at
$5.00 per share over a term of five years. Such Warrant shall have one
demand and unlimited piggyback registration rights and shall be in
substantially the form attached hereto as Exhibit "E".
3. Delivery of Shares. On or as soon as practicable after the Effective
Date, MCY will use its best efforts to cause the MCY Shareholders to surrender
for cancellation certificates representing their shares of MCY Common Stock and
Preferred Stock, against delivery of certificates representing the shares of HBI
Common Stock and Preferred Stock for which the MCY shares are to be converted in
the Merger. Until surrendered and exchanged as herein provided, each outstanding
certificate which, prior to the Effective Date, represented an MCY stock
certificate shall be deemed for all corporate purposes to evidence ownership of
the same number of shares of HBI Common Stock or Preferred stock, as the case
may be, into which the MCY certificate shall have been so converted.
4. Representations of MCY. MCY hereby represents and warrants as follows,
which warranties and representations shall also be true as of the Effective
Date:
(a) Except as noted on Exhibit "B", the MCY Shareholders listed
on the attached Exhibit "B" are the sole owners of record and
beneficially of the issued and outstanding MCY Common Stock and MCY
Preferred Stock.
(b) The MCY Common Stock and Preferred Stock constitutes duly
authorized, validly issued shares of capital stock of MCY, fully paid
and nonassessable and are the only capital shares of MCY authorized or
outstanding.
(c) The MCY unaudited pro forma financial statements as of May
31, 1999, which have been delivered to HBI (hereinafter referred to as
the "MCY Financial Statements") are materially complete, accurate and
fairly present the financial condition of MCY as of the date thereof
and the results of its operations for the periods covered on a pro
forma basis giving effect to the Datatek Reorganization. There are no
material liabilities or obligations, either fixed or contingent, not
disclosed in the MCY Financial Statements or in any exhibit thereto or
notes thereto other than contracts or obligations in the ordinary
course of business; and no such contracts or obligations in the
ordinary course of business constitute liens or other liabilities
which materially alter the financial condition of MCY as reflected in
the MCY Financial Statements. MCY has or will have at Closing, good
title to all assets shown on the MCY Financial Statements subject only
to dispositions and other transactions in the ordinary course of
business, the disclosures set forth therein and liens and encumbrances
of record and subject to completing the Datatek Reorganization. The
MCY financial statement have been prepared in accordance with
generally accepted accounting principles consistently applied (except
as may be indicated therein or in the notes thereto), to the extent
feasible recognizing that they have been prepared on a pro forma basis
giving effect to the Datatek Reorganization.
(d) MCY is not a party to any material pending litigation or, to
its best knowledge, any governmental investigation or proceeding, not
reflected in the MCY Financial Statements, and to its best knowledge,
no material litigation, claims, assessments or any governmental
proceedings are threatened against MCY.
(e) MCY is in good standing in its state of incorporation, and is
in good standing and duly qualified to do business in each state where
required to be so qualified except where the failure to so qualify
would have no material negative impact on MCY.
<PAGE>
(f) MCY has, or by the Effective Date will have, filed all
material tax, governmental and/or related forms and reports (or
extensions thereof) due or required to be filed and has (or will have)
paid or made adequate provisions for all taxes or assessments which
have become due as of the Effective Date.
(g) MCY has not materially breached any material agreement to
which it is a party. MCY has previously given HBI copies or access
thereto of all material contracts, commitments and/or agreements to
which MCY is a party including all relationships or dealings with
related parties or affiliates.
(h) MCY has no subsidiary corporations except those which may be
acquired in the Reorganization.
(i) MCY has made its corporate financial records, minute books,
and other corporate documents and records available for review to
present management of HBI prior to the Effective Date, during
reasonable business hours and on reasonable notice.
(j) The execution of this Agreement does not materially violate
or breach any material agreement or contract to which MCY is a party
and this Agreement has been duly authorized by all appropriate and
necessary corporate action and MCY, to the extent required, has
obtained all necessary approvals or consents required by any agreement
to which MCY is a party.
(k) Information regarding MCY which is set forth in the
Memorandum has changed and is being revised for presentation to HBI
shareholders. All such revised information which is otherwise used in
connection with the Merger shall be true, complete and accurate in all
material respects.
(l) Based on recent information which is presently believed to be
accurate, there are no more than 34 shareholders of MCY which are not
"accredited investors" as defined under U.S. securities laws.
(m) MCY acknowledges that HBI must file a Form 8-K with the
Securities and Exchange Commission ("S.E.C.") reporting the
transactions described herein and agrees to use it most diligent and
best efforts to provide audited financial statements for MCY and its
predecessors in a timely manner so as to permit HBI to file such Form
8-K and any amendments thereto on a timely basis. MCY shall use its
best efforts to ensure that such MCY and predecessor financial
statements comply with all applicable S.E.C. regulations.
5. Representations of HBI, HBI Sub and Hall. HBI, HBI Sub and Hall hereby
jointly and severally represent and warrant as follows, each of which
representations and warranties shall continue to be true as of the Effective
Date:
(a) As of the Effective Date, the shares of HBI Common Stock and
HBI Preferred Stock to be issued and delivered to the MCY Shareholders
hereunder will, when so issued and delivered, constitute duly
authorized, validly and legally issued shares of HBI capital stock,
fully-paid and nonassessable.
(b) HBI has the corporate power to enter into this Agreement and
to perform its obligations hereunder. The execution and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have been or will be duly authorized by the respective Boards
of Directors of HBI and HBI Sub and by HBI as the sole shareholder of
HBI Sub. The execution and performance of this Agreement will not
constitute a material breach of any agreement, indenture, mortgage,
license or other instrument or document to which HBI or HBI Sub is a
party and will not violate any judgment, decree, order, writ, rule,
statute, or regulation applicable to HBI, HBI Sub or their properties.
The execution and performance of this Agreement will not violate or
conflict with any provision of the respective Certificate of
Incorporation or by-laws of HBI or HBI Sub.
<PAGE>
(c) HBI has delivered to MCY a true and complete copy of its (i)
audited financial statements for the fiscal years ended December 31,
1998 and 1997, and unaudited interim financial statements for the
period ended March 31, 1999, (the "HBI Financial Statements"). The HBI
Financial Statements are complete, accurate and fairly present the
financial condition of HBI as of the dates thereof and the results of
its operations for the periods then ended. There are no material
liabilities or obligations either fixed or contingent not reflected
therein. The HBI audited financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except as may be indicated therein or in the notes
thereto) and fairly present the financial position of HBI as of the
dates thereof and the results of its operations and changes in
financial position for the periods then ended. HBI Sub has no
financial statements because it is currently being formed for the
purpose of effectuating the Merger and it has no assets, liabilities,
contracts or obligations of any kind other than as received or
incurred in connection with its incorporation in Delaware. HBI has no
subsidiaries except for HBI Sub, and HBI Sub has no subsidiaries.
(d) Since March 31, 1999, there have not been any material
adverse changes in the financial condition of HBI. At Closing, HBI
will have no material assets and no liabilities of any kind.
(e) Neither HBI nor HBI Sub is a party to or the subject of any
pending litigation, claims, or governmental investigation or
proceeding not reflected in the HBI Financial Statements or otherwise
disclosed herein, and there are no lawsuits, claims, assessments,
investigations, or similar matters, to the best knowledge of Hall,
threatened or contemplated against or affecting HBI Sub, HBI, its
management or its properties.
(f) HBI and HBI Sub are each duly organized, validly existing and
in good standing under the laws of the jurisdiction of their
incorporation; each has the corporate power to own its property and to
carry on its business as now being conducted and is duly qualified to
do business in any jurisdiction where so required except where the
failure to so qualify would have no material negative impact.
(g) HBI and HBI Sub have filed all federal, state, county and
local income, excise, property and other tax, governmental and/or
related returns, forms, or reports, which are due or required to be
filed by it prior to the date hereof and have paid or made adequate
provision in the HBI Financial Statements for the payment of all
taxes, fees, or assessments which have or may become due pursuant to
such returns or pursuant to any assessments received. Neither HBI nor
HBI Sub is delinquent or obligated for any tax, penalty, interest,
delinquency or charge.
(h) HBI's authorized capital stock presently consists of: (i)
50,000,000 shares of Common Stock, $.001 par value, of which 2,305,500
shares are presently issued and outstanding and 500,000 shares of
preferred stock, $.001 par value, of which no shares are outstanding.
HBI Sub's capitalization shall consist of 5,000 shares of no par value
common stock ("HBI Sub's Common Stock"), of which 1,000 shares shall
be outstanding, all of which shall be owned by HBI, free and clear of
all liens, claims and encumbrances. All outstanding shares of capital
stock of HBI and HBI Sub are, or shall be at Closing, validly issued,
fully paid and nonassessable. There are no existing options, calls,
warrants, preemptive rights, registration rights or commitments of any
character relating to the issued or unissued capital stock or other
securities of either HBI or HBI Sub.
<PAGE>
(i) HBI and HBI Sub have (and at the Closing they will have)
disclosed in writing all events, conditions and facts materially
affecting the business, financial conditions or results of operations
of either HBI or HBI Sub.
(j) The corporate financial records, minute books, and other
documents and records of HBI and HBI Sub have been made available to
MCY prior to the Closing.
(k) HBI has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that HBI has breached,
any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or by which it or its properties is
bound. The execution and performance hereof will not violate any
provisions of applicable law or any agreement to which HBI is subject.
HBI hereby represents that it is not a party to any material contract
or commitment other than appointment documents with its transfer
agent, and that it has disclosed to MCY all relationships or dealings
with related parties or affiliates.
(l) HBI has complied with the provisions for registration under
the Securities Act of 1933 and all applicable blue sky laws in
connection with its initial public stock offering. There are no
outstanding, pending or threatened stop orders or other actions or
investigations relating thereto.
(m) All information regarding HBI which has been provided to MCY
by HBI or set forth in any document disseminated to the public or
filed with the Securities and Exchange Commission is true, complete
and accurate in all material respects.
(n) HBI has filed all reports required to be filed by it under
the Securities Exchange Act of 1934. All of such reports are complete
and accurate in all material respects.
6. Closing. The Closing of the transactions contemplated herein shall take
place on such date (the "Closing") as mutually determined by the parties hereto
when all conditions precedent have been met and all required documents have been
delivered, which Closing is expected to be on or about July 6, 1999, or such
later date as mutually agreed to by all parties hereto, but no later than July
9, 1999. The "Effective Date" of the Merger shall be that date on which executed
copies of the attached Certificate of Merger is filed with the Secretary of
State of Delaware.
7. Conditions Precedent to the Obligations of MCY. All obligations of MCY
under this Agreement are subject to the fulfillment, prior to or as of the
Closing and/or the Effective Date, as indicated below, of each of the following
conditions:
(a) The representations and warranties by or on behalf of HBI,
HBI Sub and Hall contained in this Agreement or in any certificate or
document delivered pursuant to the provisions hereof shall be true in
all material respects at and as of the Closing and Effective Date as
though such representations and warranties were made at and as of such
time.
(b) HBI and HBI Sub shall have performed and complied with all
covenants, agreements, and conditions set forth in, and shall have
executed and delivered all documents required by this Agreement to be
performed or complied with or executed and delivered by them prior to
or at the Closing.
(c) On or before the Closing, the sole director of HBI and HBI
Sub, and HBI as sole shareholder of HBI Sub shall have approved in
accordance with applicable state corporation law the execution and
delivery of this Agreement and the consummation of the transactions
contemplated herein.
<PAGE>
(d) On or before the Closing Date, HBI and HBI Sub shall have
delivered certified copies of resolutions of the sole shareholder and
director of HBI Sub and of the sole director and shareholders of HBI
approving and authorizing the execution, delivery and performance of
this Agreement and authorizing all of the necessary and proper action
to enable HBI and HBI Sub to comply with the terms of this Agreement
including the election of MCY's nominees to the Board of Directors of
HBI, the adoption of an Employee Stock Option Plan in the form
provided by MCY and all matters outlined herein.
(e) The Merger shall be permitted by applicable state law and HBI
shall have sufficient shares of its capital stock authorized to
complete the Merger.
(f) At Closing, Hall shall have resigned in writing from his
positions as sole director and officer of HBI effective upon the
election and appointment of the MCY nominees as set forth in the
Memorandum or as otherwise designated by MCY
(g) At the Closing, all instruments and documents delivered to
MCY Shareholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for MCY.
(h) At the Closing, upon consummation of the Merger, HBI shall
have the same authorized capital as at present except as described in
Section 2(b)(2) hereof.
(i) The shares of restricted HBI capital stock to be issued to
MCY Shareholders at Closing will be validly issued, nonassessable and
fully-paid under Delaware corporation law and will be issued in a
nonpublic offering in compliance with all federal, state and
applicable securities laws.
(j) MCY shall have received the advice of its tax advisor that
this transaction is a tax free reorganization as to the exchanging MCY
common shareholders.
(k) MCY shall have received all necessary and required approvals
and consents from required parties and its shareholders.
(l) At the Closing, HBI and HBI Sub shall have delivered to MCY
an opinion of its counsel dated as of the Closing to the effect that:
(i) HBI and HBI Sub, each is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by HBI and HBI Sub and is a valid and binding
obligation of HBI and HBI Sub enforceable in accordance with its
terms;
(iii) HBI and HBI Sub each through its Board of Directors
and stockholders have taken all corporate action necessary for
performance under this Agreement;
(iv) The documents executed and delivered to MCY and MCY
Shareholders hereunder are valid and binding in accordance with
their terms and vest in MCY Shareholders, as the case may be, all
right, title and interest in and to the shares of HBI's Common
Stock to be issued pursuant to Section 2 hereof, and the shares
of HBI capital stock when issued will be duly and validly issued,
fully-paid and nonassessable; and
(v) HBI and HBI Sub each has the corporate power to execute,
deliver and perform under this Agreement.
<PAGE>
(vi) Legal counsel for HBI and HBI Sub is not aware of any
liabilities, claims or lawsuits involving HBI or HBI Sub.
8. Conditions Precedent to the Obligations of HBI and HBI Sub. All
obligations of HBI and HBI Sub under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) The representations and warranties by MCY contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of the
Closing as though such representations and warranties were made at and as
of such time.
(b) MCY shall have performed and complied with, in all material
respects, all covenants, agreements, and conditions required by this
Agreement to be performed or complied with by them prior to or at the
Closing;
(c) MCY shall cause at or as soon as practicable after Closing, each
of its shareholders to deliver to HBI, a letter commonly known as an
"Investment Letter," in substantially the form attached hereto as Exhibit
"D", acknowledging that the shares of HBI Common Stock are being acquired
by said shareholders for investment purposes.
(d) MCY shall deliver an opinion of its legal counsel to the effect
that:
(i) MCY is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by MCY.
9. Indemnification. For a period of two years from the Closing, Hall, HBI
and HBI Sub agree to jointly and severally indemnify and hold harmless MCY, and
MCY agrees to indemnify and hold harmless Hall, HBI and HBI Sub, against and in
respect of any liability, damage or deficiency, all actions, suits, proceedings,
demands, assessments, judgments, costs and expenses including attorney's fees
incident to any of the foregoing, resulting from any material misrepresentations
made by an indemnifying party to an indemnified party, an indemnifying party's
breach of covenant or warranty or an indemnifying party's nonfulfillment of any
agreement hereunder, or from any material misrepresentation in or omission from
any certificate furnished or to be furnished hereunder.
10. Nature and Survival of Representations. All representations, warranties
and covenants made by any party in this Agreement shall survive the Closing and
the consummation of the transactions contemplated hereby for two years from the
Closing. All of the parties hereto are executing and carrying out the provisions
of this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and not upon any
investigation upon which it might have made or any representation, warranty,
agreement, promise or information, written or oral, made by the other party or
any other person other than as specifically set forth herein.
11. Documents at Closing. At the Closing, the following documents shall be
delivered:
(a) MCY will deliver, or will cause to be delivered, to HBI the
following:
(i) a certificate executed by the President and Secretary of MCY
to the effect that all representations and warranties made by MCY
under this Agreement are true and correct as of the Closing, the same
as though originally given to HBI or HBI Sub on said date;
<PAGE>
(ii) a certificate from the state of MCY's incorporation dated at
or about the Closing to the effect that MCY is in good standing under
the laws of said state;
(iii) Investment Letters in the form attached hereto as Exhibit
"D" executed by each MCY Shareholder, some of which may be delivered
after Closing;
(iv) such other instruments, documents and certificates, if any,
as are required to be delivered pursuant to the provisions of this
Agreement;
(v) executed copies of the Certificate of Merger for filing; and
certified copies of resolutions adopted by the shareholders and
directors of MCY authorizing the Merger; and
(vi) all other items, the delivery of which is a condition
precedent to the obligations of HBI and HBI Sub, as set forth herein.
(vii) the legal opinion required by Section 8(d) hereof.
(b) HBI and HBI Sub will deliver or cause to be delivered to MCY:
(i) stock certificates representing those securities of HBI to be
issued as a part of the Merger as described in Section 2 hereof;
(ii) a certificate of the President/Secretary of HBI and HBI Sub,
respectively, to the effect that all representations and warranties of
HBI and HBI Sub made under this Agreement are true and correct as of
the Closing, the same as though originally given to MCY on said date;
(iii) certified copies of resolutions adopted by HBI's and HBI
Sub's Board of Directors and HBI's and HBI Sub's Stockholders
authorizing the Merger and all related matters;
(iv) certificates from the jurisdiction of incorporation of HBI
and HBI Sub dated at or about the Closing Date that each of said
corporations is in good standing under the laws of said state;
(v) opinion of HBI's counsel as described in Section 7(l) above;
(vi) such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement;
(vii) resignation of Hall as the sole officer and director of HBI
and HBI Sub; and
(viii) all other items, the delivery of which is a condition
precedent to the obligations of MCY, as set forth in Section 7 hereof.
12. Finder's Fees. Hall, HBI and HBI Sub, jointly and severally, represent
and warrant to MCY, and MCY represents and warrants to each of Hall, HBI and HBI
Sub, that none of them, or any party acting on their behalf, has incurred any
liabilities, either express or implied, to any "broker" of "finder" or similar
person in connection with this Agreement or any of the transactions contemplated
hereby, other than as described in the Memorandum. In this regard, Hall, HBI and
HBI Sub, jointly and severally, on the one hand, and MCY on the other hand, will
indemnify and hold the other harmless from any claim, loss, cost or expense
whatsoever (including reasonable fees and disbursements of counsel) from or
relating to any such express or implied liability, other than as described in
the Memorandum.
<PAGE>
13. Miscellaneous.
(a) Further Assurances. At any time, and from time to time, after
the Effective Date, each party will execute such additional
instruments and take such action as may be reasonably requested by the
other party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of this
Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply
with any of its obligations, agreements or conditions hereunder may be
waived in writing by the party to whom such compliance is owed.
(c) Termination. All obligations hereunder may be terminated at
the discretion of either party's Board of Directors if (i) the closing
conditions specified in Sections 7 and 8 are not met by July 9, 1999,
(with the exception of the delivery of the Investment Letters) unless
unanimously extended, or (ii) any of the representations and
warranties made herein have been materially breached.
(d) Amendment. This Agreement may be amended only in writing as
agreed to by all parties hereto.
(e) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given if delivered in
person or sent by prepaid first class registered or certified mail,
return receipt requested to the last known address of the noticed
party.
(f) Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in
any way the meaning or interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
(h) Binding Effect. This Agreement shall be binding upon the
parties hereto and inure to the benefit of the parties, their
respective heirs, administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement and the attached Exhibits
including the Certificate of Merger attached hereto as Exhibit "A" is
the entire agreement of the parties covering everything agreed upon or
understood in the transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind
as conditions or inducements to the execution hereof.
(j) Time. Time is of the essence.
(k) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force
and effect.
(l) Responsibility and Costs. Whether the Merger is consummated
or not, all fees, expenses and out-of-pocket costs and expenses,
including, without limitation, fees and disbursements of counsel,
financial advisors and accountants, incurred by the parties hereto
shall be borne solely and entirely by the party that has incurred such
costs and expenses, unless the failure to consummate the Merger
constitutes a breach of the terms hereof, in which event the breaching
party shall be responsible for all costs of all parties hereto.
(m) Applicable Law. This Agreement shall be construed and
governed by the laws of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
HBI SUB, INC. HEALTH BUILDERS INTERNATIONAL, INC.
By: By:
L. Dee Hall, President/Secretary L. Dee Hall, President/Secretary
L. Dee Hall, individually
MCY MUSIC WORLD, INC.
By:
Bernhard Fritsch, President
11
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Health Builders International, Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Health Builders International, Inc., and
it was originally incorporated under the same name, and the original Certificate
of Incorporation of the corporation was filed with the Secretary of State of the
State of Delaware on July 3, 1996.
2. Pursuant to Section 242 and 245 of the General Corporation Law of the
State of Delaware, this Restated Certificate of Incorporation restates and
integrates and further amends the provisions of the Certificate of Incorporation
of this corporation.
3. The text of the Restated Certificate of Incorporation as heretofore
amended or supplemented is hereby restated and further amended to read in its
entirety as follows:
CERTIFICATE OF INCORPORATION
OF
MCY.COM, INC.
ARTICLE I. NAME
The name of the corporation is MCY.COM, INC. (the "Corporation").
ARTICLE II. REGISTERED OFFICE
The address of the Corporation's registered office in the State of Delaware
is Corporation Service Company, 1013 Centre Road, in the City of Wilmington,
County of New Castle and its registered agent at such address is CORPORATION
SERVICE COMPANY.
ARTICLE III. PURPOSE
The purpose or purposes of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
ARTICLE IV. CAPITAL STOCK
The Corporation is authorized to issue three classes of shares to be
designated, respectively, "Common Stock", "Series I Voting Preferred Stock" and
"Preferred Stock". The number of shares of Common Stock authorized to be issued
is One Hundred Million Million (100,000,000). The number of shares of Series I
Voting Preferred Stock authorized to be issued is One Million (1,000,000). The
number of shares of Preferred Stock authorized to be issued is Ten Million
(10,000,000). The Common Stock, Series I Voting Preferred Stock and Preferred
Stock shall each have a par value of $.001 per share.
(a) Provisions Relating to the Common Stock. Each holder of Common Stock is
entitled to one vote for each share of Common Stock standing in such holder's
name on the records of the Corporation on each matter submitted to a vote of the
stockholders, except as otherwise required by law.
(b) Provisions Relating to the Series I Voting Preferred Stock. Holders of
Series I Voting Preferred Stock are entitled to vote with the holders of Common
Stock on all matters, except that holders of Series I Voting Preferred Stock are
entitled to five votes for each share held. The remaining rights, preferences,
privileges and restrictions correspond to those of the Common Stock, on an as
converted basis. Each share of Series I Voting Preferred Stock may be converted,
at any time, into one share of Common Stock, and will convert automatically upon
any transfer of such shares.
<PAGE>
(c) Provisions Relating to Preferred Stock. The Board of Directors (the
"Board") is authorized, subject to limitations prescribed by law and the
provisions of this Article IV, to provide for the issuance of the shares of
Preferred Stock in accordance with Sections 102(a) and 151(a) of the General
Corporation Law of Delaware, in one or more series, and by filing a certificate
pursuant to the applicable law of the State of Delaware, to establish from time
to time the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualification, limitations or restrictions thereof.
ARTICLE V. BOARD OF DIRECTORS
(a) Number. The number of directors constituting the entire Board shall be
as fixed from time to time by vote of a majority of the entire Board, provided,
however, that the number of directors shall not be reduced so as to shorten the
terms of any director at any time in office.
(b) Vacancies. Vacancies on the Board shall be filled by the affirmative
vote of the majority of the remaining directors, though less than a quorum of
the Board, or by election at an annual meeting or at a special meeting of the
stockholders called for that purpose.
(c) Ballots. Election of directors need not be by written ballot.
ARTICLE VI. BY-LAWS
In furtherance and not in limitation of the powers conferred by statute,
the Board is expressly authorized to make, alter, amend or repeal the By-Laws of
the Corporation.
ARTICLE VII. LIABILITY
To the fullest extent permitted by the Delaware General Corporation Law as
the same exists or as may hereafter be amended, no director of the Corporation
shall be personally liable to the Corporation or its stockholders for or with
respect to any acts or omissions in the performance of his or her duties as a
director of the Corporation. Any amendment or repeal of this Article VII will
not eliminate or reduce the affect of any right or protection of a director of
the Corporation existing immediately prior to such amendment or repeal.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed under the seal of the Corporation this day of June, 1999.
Health Builders International, Inc.
By:
L. Dee Hall, President and Secretary
