<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than registrant [_]
Check the appropriate box:
[ ] Preliminary proxy statement. [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2)).
[X] Definitive proxy statement.
[_] Definitive additional information.
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12.
NAVA LEISURE USA, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[_] No fee required
[X] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
Common Stock
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(2) Aggregate number of securities to which transaction applies:
1,700,000
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
$.0005 The fee was calculated based on the par value of the securities which are
being issued pursuant to the Merger.
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
$283.33
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[X] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
was paid previously. Identify filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
$.06
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
Schedule 14A
- --------------------------------------------------------------------------------
(3) Filing Party:
Nava Leisure USA, Inc.
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(4) Date Filed:
October 16, 1998
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NAVA LEISURE USA, INC.
January 11, 1999
Dear Shareholder of Nava Leisure USA, Inc.
You are invited to attend a Special Meeting of the Shareholders of Nava
Leisure USA, Inc.(the "Company") to be held on January 21, 1999 at 10:00
a.m. local time, at the offices of Interstate Transfer Company, 874 East 5900
South, Suite 101, Salt Lake City, Utah 84107 (the "Special Meeting").
At the Special Meeting, you will be asked to consider and vote upon several
proposals, all of which relate to the acquisition through a merger (the
"Merger") by the Company of Senesco, Inc. ("Senesco"), the reorganization of the
Company (the "Reorganization") and the financing of the ongoing operations of
the Company following the Merger. Prior to completing the Merger, the Company
anticipates effecting a three shares-for-one share reverse stock split (the
"Reverse Split") to reduce the number of outstanding shares of its common stock,
par value $.0005 per share ("Common Stock"), from 3,000,025 to approximately
1,000,008. The Company would then issue an aggregate of 1,700,000 shares of
post-Reverse Split Common Stock to the shareholders of Senesco in exchange for
their shares of common stock in Senesco and Senesco would be merged with and
into Nava Leisure Acquisition Corp., a wholly-owned subsidiary of the Company
formed for the purpose of effecting the Merger. Following consummation of the
Merger, the Company will change its name to "Senesco Technologies, Inc." and
anticipates reincorporating in Delaware and conducting one or more financing
transactions as contemplated in Senesco's Business Plan; in the interim, Senesco
has arranged for bridge financing (the "Bridge Loan"), provided by South Edge
International Limited, in an amount of up to $500,000; of such amount
approximately $164,000 has been drawn down to date and the remainder is expected
to be drawn down by the Company on a monthly basis following the consummation of
the Merger; you will also be asked to ratify all corporate action by Senesco
and/or the Company with respect to the Bridge Loan. Summaries of the principal
terms and conditions of the Merger, the Reverse Split, the Reorganization, the
Bridge Loan and various corporate actions incident thereto are included in the
accompanying Proxy Statement. Please review and consider the enclosed materials
carefully.
Your Board of Directors has unanimously approved the terms and conditions
of the Merger Agreement and Plan of Merger, dated October 9, 1998, among the
Company, Nava Leisure Acquisition Corp. and Senesco setting forth the terms of
the Merger as well as the related Reorganization. THE BOARD OF DIRECTORS OF THE
COMPANY BELIEVES THAT THE PROPOSED MERGER, THE REORGANIZATION AND THE BRIDGE
LOAN ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR APPROVAL AND ADOPTION OF THE MERGER,
---
THE REVERSE SPLIT , THE REORGANIZATION, THE BRIDGE LOAN AND THE OTHER PROPOSALS
SET FORTH IN THE PROXY STATEMENT.
Regardless of the number of shares you hold or whether you plan to attend
the Special Meeting, we urge you to complete, sign, date and return the enclosed
proxy card immediately. If you attend the Special Meeting, you may vote in
person if you wish, even if you have previously returned your proxy card.
Sincerely,
1
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NAVA LEISURE USA, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 21, 1999
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of Nava
Leisure USA, Inc., an Idaho Corporation (the "Company"), will be held on
January 21, 1999, at 10:00 a.m. local time, at the offices of Interstate
Transfer Company, 874 East 5900 South, Suite 101, Salt Lake City, Utah 84107,
for the following purposes:
1. To consider and vote upon a proposal to acquire Senesco, Inc.
("Senesco"), a New Jersey corporation, through the merger (the "Merger") of
Senesco into Nava Leisure Acquisition Corp. ("Acquisition Corp."), a New Jersey
corporation and a wholly-owned subsidiary of the Company formed for the purpose
of effecting the Merger. Following a three shares-for-one share reverse split
with respect to the outstanding shares of common stock par value, $.0005 per
share, ("Common Stock") of the Company (the "Reverse Split"), in consideration
of the agreement of the shareholders of Senesco to surrender their shares of
common stock no par value, of Senesco ("Senesco Common") in the Merger, the
Company will issue an aggregate of 1,700,000 shares of its authorized but
previously unissued Common Stock to the shareholders of Senescoon a pro rata,
--- ----
one share-for-one share basis as per the terms more completely described in the
accompanying Proxy Statement, the Merger Agreement and Plan of Merger, dated
October 9, 1998, 1998, by and among the Company, Senesco and Acquisition Corp.
(the "Merger Agreement") and the Letter of Intent, dated October 2, 1998,
between the Company and Senesco. As a result of the Merger, the aggregate
ownership interest of the current shareholders of the Company will decrease from
100% to approximately 37% and Senesco's shareholders will collectively own a
controlling interest in the Company .
2. To approve the Reverse Split;
3. To consider and vote upon a proposal to amend the Articles of
Incorporation of the Company to change the name of the Company to "Senesco
Technologies, Inc." in order to more accurately describe the new business of the
Company;
4. To consider and vote upon a proposal to amend the By-laws of the
Company to create two classes of directors; Class A to consist of four (4)
directors, each elected to a one-year term, and Class B to consist of one (1)
director, elected to a two-year term;
5. To elect three (3) members to the Company's Board of Directors, two of
whom shall be considered Class A Directors and shall serve until the next Annual
Meeting of Shareholders or until their successors are duly elected and
qualified, and one of whom shall be considered a Class B Director and shall hold
office for a term of two years or until his successor is duly elected and
qualified;
<PAGE>
6. To consider and vote upon the proposal to reincorporate the Company in
the State of Delaware;
7. To ratify the terms of a Loan Agreement, dated October 22, 1998,
between Senesco and South Edge International Limited, providing for up to
$500,000 in bridge financing, approximately $258,000 of which has been drawn
down by Senesco to date and the remainder of which is expected to be drawn down
by the Company on a monthly basis following completion of the Merger, in order
to fund operations during the interim period following the Merger until the
earlier of: (a) completion of a future offering of the Company's securities as
contemplated in Senesco's Business Plan; or (b) October 22, 1999; such bridge
financing to bear interest at an annual rate equal to the prime rate plus
2%;
8. To ratify the adoption by the Company's Board of Directors of a Stock
Option Plan;
9. To approve the appointment of Goldstein Golub Kessler & Co., P.C. as
auditors of the Company for the fiscal year ending June 30, 1999; and
10. To consider and vote upon any and all other business that may properly
come before the Special Meeting of Shareholders.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
ONLY SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JANUARY 7,
1999 ARE ENTITLED TO NOTICE OF AND TO VOTE AT THE SPECIAL MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENTS THEREOF.
YOUR VOTE IS IMPORTANT. ACCORDINGLY, PLEASE SIGN, DATE AND RETURN
THE ENCLOSED PROXY IMMEDIATELY TO ASSURE THAT YOUR SHARES ARE
REPRESENTED AT THE SPECIAL MEETING OF SHAREHOLDERS WHETHER OR NOT
YOU INTEND TO ATTEND THE MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
J. Rockwell Smith, President
January 11, 1999
<PAGE>
NAVA LEISURE USA, INC.
253 ONTARIO #1
P.O. BOX 3303
PARK CITY, UTAH 84060
(801) 649-5060
PROXY STATEMENT
THIS PROXY STATEMENT, which is first being mailed to shareholders on or
about January 11, 1999, is being furnished in connection with the
solicitation of proxies; ("Proxies") by the Board of Directors of Nava Leisure
USA, Inc., an Idaho corporation (the "Company") such Proxies to be voted at the
Special Meeting of Shareholders to be held on January 21, 1999, at 10:00 a.m.
local time, at the offices of Interstate Transfer Company, 874 East 5900 South,
Suite 101, Salt Lake City, Utah 84107 and at any adjournments or postponements
thereof.
At the Special Meeting, the holders of shares of common stock, par value
$.0005 per share ("Common Stock"), of the Company will be asked to consider and
vote upon a proposal for the Company to acquire the business of Senesco, Inc., a
New Jersey corporation (such corporation, as well as the surviving entity
following the Merger, being referred to herein as, "Senesco"), through the
merger (the "Merger") of Senesco into Nava Leisure Acquisition Corp. (the
Acquisition Corp."), a New Jersey corporation and a wholly-owned subsidiary of
the Company established for the purpose of effecting the Merger. Approval by the
shareholders of the Company is a condition to the consummation of the Merger. In
addition, holders of Common Stock will be asked to consider and vote upon a
related proposal to effect a reverse split with respect to the outstanding
shares of Common Stock (the "Reverse Split") prior to Merger. It is proposed
that each shareholder of the Company receive one share of Common Stock for every
three shares of Common Stock owned of record as of the record date for the
Reverse Split. In exchange for the agreement of the shareholders of Senesco to
surrender their shares of capital stock of Senesco in the Merger, the
shareholders of Senesco will receive an aggregate 1,700,000 shares of the
Company's authroized but unissued post-Reverse Split Common Stock on a pro rata,
--- ----
one share-for-one share basis. There are currently 1,700,000 shares of common
stock of Senesco outstanding.
Following consummation of the Merger: (1) Acquisition Corp. will succeed to
the business of Senesco; (2) Acquisition Corp. will change its name to "Senesco,
Inc."; (3) the Company will change its name to "Senesco Technologies, Inc."; (4)
the Company will change its state of incorporation to Delaware; and (5) the
existing Directors of the Company will resign and be replaced by the Directors
elected by the shareholders of the Company at the Special Meeting.
Following consummation of the Merger, the Company also anticipates
conducting one or more offerings of its securities to raise financing for the
development and expansion of Senesco's business, as contemplated in Senesco's
Business Plan. Neither the Company nor Senesco currently has any formal
agreement, arrangement or understanding with any third party with respect to
such financing. In order to fund expenses associated with the Merger and fund
the ongoing operations of Senesco's business in the interim, on October 22, 1998
Senesco entered into a Loan Agreement
<PAGE>
with South Edge International Limited, providing for up to $500,000 in financing
(the "Bridge Loan"). The Bridge Loan is evidenced by a Promissory Note (the
"Note"), bearing interest at an annual rate equal to the prime rate plus 2%, and
will become due and payable in full on the date of the earlier to occur of: (a)
such date (if any) following the completion of the Merger on which the Company
shall consummate an offering and sale of equity or convertible debt securities
which yields more than $500,000 in gross proceeds, and (b) October 22, 1999.
Upon consummation of the Merger, the Note will become a liability of the
Company. To date, Senesco has drawn down approximately $258,000 under the Bridge
Loan; the Company anticipates drawing down the remainder of the Bridge Loan on a
monthly basis following consummation of the Merger.
The voting securities of the Company consist of 50,000,000 authorized
shares of Common Stock, of which 3,000,025 shares were issued and outstanding at
the close of business on June 30, 1998 and approximately 1,000,008 shares will
be outstanding after the Reverse Split. The Company currently has no other class
of voting security outstanding. Senesco's current capitalization consists of
2,000,000 authorized shares of common stock, no par value, of which 1,700,000
shares are currently outstanding ("Senesco Common"). There is currently no
public trading market for the outstanding shares of Senesco Common.
Upon the consummation of the Merger, an aggregate of 1,700,000 shares of
Common Stock (i.e., one share of Common Stock for each outstanding share of
Senesco Common) will be issued to the shareholders of Senesco, resulting in a
total of approximately 2,700,008 shares of Common Stock outstanding. At such
time, the aggregate ownership interest of the current shareholders of the
Company will decrease from 100% to approximately 37% of the issued and
outstanding Common Stock and Senesco's shareholders will collectively own a
controlling interest in the Company. The ownership interest of the Company's
current shareholders would be further diluted upon the issuance of shares of
Common Stock in the event of a public or private offering of Common Stock or
convertible securities to raise additional financing for the Company's
operations. The Company currently has no formal plans to conduct such an
offering.
Only shareholders of record at the close of business on January 8, 1999,
the record date for the Special Meeting (the "Record Date"), will be
entitled to notice of and to vote at the Special Meeting. Holders of record of
Common Stock on the Record Date are entitled to one vote per share, exercisable
in person or by proxy. The presence in person or by proxy of a majority of the
outstanding shares of Common Stock entitled to vote is necessary to constitute
a quorum at the Special Meeting of Shareholders. Assuming a quorum is present,
the affirmative vote of the holders of a majority of the shares of Common Stock
outstanding, present in person or represented by proxy, is required for approval
of each of the proposals to be voted upon at the Special Meeting. Shareholders
do not have cumulative voting rights.
Idaho Law treats abstentions as counting towards the determination of
whether a quorum is present at the Special Meeting of Shareholders. Abstentions
will not, however, be counted towards, or affect the outcome of, the vote on a
proposal; a proposal (other than for the election of Directors) will be deemed
approved if more votes are cast "for" the action than "against" the action.
2
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Directors are elected by a plurality of the votes cast by the shares
entitled to vote when there is a quorum; those nominees with the most votes are
considered elected.
All Proxies received pursuant to this solicitation will be voted at the
Special Meeting of Shareholders and at any adjournments thereof as indicated in
the accompanying Proxy card. If the Proxy is properly executed and returned, the
shares it represents will be voted at the Special Meeting of Shareholders in
accordance with the instructions noted thereon. If no instructions are given,
the Proxy will be voted FOR all of the proposals presented and FOR the election
--- ---
of each of the three nominees for Director. Any shareholder executing the
attached Proxy card may revoke it at any time before it is voted: (a) by
submitting a duly executed Proxy bearing a later date; (b) by giving written
notice of revocation to the Secretary of the Company; or (c) by attending the
Special Meeting of Shareholders and orally withdrawing the Proxy.
Management knows of no other matter to be brought before the Special
Meeting of Shareholders not referred to in this Proxy Statement; if, however,
other matters properly come before the Special Meeting of Shareholders, a Proxy
will be voted in accordance with the judgment of the person voting such Proxy,
unless the Proxy card indicates otherwise.
This Proxy Statement contains summaries of the terms and conditions of
certain agreements relating to the Merger, the Bridge Loan and the expansion of
Senesco's business. Reference is made to the specific terms of such agreements.
Copies of the following documents will be available for inspection at the
Special Meeting of Shareholders:
1. Merger Agreement and Plan of Merger, dated October 9, 1998, among the
Company, Acquisition Corp. and Senesco.
2. Letter of Intent, dated October 2, 1998, between the Company and
Senesco.
3. Business Plan of Senesco.
4. Loan Agreement, dated October 2, 1998, among Senesco, Phillipe O.
Escaravage and South Edge International Limited.
5. 1998 Stock Option Plan.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROXY STATEMENT AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. NO STATEMENT OF FACT HEREIN SHALL BE DEEMED TO
CREATE ANY IMPLICATION THAT SUCH FACTS HAVE NOT CHANGED SINCE THE DATE HEREOF.
THE DATE OF THIS PROXY STATEMENT IS JANUARY 8, 1999
3
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ACTION TO BE TAKEN AT THE MEETING
PROPOSAL 1
MERGER OF SENESCO, INC. INTO ACQUISITION CORP.
THE MERGER
On October 9, 1998, the Company and its wholly-owned subsidiary,
Acquisition Corp., entered into the Merger Agreement, pursuant to which Senesco,
Inc., a New Jersey corporation with principal offices at 11 Chambers Street,
Princeton, New Jersey 08542, (609) 252-0680, will merge with and into
Acquisition Corp., with Acquisition Corp. as the surviving entity (the
"Merger"). Acquisition Corp. will change its name to Senesco, Inc. and shall
remain a wholly-owned subsidiary of the Company. As consideration for the
Merger, the Company will issue an aggregate of 1,700,000 shares (the "Merger
Shares") of its authorized but previously unissued Common Stock to the current
shareholders of Senesco. All of the Merger Shares to be issued under the Merger
Agreement shall be issued pursuant to exemptions from registration contained in
Sections 4(2) and 4(6) of the Securities Act of 1933, as amended (the "Act");
accordingly, all of such shares will be "restricted securities" pursuant to Rule
144 under the Act. The Merger Shares are being offered only to shareholders of
record of Senesco as of the effective date of the Merger. Senesco currently has
13 shareholders of record. Following consummation of the Merger the Company,
through Acquisition Corp., will own and operate the current business of
Senesco.
Copies of the Letter of Intent between Senesco and the Company dated
October 2, 1998 (the "Letter of Intent") with respect to the Merger, the Merger
Agreement and Senesco's Business Plan will be available at the Meeting.
CAPITALIZATION
The Company's authorized capital consists of 50,000,000 shares of Common
Stock and 5,000,000 shares of preferred stock, par value $.001 per share
("Preferred Stock"). The Board of Directors has the authority to issue the
Preferred Stock in one or more series and to determine by resolution the
designation and, relative rights and preferences of any such series.
There are currently 3,000,025 shares of Common Stock issued and
outstanding. Prior to consummation of the Merger, the Company will effect a
reverse split with respect to the outstanding Common Stock (the "Reverse
Split"), pursuant to which each shareholder of record of the Company as of the
record date for the Reverse Split will receive one share for every three shares
of Common Stock then held of record. After the Reverse Split, there will be
approximately 1,000,008 shares of
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Common Stock issued and outstanding. (See "Proposal 2 - Reverse Stock Split").
There are currently no shares of Preferred Stock issued and outstanding.
Upon consummation of the Merger, the Company will issue an aggregate of
1,700,000 shares of Common Stock to the shareholders of Senesco on a pro rata,
--- ----
one share-for-one share basis; accordingly, upon consummation of the Merger,
there will be a total of approximately 2,700,008 shares of Common Stock
outstanding. As a result of the Merger, the aggregate ownership interest of the
current shareholders of the Company will be decreased from 100% to approximately
37% of the then issued and outstanding Common Stock and the 13 existing
shareholders of Senesco will own a controlling interest in the Company. There is
no public trading market for Senesco's outstanding capital stock.
BUSINESS OF SENESCO, INC.
OVERVIEW
Senesco, Inc. was incorporated in New Jersey on November 24, 1998 under the
name, "Senesco of New Jersey, Inc." and is the successor entity to Senesco, LLC,
a New Jersey limited liability company which was formed in June 1998 ("Senesco
LLC"). On November 30, 1998, Senesco and Senesco LLC entered into an Agreement
and Plan of Merger pursuant to which (i) Senesco LLC merged with and into
Senesco of New Jersey, Inc., with Senesco of New Jersey, Inc. as the surviving
entity, and (ii) Senesco changed its name from "Senesco of New Jersey, Inc." to
"Senesco, Inc." The merger was consummated on December 9, 1998. The primary
business of Senesco is the development and commercial exploitation of
potentially significant technology in connection with the identification and
characterization of a gene (a lipase gene) which controls the aging (senescence)
of plants (flowers, fruits and vegetables).
Senesco has formulated a Phase One Research and Development Plan to attempt
to further characterize the gene in flowers, fruits and vegetables. Senescence
in plant tissues is the natural aging of these tissues. Loss of cellular
membrane integrity attributable to lipase gene activity is an early event during
the senescence of all plant tissues that prompts the deterioration of fresh
flowers, fruits and vegetables. This loss of integrity is attributable to the
formation of lipid metabolites in membrane bilayers that "phase-separate" and
causes the membranes to become "leaky". A decline in cell function ensues
leading to deterioration and eventual death (spoilage of the tissue).
Presently, the technology utilized for controlling senescence and
increasing the shelf life of flowers, fruits and vegetables relies on reducing
ethylene biosynthesis, and hence only has application to a limited number of
plants that are ethylene-sensitive. Senesco is researching a plan to avoid this
limitation since Senesco believes that the lipase gene is present in all plants.
Senesco's "Phase One" research and development plan focuses on three major
groups of consumer products: fruits, vegetables, and flowers. Senesco plans to
isolate and characterize the lipase gene in an example from each of these three
categories. Once a gene is characterized, Senesco plans to create a transgenic
(i.e., genetically altered) example of each to show proof of concept in
5
<PAGE>
each category. Phase One is presently focusing on tomato, carnation, green bean,
soybean, arabadopsis and banana plants.
Once work has been completed on these five plants, Senesco will enter Phase
Two of its research and development strategy by expanding the altered lipase
technology into a variety of other commercially viable agricultural crops. Such
plants would include corn, wheat, grapes, lettuce, potatoes, pineapples and
strawberries, among others. Following development of altered lipase seedlings
and seeds, Senesco's overall marketing strategy would be flexible in order to
allow for differences in plant reproduction and farming procedures customarily
employed in different sectors of the broad agricultural and horticultural
markets. For example, in instances where plant reproduction and farming
involves seeds, Senesco will commercialize its altered lipase seeds through a
technology license or similar transfer to one or more seed companies with large
distribution networks in exchange for an immediate payment and future royalties
linked to added value. In instances where plant reproduction takes place
through seedlings, Senesco will acquire and develop its own development and
distribution system for altered lipase seedlings that can be resold to farmers
at a profit.
Senesco anticipates entering into a joint venture (the "Joint Venture")
with Rahan Meristem, an Israeli company engaged in the worldwide export
marketing of genetically engineered banana fruit. Senesco would contribute
access, by way of a limited, exclusive license to the Joint Venture, to its
technology, discoveries, inventions, know-how (patentable or otherwise),
biological isolates, methods, processes, test data and related information
pertaining to plant genes and their cognate expressed proteins that are induced
during senescence (plant aging) for the purpose of developing, on a joint basis,
genetically altered banana seedlings, plants and other plant media which will
result in a "longer shelf life" banana. Rahan Meristem would contribute its
technology, inventions and know-how with respect to banana fruit. The Joint
Venture would be owned 50% by Senesco and 50% by Rahan Meristem. Negotiations
regarding the Joint Venture are well in progress, with a second draft proposal
currently under review. Management believes that the parties are in substantial
agreement on all major business and related issues.
The inventor of Senesco's technology, John E. Thompson, Ph.D., is Dean of
Science at the University of Waterloo in Waterloo, Ontario. Dr. Thompson is also
a shareholder of Senesco and owns approximately 25% of the outstanding shares of
Senesco Common. Senesco is currently negotiating a three-year research and
development agreement with Dr. Thompson and the University of Waterloo.
Management believes that such negotiations are in the final stages, with only
minor issues remaining open. In addition, Senesco has entered into a consulting
agreement with Dr. Thompson (the "Consulting Agreement") providing for Dr.
Thompson to render consulting services to Senesco in the field of controlling
senescence in living cells, including research, development, perfection and
testing. Pursuant to the Consulting Agreement, (1) Dr. Thompson has agreed not
to undertake any competing assignments, to keep all technical information
developed confidential and to disclose to Senesco any inventions and/or
improvements which arise from research performed pursuant to the Consulting
Agreement, and (2) Senesco has agreed to reimburse Dr. Thompson for all living
and travel expenses incurred by Dr. Thompson when traveling at Senesco's
request.
Dr. Thompson and his colleagues, Yuwen Hong and Katalin Hudak, filed a
patent application (the "Patent Application") on June 26, 1998 to protect their
invention, "A Plant Lipase Exhibiting Senescence-Induced Expression and a Method
for Controlling Senescence in a Plant." By assignment dated June 25, 1998 and
recorded by the United States Patent and Trademark Office on June 26, 1998, Dr.
Thompson and Messrs. Hong and Hudak assigned all of their rights in and to the
Patent Application and any other applications filed in the United States or
elsewhere with respect to the invention and/or improvements thereto to Senesco,
LLC. Senesco succeeded to the assignment, and owenership of the Patent
Application, upon the merger of Senesco, LLC with and into it. The invention
includes a method for controlling senescence of the cDNA for a carnation petal
lipase, a vector containing a cDNA for the carnation petal lipase, and a
transformed microorganism expressing the lipase of cDNA. Management believes
that the invention provides a means for delaying deterioration and spoilage,
which could greatly increase the shelf-life of fruits, vegetables, and flowers
by silencing or substantially repressing the expression of the lipase gene
6
<PAGE>
induced coincident with the onset of senescence. There can be no assurance that
patent protection will be granted with respect to the Patent Application or
that, if granted, the validity of such patent will not be challenged.
Furthermore, although the Company believes that Senesco's technology is unique
and will not violate or infringe upon the proprietary rights of any third party,
there can be no assurance that no such claims will be made or if made, could be
successfully defended against.
COMPETITION
Senesco's competitors in the field of plant senescence gene technology are
companies that develop and produce transgenic plants. Such companies include:
Archer Daniels Midland, Inc.; Monsanto Corporation and its subsidiaries;
Agritope Inc.; Dekalb Genetics; American Cyanamid; ArgEvo; Cargill; DNAP
Holding Corporation; and Garst Seed Company, among others. The Company believes
that Senesco's proprietary technology is unique and that, therefore, its
competitors' products will not be in direct competition with Senesco's; however,
there can be no assurance that Senesco's competitors will not develop a similar
product with superior properties or greater cost-effectiveness than the
Company's. Furthermore, many of Senesco's competitors have greater financial and
other resources available to them that the Company and, as such, may be
available to research and develop, and/or effectively, market, competing
products sooner than the Company.
GOVERNMENT REGULATION
At present, no governmental license or approval is necessary for the
conduct of senescence gene research and development. Approval by the Federal
Food and Drug Administration (the "FDA") is required in order to sell or offer
for sale to the general public a genetically engineered plant or plant product.
The Company believes that Senesco's current activities, which to date have
been confined to research and development efforts, do not and will not require
licensing or approval by any governmental regulatory agency until such time as
Senesco has developed a marketable genetically engineered plant for use by the
general public. Government regulations are, however, subject to change and, in
such event, there can be no assurance that Senesco may not be subject to such
regulation or require such licensing or approval in the future. In addition,
products developed by Senesco will require FDA approval prior to being marketed
and sold for use by the general public. There can be no assurance that such
approval will be obtained in a timely manner, if at all.
EMPLOYEES
Senesco currently has three employees, all of whom are currently executive
officers and are involved in the management of Senesco. It is anticipated that
following completion of the Merger, all of such employees will continue as
employees of the Company. See "Proposal 4-Election of Directors and Increase In
The Number of Members of the Board of Directors - Significant Employees."
FINANCING NEEDS
In order to fund its research and development and commercialization
efforts, Senesco plans an initial raise of approximately $2 to $4 million in
equity capital by means of a public or private offering of the Company's
securities, to take place around July 1999. A second equity raise of
approximately $10 to $15 million is tentatively planned for the second quarter
of 2000. The Company cannot estimate with greater precision these amounts and
timetable because the Company is currently refining its product development
strategy and related cost expectations. Senesco currently does not have any
formal agreement or understanding with any third party regarding any such
offering, and there can be no assurance that any such offering will, in fact,
occur or be consummated. In order to cover expenses associated with the Merger
and Senesco's operations in the interim, on October 22, 1998, Senesco entered
into a Loan Agreement with South Edge International providing for the Bridge
Loan. The Company's shareholders will also be asked to approve and ratify the
Bridge Loan at the Special Meeting. See "Proposal 7 -- The Bridge Loan."
In his report dated December 21, 1998 on the Audited Financial Statements
of Senesco, Inc. as at December 9, 1998 and for the period from inception, June
25, 1998, to December 9, 1998, Thomas P. Monahan, C.P.A., auditor for Senesco,
expressed substantial doubt as to Senesco's ability to continue as a going-
concern.
7
<PAGE>
SUMMARY OF TERMS OF MERGER
The following summary of certain information contained in this Proxy
Statement does not purport to be complete and is qualified in its entirety by
more detailed information contained in the Merger Agreement, a copy of which is
attached hereto as Exhibit A, by references to Exhibit A hereto.
The Company proposes to merge Senesco with and into Acquisition Corp., with
Aquisition Corp. as the surviving entity. Acquisition Corp. would change its
name to "Senesco, Inc." and continue the business of Senesco following
completion of the Merger.
The closing of the transactions contemplated under the Merger Agreement is
presently scheduled to be held no later than five business days after the
Special Meeting of Shareholders.
ISSUANCE OF SHARES OF COMMON STOCK
The Company proposes to issue an aggregate of 1,700,000 Merger Shares to
the shareholders of Senesco, on a pro rata, one share-for-one share basis, as
--- ----
consideration in the Merger. Upon the surrender of certificates representing
their shares of common stock, no par value of Senesco ("Senesco Common") on the
effective date of the Merger (the "Effective Date"), Senesco's shareholders will
receive one share of Common Stock for each share of Senesco Common so
surrendered. Due to the Company's issuance of the Merger Shares, the Merger will
result in an approximate 63% reduction in the ownership interests of the current
shareholders of the Company. Following consummation of the Merger, Senesco's
shareholders will collectively own a majority interest in the Company and
Senesco's President and principal shareholder, Mr. Phillipe Escaravage, will own
an approximate 34.65% interest in the Company.
The Merger Shares are being issued pursuant to Sections 4(2) and 4(6) of
the Securities Act of 1933, as amended (the "Act'). The Merger Shares are being
offered exclusively to holders of Senesco Common on the Effective Date. As of
the date hereof, there are 13 shareholders of record owning shares of Senesco
Common. The Company has made available to Senesco's shareholders copies of this
Proxy Statement, the Company's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1998 and the Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1998. In addition, the Company has offered Senesco's
shareholders opportunity to ask questions of the Company's officers. There is
currently no public trading market for the Senesco Common.
JOINT REASONS FOR THE MERGER
8
<PAGE>
Discussions between the Company and Senesco began in connection with
Senesco's attempts to secure financing to fund its research and development
efforts and the Company's desire to acquire a company with active operations
and/or a business plan currently in the process of being implemented. Since
there is no public trading market for Senesco's securities, Senesco's options
are currently limited to private sources of financing.
Indications pointing to the expectation that Senesco's technology can be
successfully developed into marketable products, together with the estimated
size of potential market for such products, prompted Senesco's management to
look towards a means of financing that would create more tangible value for
Senesco's shareholders in the near term than the taking of commercial loans,
which would burden Senesco with bank debt payment obligations and covenants
which could restrict Senesco's future, activities, or the securing of venture
capital financing, which would similarly result in ongoing dividend payment
obligations and would dilute Senesco's current outstanding ownership interests.
To that end, it was suggested by Senesco's business advisor that Senesco merge
with a public entity having an existing shareholder base and no current
operations, such as the Company. After being introduced to the Company by its
business advisor, Senesco began negotiations regarding a merger with the Company
and, on October 2, 1998, the two companies entered into a letter of intent
outlining the basic terms of the Merger and the Reverse Split. After further
negotiations, on October 9, 1998, the Company and Senesco entered into a
definitive Merger Agreement, a copy of which is included in Exhibit A to this
Proxy Statement.
The Boards of Directors of the Company and Senesco believe that the Merger
will benefit both companies. The Company's and Senesco's Boards have each
identified a number of potential benefits of the Merger, including:
(1) Fulfilling the Company's business purpose of acquiring an operating
company or a company with a business plan in the process of being
implemented;
(2) Allowing Senesco to obtain a larger shareholder base and establish a
public trading market for its securities;
(3) Helping Senesco gain the interest of investment bankers and brokerage
firms that only raise capital for public companies; and
(4) Enabling Senesco to access public capital markets to raise money for
research and development efforts.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
The following discussion was prepared by Jones, Jensen & Company, LLC
accountants to the Company, and summarizes the material Federal income tax
consequences of the Merger to the Company's and Senesco's shareholders under the
Internal Revenue Code of 1986, as amended (the "Code"), but does not cover all
tax consequences of the Merger that may be relevant to the Company's and
Senesco's stockholders in light of their particular circumstances, such as the
tax
9
<PAGE>
consequences to those of the Company's shareholders who do not hold their Common
Stock as a capital asset, foreign persons, insurance companies, tax-exempt
organizations, financial institutions, securities dealers, broker-dealers or
persons who acquired their shares in compensatory transactions. Furthermore, no
foreign, state or local tax considerations are addressed herein.
THIS SUMMARY SHOULD NOT BE REGARDED AS A SUBSTITUTE FOR AN INDIVIDUAL
ANALYSIS OF THE TAX CONSEQUENCES OF THE MERGER TO A SHAREHOLDER. EACH
SHAREHOLDER SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING THE PARTICULAR
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE MERGER TO SUCH
STOCKHOLDER'S OWN PARTICULAR SITUATION.
The Merger is expected to be treated a nontaxable reorganization within the
meaning of Section 368(a)(1)(a) of the Code.
Based upon the foregoing, the Merger will result in the following Federal
income tax consequences:
(a) no gain or loss will be recognized by holders of the Company's
Common Stock upon the exchange of the outstanding shares of
Senesco Common for the Merger Shares;
(b) no gain or loss will be recognized by Senesco's shareholders upon
the exchange of their shares of Senesco Common for shares of
Common Stock of the Company; and
(c) the holding period of Senesco's shareholders with respect to the
Merger Shares received by them in the Merger will not include the
holding period of such shareholders with respect to the shares of
Senesco Common surrendered in exchange therefor.
STATEMENT OF ACCOUNTING
The transaction will be accounted for as a reorganization of Senesco
because the shareholders of Senesco will own a controlling interest in the
Company after the Merger. Senesco will therefore be treated as the acquiring
entity for accounting purposes and, accordingly, there will be no adjustment to
the carrying value of the assets or liabilities of the Company, notwithstanding
that the Company is the acquiring entity for legal purposes.
Each Senesco shareholder should consult a tax advisor as to the particular
consequences of the Merger that may apply to such shareholder, including the
application of state, local, foreign and other Federal tax laws.
10
<PAGE>
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the Company's outstanding Common Stock have indicated to the Company that
they will vote in favor of the Merger and related transactions. Such
shareholders are parties in their individual capacities as shareholders to the
Merger Agreement.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED THEREBY AND RECOMMENDS THAT SHAREHOLDERS VOTE
FOR PROPOSAL 1.
---
PROPOSAL 2
REVERSE STOCK SPLIT
As a condition to consummation of the Merger, immediately prior thereto the
Company will effect the Reverse Split with respect to the outstanding shares of
Common Stock. Pursuant to the Reverse Split, each three outstanding shares of
Common Stock will be automatically converted into one share of Common Stock. In
the event that as a result of the Reverse Split a shareholder would own a
fractional share, the Company will issue to such shareholder an additional full
share of Common Stock in lieu thereof. The Reverse Split will not change the
total number of authorized shares or the par value of the Common Stock. The
Company currently has 3,000,025 shares of Common Stock issued and outstanding.
After giving effect to the Reverse Split, the Company will have approximately
1,000,008 shares of Common Stock issued and outstanding. As a result of the
Reverse Split, the number of authorized shares of Common Stock available for
future issuance will increase from 46,999,975 to approximately 48,999,992.
REASONS FOR THE REVERSE SPLIT
The reasons for the Reverse Split are as follows:
(1) To increase the number of authorized shares available for future
issuance pursuant to (a) stock option and ownership plans and other
compensation arrangements with management, employees and outside
consultants; (b) capital-raising transactions, such as public
offerings and private placements of the Company's securities; and (c)
acquisitions of other businesses and technologies; and
(2) To reduce the size of the public float in order to discourage short
selling and encourage market makers to make a market in the Common
Stock.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the Company's outstanding Common Stock have indicated to the Company that
they will vote in favor of the Reverse Split. Such shareholders are parties in
their individual capacities as shareholders to the Merger Agreement.
11
<PAGE>
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REVERSE SPLIT AND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 2.
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PROPOSAL 3
AMENDMENT OF ARTICLES OF INCORPORATION
The Board of Directors has proposed that the Company amend its Articles of
Incorporation in order to change its corporate name to "Senesco Technologies,
Inc.". Management believes that the change of corporate name will better
reflect the business direction of the Company as it succeeds to the business of
Senesco.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the Company's outstanding Common Stock have indicated to the Company that
they will vote in favor of the Amendment of the Company's Articles of
Incorporation. Such shareholders are parties in their individual capacities as
shareholders to the Merger Agreement.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDMENT OF THE
COMPANY'S ARTICLES OF INCORPORATION AND RECOMMENDS THAT SHAREHOLDERS VOTE
FOR THE PROPOSAL 3.
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PROPOSAL 4
ELECTION OF DIRECTORS AND INCREASE IN
THE NUMBER OF MEMBERS OF THE BOARD OF DIRECTORS
In connection with the Merger, the number of members of the Board of
Directors will be increased from three persons to five persons. The current
directors of the Company have agreed to resign and the following three persons,
two of whom have been nominated by the current management of Senesco and one of
whom has been nominated by the Board of Directors of the Company, have been
nominated for election at the Special Meeting of Shareholders. Two of such
persons would serve as directors of the Company until the next Annual Meeting of
Shareholders or until their successors have been elected and qualified. Mr.
Katz, who was nominated for election by the Company's Board of Directors, would
hold office for a two-year term until the Year 2000 Annual Meeting of
Shareholders or until his successor is elected and qualified. See, "Proposal 5
- -Amendment of By-Laws." Such nominations were made pursuant to agreement by the
Company and Senesco in Section 1.3(iii) of the Merger Agreement. Although
management does not anticipate that any of the persons named below will be
unable or unwilling to stand for election, in the event of such an occurrence,
Proxies may be voted for a substitute nominee designated by the Board of
Directors. Since suitable candidates for nomination for election to the
remaining two vacancies have
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<PAGE>
not yet been identified and selected by management, such vacancies are
anticipated to be filled by the majority vote of the three directors elected at
the Special Meeting and of Shareholders. The two members so elected would hold
office until the next Annual Meeting of Shareholders or until their successors
are duly elected and qualified. Shareholders who wish to make their own
nominations for the Board of Directors may do so by indicating such on their
Proxies or by making an oral nomination at the Special Meeting of Shareholders.
A vote FOR each of the nominees for election to the Board of Directors will also
---
be a vote FOR increasing the number of members of the Board of Directors unless
---
indicated otherwise on a shareholder's Proxy.
NOMINEES FOR DIRECTOR
The nominees for Director and biographical information regarding each are
as follows:
<TABLE>
<CAPTION>
CLASS OF OTHER OFFICES
NAME AGE DIRECTORS TO BE HELD
-------- --------- --------- -------------
<S> <C> <C> <C>
Phillipe Escaravage 22 A President &
(1 year term) Treasurer
Christopher Forbes 47 A
(1 year term)
Steven Katz 50 B
(2 year term)
</TABLE>
Phillipe Escaravage
- -------------------
Phillipe Escaravage is the founder and was the President of Senesco,
LLC since June 1998; he is now President of Senesco. He is also the founder and
President of Escaravage Biological Industries, LLC (June 1997 to present).
Escaravage Biological Industries, LLC is engaged in the business of making
investments in early stage biotechnology products. Mr. Escaravage received a
Bachelor of Arts degree in economics from Princeton University in June, 1997.
Mr. Escaravage is the son-in-law of Christopher Forbes, a nominee for Director.
Christopher Forbes
- ------------------
Christopher Forbes is Vice-Chairman of Forbes, Inc., which publishes
Forbes, the nation's leading business magazine. He is responsible for Forbes'
advertising and promotion departments. From 1981 to 1989, Mr. Forbes was
Corporate Secretary at Forbes. Prior to 1981, he held the position of Vice-
President and Associate Publisher. Mr. Forbes became a Forbes, Inc. Director in
1977.
Mr. Forbes sits on the boards of The New York Historical Society, The
Newark Museum, The Business Committee for the Arts, The Brooklyn Museum, The
Friends of New Jersey State Museum, the New York Academy of Art, The Victorian
Society in America, The Princess Margarita Foundation and The Prince Wales
Foundation. He is also a member of the Board of Advisors of The Princeton
University Art Museum, a National Trustee of the Baltimore Museum of Art, and
serves
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<PAGE>
on the Advisory Committee of the Department of European Decorative Arts of the
Museum of Fine Arts in Boston. In 1987, he was appointed to the Board of Regents
of the Cathedral of St. John The Divine in New York City.
Mr. Forbes received a Bachelor of Arts degree in Art History from Princeton
University in 1972. In 1986, he was awarded the honorary degree of Doctor of
Humane Letters by New Hampshire College.
Mr. Forbes is the father-in-law of Phillipe Escaravage, a nominee for
Director.
Steven Katz
- -----------
Steven Katz is President of Steven Katz & Associates, Inc., a management
consulting firm specializing in strategic planning, corporate development, new
product planning, technology licensing, and structuring and securing various
forms of financing. Although Mr. Katz currently has no affiliation with the
Company, he does have experience with the reporting and other obligations of
issuers with classes of securities which are registered under the Securities
Exchange Act of 1934, as amended, as well as knowledge of and familiarity with
the Company's business and current management. For these reasons, the Company's
management has chosen to nominate Mr. Katz as a candidate for Director. Senesco
currently owes Mr. Katz approximately $20,000 for management consulting services
rendered by Mr. Katz in connection with general licensing, technological and
strategic matters which are unrelated to the Merger. Mr. Katz currently owns
24,820 shares of Senesco common stock, representing a less than 1% ownership
interest in that company. Mr. Katz is not an officer, director or an affiliated
shareholder of Senesco. From 1983 to 1984, he was the co-founder and Executive
Vice President of S.K.Y. Polymers, Inc., a bio-materials company. Prior to this,
Mr. Katz was Vice President and General Manager of a non-banking division of
Citicorp, N.A. From 1976 to 1980, he held various senior management positions at
National Patent Development Corporation, including President of three
subsidiaries. Prior positions were with Revlon, Inc. (1975) and Price Waterhouse
& Co. (1969 to 1974). Mr. Katz received a Bachelor of Business Administration
degree in Accounting from the City College of New York in 1969. He is presently
a member of the board of directors of several other companies.
All of the above-named individuals have consented to being named in this
Proxy Statement and have indicated that they will serve on the Company's Board
of Directors if elected. The Company has agreed to obtain Directors' and
Officers' insurance on all post-Merger Directors and Officers.
SIGNIFICANT EMPLOYEES
In addition, following completion of the Merger the Company expects to have
the following significant employees:
SASCHA FEDYSZYN, 23, VICE-PRESIDENT.
Mr. Fedyszyn has been the Vice-President of Senesco since its formation in
November 1998. Mr. Fedyszyn had been the Executive Vice-President of Senesco,
LLC since June 1998. He is also Vice-President of Escaravage Biological
Industries, LLC (October 1997 to present). Mr Fedyszyn's prior work experience
was as Research Associate at the Logistics Management Institute (May 1995 -
September 1995). He also received a Bachelor of Arts degree from Princeton
University in Biology in June 1997.
CHRISTIAN AHRENS, 22, SECRETARY.
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<PAGE>
Mr. Ahrens has been the Secretary of the Company since its formation in
November 1998. Mr. Ahrens had been Vice-President of Operations for Senesco, LLC
since June 1998. Prior to joining Senesco, he attended Princeton University,
where he received a Bachelor of Arts degree in History in May 1998
The Company is presently negotiating three-year employments agreement with
Mr. Escaravage and each of the two above-named individuals.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the Company's outstanding Common Stock have indicated to the Company that
they will vote in favor of increasing the number of members of the Board of
Directors from three (3) persons to five (5) persons and in favor of the
election of each of the above-named nominees to the Board of Directors. Such
shareholders are parties in their individual capacities as shareholders to the
Merger Agreement.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED, AND RECOMMENDS, THAT
SHAREHOLDERS VOTE FOR INCREASING THE NUMBER OF MEMBERS CONSTITUTING THE
---
BOARD OF DIRECTORS AND FOR THE ELECTION TO THE BOARD OF DIRECTORS OF EACH
---
OF THE PERSONS NAMED ABOVE AS A NOMINEE.
PROPOSAL 5
AMENDMENT OF BY-LAWS
The Board of Directors has proposed that, in connection with the Merger,
the Company's By-laws be amended to create two classes of directors of the
Company: (1) Class A, consisting of four directors who would be elected to a
one-year term; and (ii) Class B, consisting of one director who would be elected
to a two-year term.
Vacancies occurring with respect to any directorship would be filled by
appointment by the remaining directors. In such event, any Class A Directors so
appointed would hold office until the next Annual Meeting of Shareholders and a
Class B Director so appointed would hold office for the remainder of the full,
two-year term.
The purpose of the amendment to the Company's By-laws is to ensure
continuity of management of the Company by providing the current shareholders of
the Company representation by at least one member of the Board for a two-year
period following the Merger.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the outstanding Common Stock have indicated to the Company that they will
vote in favor of amending the Company's By-laws. Such shareholders are parties
in their individual capacities as shareholders to the Merger Agreement.
15
<PAGE>
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE AMENDMENT TO THE
COMPANY'S BY-LAWS AND RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL
---
5.
PROPOSAL 6
REINCORPORATION IN STATE OF DELAWARE
The Board of Directors has proposed that, as soon as practicable after
completion of the Merger, the Company change its state of incorporation from
Idaho to Delaware by share purchase and exchange or by merging at a later date
into a new corporation which would be formed in Delaware to facilitate the
reincorporation and would be capitalized identically to the Company. Management
believes that the change in the Company's state of incorporation will better
suit the corporate agenda and business direction of the Company; however, if
such action will in any way adversely affect the Company's status as a public
company, as determined by the Company's legal counsel, then such action will not
be taken and the shareholders will be informed.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the outstanding Common Stock have indicated to the Company that they will
vote in favor of the reincorporation in the State of Delaware. Such
shareholders are parties in their individual capacities as shareholders to the
Merger Agreement.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE REINCORPORATION AND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 6 SUBJECT TO THE ADVICE OF
---
COUNSEL.
PROPOSAL 7
THE BRIDGE LOAN
Senesco's Business Plan contemplates obtaining additional financing
following completion of the Merger by means of one or more private placements
or public offerings (each, an "Offering") of newly-issued equity or convertible
debt securities of the Company; however, neither Senesco nor the Company
currently has any formal agreement, arrangement or understanding with any third
party regarding any such Offering and there can be no assurance that any such
Offering will, in fact, occur or be consummated. See, " Proposal 1 - Merger of
Senesco, Inc. into Acquisition Corp. -- Business of Senesco, Inc. -- Financing
Needs."
In order to cover expenses associated with the Merger and fund the ongoing
operations of Senesco's business in the interim, on October 22, 1998 Senesco
entered into a Loan Agreement with South Edge International Limited, providing
for up to $500,000 in financing (the "Bridge Loan"). The Bridge Loan is
evidenced by a Promissory Note bearing interest at an annual rate equal to the
prime rate plus 2% and will become due and payable in full on the date of the
earlier to occur of:
16
<PAGE>
(1) such date (if any), following completion of the Merger, on which Senesco
shall consummate an offering and sale of equity or convertible debt securities
which yields more than $500,000 in gross proceeds; and (2) October 22, 1999.
Upon consummation of the Merger, the Note will become a liability of the
Company. To date, Senesco has drawn down approximately $258,000 under the Bridge
Loan. Following consummation of the Merger, the Company anticipates drawing down
all of the remaining funds available under the Bridge Loan on a monthly
basis.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the outstanding Common Stock have indicated to the Company that they will
vote in favor the Bridge Loan. Such shareholders are parties in their
individual capacities as shareholders to the Merger Agreement.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE BRIDGE LOAN AND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 7.
---
PROPOSAL 8
APPROVAL AND ADOPTION
OF THE STOCK OPTION PLAN
APPROVAL AND ADOPTION OF THE STOCK OPTION PLAN
The Board of Directors of the Company believes it is in the best interests
of the Company to encourage stock ownership by its employees. Accordingly, the
Board of Directors approved the establishment of the 1998 Stock Option Plan (the
"Stock Option Plan") on December 31, 1998, subject to approval of the
shareholders of the Company. Options to purchase an aggregate of 500,000 post-
Reverse Split shares of Common Stock (subject to adjustment for any stock
dividend, stock split or other relevant changes in the Company's capitalization)
may be sold pursuant to the Stock Option Plan. The text of the Stock Option
Plan is attached as Exhibit B to this Proxy Statement. Set forth below is a
summary of the material provisions of the Stock Option Plan.
Under the Stock Option Plan, the Board of Directors may authorize the
issuance of options or stock purchase rights to purchase Common Stock to
designated employees and/or Directors of, and consultants to the Company. All
employees of the Company will be eligible to participate in the Stock Option
Plan. The reasons for adopting the Stock Option Plan are: (1) to enable the
Company to attract and retain the best available personnel for positions of
substantial responsibility; (2) to provide additional incentive to employees,
Directors and consultants of the Company and Senesco; (3) and to promote the
success of the Company's business.
The material features of the Stock Option Plan are as follows:
17
<PAGE>
Under the Stock Option Plan, the Board of Directors may, in its discretion,
award either incentive stock options ("ISOs") or nonstatutory stock options
("NSOs"). Grants of ISOs may be made only to employees of the Company, while
NSOs may be granted to both employees and to non-employee directors and outside
consultants. To the extent that the fair market value of shares of Common Stock
subject to ISOs which become exercisable by any employee during any calendar
year exceeds $100,000, options for those shares representing the excess over
$100,000 will be treated as NSOs.
The per share exercise price for shares to be issued pursuant to exercise
of an option shall be determined by the Board of Directors subject to the
following guidelines:
(1) In the case of an ISO:
(a) granted to an employee who, at the time of the grant of such
ISO, owns shares representing more than 10% of the aggregate voting
power of all classes of capital stock of the Company, the per share
exercise price shall be no less than 110% of the fair market value of
a share of Common Stock on the date of grant; or
(b) granted to any other employee, the per share exercise price
shall be no less than 100% of the fair market value of a share of
Common Stock on the date of such grant.
(2) In the case of a NSO:
(a) granted to a person who, at the time of the grant of such
NSO, owns stock shares representing more than 10% of the aggregate
voting power of all classes of capital stock of the Company, the per
share exercise price shall be no less than 110% of the fair market
value of a share of Common Stock on the date of grant; or
(b) granted to any other person, the per share exercise price
shall be no less than 85% of the fair market value on the date of such
grant.
(3) Stock Purchase Rights, if authorized and implemented pursuant to
a Restricted Stock Purchase Agreement approved by the Board of Directors,
may be issued either alone or in conjunction with other plans adopted under
the Stock Option Plan. The Company's Board of Directors shall advise each
offeree of Stock Purchase Rights in writing of the terms, conditions and
restrictions related to the offer, including the number of shares the
offeree is entitled to purchase, the price to be paid (which price shall
not be less than 50% of the fair market value of the shares as of the date
of the offer), and the time within which such person must accept the offer,
which shall not exceed 30 days from the date upon which the determination
was made to grant the Stock Purchase Right.
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<PAGE>
In the event of an option holder's termination as an employee, officer or
director of, or consultant to, the Company or its subsidiaries, such holder may
exercise his or her options to the extent such options were vested on the date
of termination, but in the case of an ISO only within 90 days (or such other
period of time as is determined by the Board of Directors at the time of grant
of such ISO, with such determination being made at the time of grant of the
option and not exceeding 90 days) after the date of termination (but in no event
later than the termination date set forth in the option agreement governing the
option).
The term of options granted under the Stock Option Plan will be determined
by the Board of Directors of the Company; provided that (1) ISOs shall have a
maximum term of 10 years, and (2) options granted to persons owning more than
10% of the outstanding Common Stock will have a maximum term of five years.
The consideration to be paid for the shares to be issued upon exercise of
an option, including the method of payment, shall be determined by the
Administrator of the Stock Option Plan (the "Administrator") (and, in the case
of an ISO, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) promissory note, (4) other shares which (x) in the case
of shares acquired upon the exercise of an option either have been owned by the
optionee for more than six months on the date of surrender or were not acquired,
directly or indirectly, from the Company, and (y) have a fair market value on
the date of surrender equal to the aggregate exercise price of the shares as to
which such option can be exercised, (5) authorization from the Company to retain
from the total number of shares as to which the option is exercised that number
of shares having a fair market value on the date of exercise equal to the total
exercise price for the number of shares as to which the option is exercised, (6)
delivery of a properly executed exercise notice together with irrevocable
instructions to the option holder's broker to promptly deliver to the Company
the amount of sale or loan proceeds required to pay the exercise price, (7) by
delivering an irrevocable subscription agreement for the shares, which
irrevocably obligates the option holder to take and pay for the shares not more
than 12 months after the date of delivery of the subscription agreement, (8) any
combination of the foregoing methods of payment, or (9) such other consideration
and method of payment for the issuance of shares to the extent permitted under
applicable laws. In making its determination as to the type of consideration to
accept, the Administrator shall consider whether acceptance of such
consideration may be reasonably expected to benefit the Company.
Any option granted hereunder shall be exercisable at such times and under
such conditions as determined by the Administrator, including performance
criteria with respect to the Company and/or optionee, and as shall be
permissible under the terms of the Stock Option Plan.
An option may not be exercised for a fraction of share.
An option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
option by the person entitled to exercise the option and full payment for the
shares with respect to which the option is exercised has been received by the
Company. Until the issuance (as evidenced by the appropriate entry on the
books
19
<PAGE>
of the Company or of a duly authorized transfer agent of the Company) of the
stock certificate evidencing such shares, no right to vote or receive dividends
or any other rights as shareholder shall exist with respect to the option
shares, notwithstanding the exercise of the option. The Company shall issue (or
cause to be issued) such certificate promptly upon the exercise of the
option.
Exercise of an option in any manner shall result in a decrease in the
number of shares which thereafter may be available, both for purposes of the
Stock Option Plan and for sale under the option, by the number of shares as to
which the option is exercised.
The Company currently does not have any stock option plans under which
officers, Directors or employees of the Company may participate.
ADMINISTRATION AND ELIGIBILITY
The Stock Option Plan will be administered by the Administrator or by a
committee appointed by the Company's Board of Directors (the "Committee"). The
Committee has the authority to interpret all provisions of the Stock Option
Plan. All employees of the Company and its participating subsidiaries who have
been employed by the Company or Senesco for at least one year are eligible to
participate in the Stock Option Plan, except for employees whose customary
employment is 20 hours or fewer per week or employees whose customary employment
is for not more than five months in any calendar year. Upon consummation of the
Merger, approximately three employees will be eligible to participate in the
Stock Option Plan.
In addition, nonemployee Directors and outside consultants to the Company
will be eligible for grants of NSOs under the Stock Option Plan.
AMENDMENT AND TERMINATION
The Board of Directors of the Company may amend the Stock Option Plan at
any time; however, the Stock Option Plan may not be amended in any way that will
cause rights issued thereunder to fail to meet the requirements for employee
stock option plans as defined in Section 423 of the Code, including stockholder
approval if required.
The Stock Option Plan shall terminate upon the earliest to occur of: (1)
such date on which options to purchase an aggregate number of shares of Common
Stock equal to or greater than the number of shares reserved under the Stock
Option Plan have been granted, or (2) the date on which the Stock Option Plan is
terminated by the Board of Directors; or (3) December 31, 2008.
INTERESTS OF CERTAIN PERSONS IN THE TRANSACTIONS
No officer or director of the Company serves as an officer or director of
Senesco or owns any shares of Senesco Common or other ownership interests in
Senesco. None of the officers, directors
20
<PAGE>
or principal shareholders of the Company has any substantial interest in the
proposals discussed herein to be voted upon at the Special Meeting of
Shareholders.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the outstanding Common Stock have indicated to the Company that they will
vote in favor of the approval and adoption the Stock Option Plan.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE STOCK OPTION PLAN AND
RECOMMENDS THAT SHAREHOLDERS VOTE FOR PROPOSAL 8.
---
PROPOSAL 9
APPOINTMENT OF AUDITORS
Jones, Jensen & Company, LLC served as the principal accountants to the
Company for the fiscal year ended June 30, 1998.
The Board of Directors has arranged for Goldstein Golub Kessler & Co., P.C.
to be its auditors for the fiscal year ending June 30, 1999 subject to the
consummation of the Merger and approval by the Company's shareholders. The
Company expects a representative of each of Jones, Jensen & Company, LLC and
Goldstein Golub Kessler & Co., P.C. to attend the Special Meeting and be
available for questions.
Shareholders owning an aggregate of 1,482,020 shares, representing 49.4%,
of the outstanding Common Stock have indicated to the Company that they will
vote in favor of the appointment of Goldstein Golub Kessler & Co., P.C., as the
Company's auditors or the fiscal year ending June 30, 1999.
THE BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE APPOINTMENT OF
GOLDSTEIN GOLUB KESSLER & CO., LLC AS THE COMPANY'S AUDITORS FOR THE FISCAL
YEAR ENDING JUNE 30, 1999 AND RECOMMENDS THAT STOCKHOLDERS VOTE FOR
---
PROPOSAL 9.
DISSENTERS' RIGHTS
Idaho law provides that shareholders entitled to vote on the Merger have a
right to elect to dissent to the Merger and obtain payment for their shares of
Common Stock. Shareholders wishing to exercise their rights to dissent to the
Merger and demand payment for their shares must give written notice of such
intention to the Company prior to the time when the vote on Proposal 1 is taken
at the Special meeting of shareholders.
21
<PAGE>
The following summary of ID Statute Sections 30-1-1302 to 30-1-1331 is NOT
intended to be a complete statement of the provisions of such sections and is
qualified in its entirety by the referenced Exhibit C annexed hereto.
ANY SHAREHOLDER WHO WISHES TO DISSENT AND OBTAIN PAYMENT FOR HIS OR HER SHARES
MUST VOTE SUCH SHARES AGAINST, OR ABSTAIN FROM VOTING FOR, THE MERGER.
In the case of shareholders of record who do not have beneficial ownership
of all shares held of record, a demand for payment may be made with respect to
fewer than all shares held of record, provided that such demand is made with
respect to all shares beneficially owned by any one person or over which any one
person has sole voting power.
In the event that the Company receives written notice of an intent to
demand payment from any shareholder prior to the time that the vote on Proposal
1 is taken at the Special Meeting of Shareholders, then within 10 days following
the Special Meeting of Shareholders the Company will send to such shareholder a
form for demanding payment accompanied by a copy of Chapter 13 of the Idaho
General Business Corporation Law, which governs dissenter's rights, and written
notice to such shareholder specifying: (1) where such shareholder must send a
demand for payment and where and when the certificates for certificated shares
must be deposited; (2) in the case of a holder of uncertificated shares, to what
extent transfer of shares of such shares will be restricted after its demand for
payment is received; and (3) the date by which the Company must receive a
completed and executed payment demand from such shareholder, such date to be
between 30 and 60 days following the date on which the Company delivered the
form of payment demand to such shareholder.
The form of payment demand shall specify the date on which the Company
first announced the proposed Merger to its shareholders or to the news media
and will require a shareholder making a demand for payment to certify that it
acquired beneficial ownership of its shares prior to such date. A shareholder
making a demand for payment with respect to shares acquired after the date on
which the terms of Merger were first announced to the Company's shareholders or
to the news media ("After-Acquired Shares") will receive payment of the fair
value of such shares plus accrued interest upon their agreeing in writing to
accept such payment in full satisfaction of such shareholder's demand with
respect to such shares. Such shareholder must then complete, execute and
return the form of payment and deposit its share certificates in accordance
with the terms specified in the payment form accompanying the notice.
Upon receipt of a payment demand, the Company shall pay the dissenting
shareholder from whom such demand was received the "fair value" of such
shareholder's shares, as determined in good faith by the Board of Directors of
the Company, plus accrued interest from the date of receipt of such demand.
Each such payment shall be accompanied by: (1) a statement of how the Company
arrived at its estimate of the fair value of the shares and how the interest on
such fair value was calculated; (2) a copy of the Company's Balance Sheet,
Income Statement and Statement of Changes
22
<PAGE>
in Shareholders' equity at June 30, 1998 (the end of the Company's most recent
full fiscal year); (3) a copy of the Consolidated Pro Forma Financial Statements
of the Company at September 30, 1998; and (4) a copy of Chapter 13 of the Idaho
General Business Corporation Law.
In the event that the Merger is not consummated within 60 days after the
date set for payment, the Company will return all share certificates deposited
by, and release the transfer restrictions on all uncertificated shares of,
dissenting shareholders.
Any shareholder who disagrees with the Company's estimate of the fair value
of the shares, or who does not receive either payment of such fair value or
return of its share certificates within 60 days following the date set for
receipt by the Company of a demand for payment may so notify the Company in
writing within 30 days following the date on which the Company made or offered
to make payment or within 30 days following the date on which such payment
should have been made. In such event, the shareholder may specify its own
estimate of the fair value of its shares and amount of interest due and demand
payment of such amount. The Company will then have 60 days to either pay the
amount so specified or commence an action in the Idaho District Court for Summit
County petitioning the Court to determine the fair value of the shares. All
shareholders whose claims for payment remain unsettled will be made parties to
such action. Each shareholder will be entitled to judgement, (1) for the
amount, if any, by which the Court finds the fair value of such shareholders'
shares, plus interest, exceeds the amount paid by the Company, or (2) for the
fair value, plus accrued interest, of such shareholders' After-Acquired Shares
for which the Company elected to withhold payment. The Court will have power to
determine all costs of such proceeding and assess such costs against the
Company, provided that if the Court determines any dissenting shareholder has
not acted in good faith or has acted arbitrarily or vexatiously then the Court
may assess a portion of such costs against such shareholder as it may deem
equitable.
A copy of Chapter 13 of the Idaho General Business Corporation Law is
annexed as Exhibit C to this Proxy Statement.
The dissenters' rights detailed in ID Statute Section 30-1-1302 to 30-1-
1331, inclusive, are the sole rights of dissenting shareholders.
The Board of Directors of the Company believes that, as the Company
currently has no operations or assets, and the financing transactions described
in this Proxy Statement are all conditioned upon the consummation of the Merger
and the acquisition of the business of Senesco, that the value of any
dissenters' rights will be minimal.
RECORD DATE AND SHARE OWNERSHIP BY
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
Only shareholders as of record as of the close of business on the Record
Date are entitled to receive notice of and to vote at the Special Meeting of
Shareholders. As of the Record Date, the Company had outstanding 3,000,025
shares of Common Stock.
23
<PAGE>
The following table sets forth information, to the best knowledge of the
Company as of September 18, 1998, with respect to each person known by the
Company to own beneficially more than five percent of the Company's outstanding
Common Stock, each director of the Company and all directors and officers of the
Company as a group:
<TABLE>
<CAPTION>
BEFORE THE MERGER AFTER THE MERGER
----------------- ----------------
NAME AND ADDRESS AMOUNT AND NATURE PERCENT AMOUNT AND NATURE PERCENT
BENEFICIAL OWNER OF BENEFICIAL OF OF BENEFICIAL OF
- ----------------
OWNERSHIP/1/ CLASS/2/ OWNERSHIP CLASS/3/
----------------- --------- ----------------- ---------
<S> <C> <C> <C> <C>
Edward F. Cowle 682,680 22.8% 227,560 8.43%
201 E. 87th St., Ste. 6C
New York, NY 10128 Direct Direct
David Williams 418,608 13.95% 139,536 5.16%
62 West 400 South
Salt Lake City, UT 84101 Direct Direct
H. D. Williams 372,096 12.4% 124,032 4.59%
62 West 400 South
Salt Lake City, UT 84101 Direct Direct
Mark W. McWhirter 198,452 6.61% 66,151 2.45%
3629 Steven White Dr.
San Pedro, CA 90731 Direct Direct
Dr. M. R. Moeen-Zaia 198,450 6.61% 66,150 2.45%
5024 Abuela Dr.
San Diego, CA 92124 Direct Direct
Jim Ruzicka/4/ 174,404 5.8% 58,135 2.15%
P. O. Box 3813
Park City, UT 84060 Direct Direct
</TABLE>
- ---------------------------
/1/ Each person has sole voting, investment and dispositive power over the
shares opposite his name.
/2/ Based on 3,000,025 shares of Common Stock issued and outstanding on
October 8, 1998.
/3/ Based on approximately 2,700,008 shares of Common Stock issued and
outstanding after consummation of the Merger and the after the Reverse
Split.
/4/ Indicates a current Officer and Director
24
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Sarasanan Blaendra 173,646 5.78% 57,882 2.14%
439 West 233rd St.
Carson, CA 90745 Direct Direct
J. Rockwell Smith/4/ 8,636 0.287% 2,879 0.206%
P. O. Box 3303
Park City, UT 84060 Direct Direct
James Kerr/4/ -0- -0- -0- -0-
4087 South 1300 E.
Salt Lake City, UT 84124 Direct Direct
Phillipe Escaravage/5/ /6/ -0- -0- 933,476 34.57%
11 Chambers Street
Princeton, NJ 08542 Direct Direct
Christopher Forbes/5/ -0- -0- 4,131 0.15%
Forbes, Inc.
50 5th Avenue
New York, NY 10011 Direct Direct
Steven Katz/5/ -0- -0- 24,820 0.92%
Steven Katz & Associates
Briar Ridge Plaza
440 Main Street Direct Direct
Milltown, NJ 08850
Sascha Fedyszyn/6/ -0- -0- 18,680 0.6.91%
11 Chambers Street
Princeton, NJ 08542 Direct Direct
Christian Ahrens/6/ -0- -0- 8,262 0.31%
11 Chamber Street
Princeton, NJ 08542 Direct Direct
John Thompson -0- -0- 425,000 15.74%
Michel Escaravage -0- -0- 235,369 8.69%
11 Chambers Street
Princeton, NJ 08542 Direct Direct
</TABLE>
- ----------------------------
/5/ Indicates a nominee for Director
/6/ Indicates a proposed Officer
25
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Office of the Dean
Faculty of Science Direct Direct
University of Waterloo
Waterloo, Ontario
Canada N2L 3G1
- --------------------------------------------------------------------------------
All Current Directors and
Executive Officers as a
Group (3 Persons) 183,040 6.10% 61,014 2.26%
All Nominees for Directors
and Proposed Officers as
a Group (5 Persons) -0- -0- 989,369 36.64%
</TABLE>
To the knowledge of the Company's management, during the past five
years, no present or former director or executive officer of the Company:
(1) has been subject to a personal bankruptcy proceeding or has been a
general partner in a partnership or an executive officer of a corporation
that was subject to a bankruptcy proceeding within the past two years, (2)
has been convicted of a crime (other than a traffic violation or minor
court offense); (3) was the subject of a standing court order, judgment or
decree which permanently or temporarily enjoined him from engaging in any
type of business activity or barred, suspended or limited for more than 60
days his right to engage in any type of business activity relating to
investments, including: (a) acting as a merchant, broker, commodity trading
advisor or pool operator, investment advisor, underwriter or dealer in
securities, or as an affiliated person, director or employee of any
investment company; or (b) engaging in any activity in connection with the
purchase or sale of any security or commodity; or (4) was found by a court
of competent jurisdiction or by the Securities and Exchange Commission to
have violated any Federal or state securities law.
DESCRIPTION OF BUSINESS
HISTORY AND ORGANIZATION
- ------------------------
The Company was organized on April 1, 1964 under the laws of the State of
Idaho under the name, "Felton Products, Inc.," having the stated purpose of
engaging in various investment activities, without limitation of its general
corporate powers to engage in any lawful activities. The Company engaged in
limited investment and business development operations and, from the time of its
inception, the Company has undergone several name and business changes.
26
<PAGE>
On September 1, 1987, the Company changed its name to "Ink & Imagers, Inc."
There is no record of any business operations during the period the Company was
known as "Ink & Imagers, Inc." On November 16, 1988, the Company's name was
changed to "Nava Leisure USA, Inc." in anticipation of the acquisition of an
operating business incorporated in Delaware with the same name, Nava Leisure
USA, Inc., a Delaware corporation (hereinafter, "Nava (Delaware)"). The
acquisition and related stock exchange agreement was never completed, and all
rights and equity interest in the Company and Nava (Delaware) were transferred
to the Company by an Order Pursuant to Stipulation of the District Court for
Idaho, Sixth Judicial District, on December 11, 1995 (the "Order").
The acquisition agreement was rescinded and voided by the Order, which
canceled and made null and void any exchanges of stock related thereto. All
certificates related thereto were subsequently returned to the Company. On
December 16, 1995, a special meeting of the Board of Directors was held for the
purpose of canceling all shares of Common Stock and Preferred Stock issued by
the Company pursuant to the rescinded Nava (Delaware) transaction. The Order
and ensuing Board action terminated all further issues in dispute regarding the
litigation over the Nava (Delaware) transaction. A monetary judgment in the
amount of $40,440.04 associated with that proceeding in favor of the Company is
considered uncollectible and is therefore reflected as "0" in the Company's
financial statements for the fiscal year ended June 30, 1998, and is not a
material asset to the Company. Other than the rescinded acquisition transaction
and related litigation regarding Nava (Delaware), the Company has remained
inactive since before 1988, until now.
The present promoters of the Company obtained control between 1987 and 1988
by acquiring then-controlling shareholders' interests in the then-defunct and
inactive Felton Products, Inc., for purposes of the business acquisition which
failed in 1988. The promoters of the Company are its President, J. Rockwell
Smith, and three major shareholders: Edward F. Cowle; H.D. Williams; and David
Williams. On November 1, 1996, the Directors determined that the Company should
become active in seeking potential operating businesses and business
opportunities with the intent to acquire or merge with such businesses. The
Company then began to consider and investigate potential business opportunities.
The Company is considered a development stage company and, due to its status as
a "shell" corporation, its principal business purpose is to merge with or
otherwise acquire an operating entity.
On October 13, 1987, the Company entered into an Agreement of Acquisition
with Copytex, a sole proprietorship doing business in California, and Mr. Bahram
Moeen-Ziai, the sole proprietor of Copytex, providing for the acquisition by the
Company of all of the property and assets of Copytex as a going concern in
consideration for the issuance to Mr. Moeen-Ziai of 8,000,000 shares of the
Company's Common Stock. Copytex owned and operated two print and copy shops in
the San Diego area. In addition, it was anticipated that Copytex would license
its name to limited partnerships, which would raise money from investors and
finance construction and set-up of additional locations. The Company, as sole
owner of Copytex, would be general partner of the limited partnerships. Unable
to find investors, however, no limited partnerships were actually formed and on
October 3, 1988, the Company entered into a Recission Agreement with Copytex and
Mr. Moeen-Ziai providing for return by the Company to Copytex and Mr. Moeen-Ziai
of title to all properties and assets of Copytex in exchange for return by
Mr. Moeen-Ziai to the Company of the 8,000,000 shares of Common Stock issued as
consideration for the acquisition.
On March 27, 1997, the Company voluntarily registered its Common Stock
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in order to make information concerning itself more readily
available to the public. As a result of such registration, the Company is
obligated pursuant to the Exchange Act to file with the Securities and Exchange
Commission certain interim and periodic reports, including an annual report
containing audited financial statements. The Company intends to continue to
voluntarily file these reports under the Exchange Act even if its obligation to
file such reports is suspended under applicable provisions of the Exchange
Act.
27
<PAGE>
DESCRIPTION OF PROPERTIES
The Company's administrative offices are located at 253 Ontario No. 1, P.O.
Box 3303, Park City, Utah, 84060, which are the offices of its President, Mr. J.
Rockwell Smith. Acquisition Corp.'s administrative offices are also located at
the offices of Mr. Smith. Mr. Smith allows the Company to use these facilities
without charge. The Company does not own or control any material
properties.
The Company formed Acquisition Corp. in New Jersey on October 9, 1998.
Acquisition Corp. was formed as a wholly-owned subsidiary of the Company for the
sole purpose of effecting the acquisition of Senesco. Acquisition Corp. has no
assets or liabilities, and has never engaged in any business.
LEGAL PROCEEDINGS
No legal proceedings are pending at this time against the Company.
There are no material proceedings to which any director, officer or
affiliate of the Company, or any owner, beneficially or of record, of more than
five percent (5%) of the Company's outstanding Common Stock, is a party adverse
to the Company or has a material interest adverse to the Company.
SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fiscal year ended June 30, 1998, nor since that time until the date of this
Proxy Statement.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company is not aware of any reported quotations for its Common Stock,
now or at any time within the past nine years. The Company's shares are
eligible to be quoted on the Nasdaq OTC Bulletin Board under the symbol "NAVL".
Inclusion on the OTC Bulletin Board permits price quotations for the Company's
shares to be published by such service. The Company is not aware of any
established trading market for its Common Stock nor is there any record of any
reported trades in the public market in recent years. The Company's Common
Stock has not traded in a public market since 1988. Since its inception, the
Company has not paid any dividends on its Common Stock, and the Company does not
anticipate that it will pay dividends in the foreseeable future. At October 8,
1998, the Company had 387 shareholders.
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company has been considered a development stage company with no assets
or capital and with no operations or income since approximately 1988. In their
report on the Audited Financial Statements of the Company for the fiscal year
ended June 30, 1998, Jones, Jensen & Company, LLC, auditors for the Company
expressed substantial doubt as to the Company's ability to continue as a going
concern. The costs and expenses associated with the preparation and filing of
this Proxy Statement and other operations of the Company have been paid for by
its shareholders, specifically
28
<PAGE>
H.D. Williams. It is anticipated that until completion of the Merger, the
Company will require only nominal capital to maintain its corporate viability
and necessary funds will most likely be provided by the Company's existing
shareholders or its officers and directors in the immediate future. Following
completion of the Merger, the Company anticipates raising additional funds by
drawing down the remainder of the funds available under the Bridge Loan and/or
through an Offering. See, "Proposal 7 -the Bridge Loan".
In the opinion of management, inflation has not and will not have a
material effect on the operations of the Company until such time as the Company
has successfully completed the Merger.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
The reports of the Company's principal accountants on the Company's
financial statements for the past two fiscal years did not contain any adverse
opinion or disclaimer of opinion, nor was any such report modified as to
uncertainty, audit scope or accounting principles.
During the fiscal years ended June 30, 1997 and June 30, 1998 and any
subsequent interim periods to the date of this Proxy Statement, the Company had
no disagreements with its certified public accountants with respect to
accounting practices or procedures or financial statement disclosure or auditing
scope or procedure which, if not resolved to such accountants' satisfaction,
would have caused them to make reference to the subject matter of such
disagreement in their report.
Following the Merger, the Company will engage Goldstein Golub & Kessler as
its auditors (See "Proposal 9 -- Appointment of Auditors").
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held no meetings during the fiscal
year ended June 30, 1998.
The Board of Directors does not have an audit, compensation or nominating
committee or any other committee.
EXECUTIVE OFFICERS
<TABLE>
<CAPTION>
Capacities in In Current
Name Age Which Served Position Since
---- --- ------------ --------------
<S> <C> <C> <C>
J. Rockwell Smith 59 President and Director 1987
Jim Ruzicka 55 Vice President and Director 1998
James Kerr 43 Secretary, Treasurer and 1995
Director
</TABLE>
29
<PAGE>
Set forth below is certain biographical information regarding the Company's
executive officers and directors.
J. Rockwell Smith has been President and a Director of the Company since
1987. From 1977 to 1989, Mr. Smith owned and operated his own construction
company in Park City, Utah, named Rocky Smith Construction, which supervised
construction projects in this resort community. From 1990 to the present, Mr.
Smith has been employed as a driver by the Park City Transportation Company.
Mr. Smith studied engineering at Seattle University and the University of
Washington.
Jim Ruzicka is the Vice-President of the Company, and has been a Director
of the Company since August 15, 1998. For the last five years (and previously),
Mr. Ruzicka has been the owner-operator of a ski tour package company doing
business in Utah, Colorado, Wyoming, and California. Prior to 1983, he owned and
operated seven restaurants in Chicago, Illinois and surrounding suburbs. He
attended Aurora College in Aurora, Illinois, studying liberal arts without
receiving a degree.
James Kerr has been Secretary-Treasurer and a Director of the Company since
1995. Since 1994, Mr. Kerr has worked as an independent production manager
and/or lighting technician for a number of companies situated in and around Salt
Lake City, Utah, including Great Day Ltd., Video West, Bonneville
Communications, Scopes, Garcia & Carlisle, Rutherford Productions, Stillson &
Stillson and Advantage Video. In 1993, Mr. Kerr was employed in equipment
repair and maintenance for Redman Movies & Stories of Salt Lake City, Utah, and
as a ski test programmer for Great Day Ltd. Of Utah. Previously, he has
operated his own business as a self-employed independent auto mechanic.
EXECUTIVE COMPENSATION
SUMMARY
The Company has not had a bonus, profit sharing, or deferred compensation
plan for the benefit of its employees, officers or directors. The Company has
not paid any salaries or other compensation to its officers, directors or
employees for the years ended June 30, 1997 and 1998, nor at any time during
calendar year 1998. Although the Company has not entered into an employment
agreement with any of its officers, Directors or any other persons, it
anticipates entering into three-year employment agreements with Messrs.
Escaravage, Fedyszyn and Ahrens. See, "Proposal 4 -- Election of Directors --
Significant Employees." As of the date hereof, no person has accrued any
compensation from the Company.
COMPENSATION
No form of compensation was paid to any officer or Director at any time
during the last three fiscal years.
30
<PAGE>
CASH COMPENSATION
There was no cash compensation paid to any Director or executive officer of
the Company during the fiscal years ended June 30, 1998, 1997, or 1996.
BONUSES AND DEFERRED COMPENSATION
There were no bonuses paid to any Director or executive officer of the
Company during the fiscal years ended June 30, 1998, 1997 or 1996, nor was there
any deferred compensation.
COMPENSATION PURSUANT TO PLANS
There was no compensation pursuant to any plan paid to any Director or
executive officer of the Company during the fiscal years ended June 30, 1998,
1997 or 1996.
OTHER COMPENSATION
There was no other compensation paid to any Director or executive officer
of the Company during the fiscal years ended June 30, 1998, 1997 or 1996.
COMPENSATION OF DIRECTORS
There was no compensation paid to any Director of the Company during the
fiscal years ended June 30, 1998, 1997 or 1996.
TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENT:
There are no compensatory plans or arrangements of any kind, including
payments to be received from the Company, with respect to any person which would
in any way result in payments to any such person because of his or her
resignation, retirement, or other termination of such person's employment with
the Company or its subsidiaries, or any change in control of the Company, or a
change in the person's responsibilities following a change in control of the
Company.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Company's Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and, in connection therewith, Directors, officers, and beneficial
owners of more than 10% of the Company's Common Stock are required to file on a
timely basis certain reports under Section 16 of the Exchange Act as to their
beneficial ownership of the Company's Common Stock. The following table sets
forth, as of the date of this Proxy Statement, the name and relationship of each
person who failed to file on a timely basis any reports required pursuant to
Section 16 of the Exchange Act:
31
<PAGE>
<TABLE>
<CAPTION>
NUMBER
NAME POSITION REPORT TO BE FILED OF REPORTS
---- -------- ------------------ ----------
<S> <C> <C> <C>
J. Rockwell Smith President and Director Form 3 1
Jim Ruzicka Vice President and Director Form 3 1
James Kerr Secretary-Treasurer and Director Form 3 1
Edward F. Cowle 10% or greater beneficial owner Form 3 1
David Williams 10% or greater beneficial owner Form 3 1
H.D. Williams 10% or greater beneficial owner Form 3 1
</TABLE>
The Company is not aware of whether any of the above-named persons engaged in
the buying or selling of the Company's Common Stock after they became subject to
file certain reports, pursuant to Section 16 of the Exchange Act, and does not
know if these persons were required to file any Form 4 or Forms 5, or the number
of such Forms required to be filed, if applicable.
FINANCIAL STATEMENTS OF THE COMPANY
The Audited Financial Statements of the Company for the year ended June 30,
1998 and the Unaudited Interim Financial Statements of the Company for the
quarter ended September 30, 1998 are included in this Proxy Statement.
FINANCIAL STATEMENTS OF SENESCO
The Audited Financial Statements of Senesco for the period from inception
to December 9, 1998 are included in this Proxy Statement.
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
The Consolidated Pro Forma Financial Statements, dated September 30, 1998,
of the Company and are included in this Proxy Statement.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company incorporates herein by reference the following documents filed
by it with the Securities and Exchange Commission (File No. 022307) pursuant to
the Exchange Act, copies of which are being delivered to shareholders herewith:
(1) its Annual Report on Form 10-KSB for the fiscal year ended June 30, 1998;
and (2) its Quarterly Report on Form 10-QSB for the quarter ended September 30,
1998.
SHAREHOLDERS' PROPOSALS
As previously disclosed to shareholders in connection with the Company's
1998 Annual Meeting, shareholders who wish to submit proposals for inclusion in
the Company's proxy statement and form of proxy relating to the 1999 Annual
Meeting of Shareholders must submit their proposals
32
<PAGE>
in writing to the Secretary at the address set forth on the first page of this
Proxy Statement. Proposals must be received by the Secretary no later than March
31, 1999 for inclusion in next year's proxy statement and proxy card. No
shareholder proposals will be accepted for the Special Meeting.
OTHER MATTERS
The Board of Directors does not intend to present for consideration at the
Special Meeting any business other than the matters referred to in the
accompanying Notice. In the event any other matter should properly come before
the Meeting, the person(s) appointed by the accompanying Proxy will vote on such
other matters in accordance with their best judgment pursuant to the
discretionary authority granted in the Proxy.
The cost of this solicitation of Proxies will be borne by the Company. In
addition to the use of the mails, some of the officers and regular employees of
the Company and/or consultants may solicit Proxies by telephone and telegraph,
or request brokerage houses and other custodian nominees and fiduciaries to
forward soliciting materials to beneficial owners of shares held of record by
such persons and may verify the accuracy of marked Proxies by contacting record
and beneficial owners of the shares. The Company will reimburse such persons
for the reasonable expenses incurred in forwarding such solicitation materials.
DATED this 8/th/ day of January, 1999.
--
33
<PAGE>
NAVA LEISURE USA, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 1998
<PAGE>
CONTENTS
Independent Auditors' Report......................... 3
Balance Sheet........................................ 4
Statements of Operations............................. 5
Statements of Stockholders' Equity (Deficit)......... 6
Statements of Cash Flows............................. 8
Notes to the Financial Statements.................... 10
<PAGE>
[JONES, JENSEN & COMPANY, LLC LETTERHEAD APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
----------------------------
Board of Directors
Nava Leisure USA, Inc.
Salt Lake City, Utah
We have audited the balance sheet of Nava Leisure USA, Inc. (a development
stage company) as of June 30, 1998 and the related statements of
operations, stockholders' equity (deficit) and cash flows for the years
ended June 30, 1998 and 1997 and from inception on April 1, 1964 through
June 30, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nava Leisure USA, Inc.
as of June 30, 1998 and the results of its operations and its cash flows
for the years ended June 30, 1998 and 1997 and from inception on April 1,
1964 through June 30, 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 3 to the
financial statements, the Company is a development stage company with no
established source of revenues. These conditions raise substantial doubt
about its ability to continue as a going concern. Management's plans
concerning these matters are also described in Note 3. The financial
statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
August 5, 1998
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
------
June 30,
1998
------------
CURRENT ASSETS
Cash $ -
------------
Total Current Assets -
------------
TOTAL ASSETS $ -
============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 3,100
-------------
Total Current Liabilities 3,100
-------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 5,000,000 shares authorized at $0.001
par value; Series A preferred stock, 1,100,000
shares authorized, -0- shares issued and outstanding -
Series B preferred stock, 100,000 shares authorized
at $1.00 par value; -0- shares issued and outstanding -
Common stock, 50,000,000 shares authorized at $0.0005
par value; 3,000,025 shares issued and outstanding 1,500
Capital in excess of par value 32,019
Deficit accumulated during the development stage (36,619)
--------------
Total Stockholders' Equity (Deficit) (3,100)
--------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ -
==============
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
April 1,
For the Years Ended 1964 Through
June 30, June 30,
-------------------------
1998 1997 1998
---------- ----------- --------------
REVENUE $ - $ - $ -
---------- ----------- --------------
EXPENSES (10,374) (7,810) (36,619)
---------- ----------- --------------
NET LOSS $ (10,374) $ (7,810) $ (36,619)
========== =========== ==============
NET LOSS PER SHARE $ (0.00) $ (0.00)
========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,000,025 3,000,025
========== ===========
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
-------------------
Shares Amount Par Value Stage
--------- -------- ----------- -------------
<S> <C> <C> <C> <C>
Balance, April 1, 1965 - $ - $ - $ -
Issuance of common stock for
cash from inception on April 1,
1965 through June 30, 1993 at
approximately $0.0036 per share 3,000,025 1,500 9,250 -
Contribution of capital through
payment of expenses by
shareholder - - 500 -
Net loss from inception
on April 1, 1964 through
June 30, 1993 - - - (13,110)
----------- --------- --------- ---------
Balance, June 30, 1993 3,000,025 1,500 9,750 (13,110)
Contribution of capital through
payment of expenses by
shareholder - - 1,405 -
Net loss for the year
ended June 30, 1994 - - - (2,169)
----------- --------- --------- ---------
Balance, June 30, 1994 3,000,025 1,500 11,155 (15,279)
Contribution of capital through
payment of expenses by
shareholder - - 2,027 -
Net loss for the year
ended June 30, 1995 - - - (1,602)
----------- --------- --------- --------
Balance, June 30, 1995 3,000,025 $ 1,500 $ 13,182 $(16,881)
----------- --------- --------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Capital in During the
Common Stock Excess of Development
--------------------------
Shares Amount Par Value Stage
------------ ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Balance, June 30, 1995 3,000,025 $ 1,500 $ 13,182 $ (16,881)
Contribution of capital through
payment of expenses by
shareholder - - 653 -
Net loss for the year
ended June 30, 1996 - - - (1,554)
------------ ------------ ------------- ----------------
Balance, June 30, 1996 3,000,025 1,500 13,835 (18,435)
Contribution of capital through
payment of expenses by
shareholder - - 7,403 -
Net loss for the year
ended June 30, 1997 - - - (7,810)
------------ ------------- -------------- ----------------
Balance, June 30, 1997 3,000,025 1,500 21,238 (26,245)
Contributed capital - - 10,781 -
Net loss for the year
ended June 30, 1998 - - - (10,374)
------------ ------------- ------------- ----------------
Balance, June 30, 1998 3,000,025 $ 1,500 $ 32,019 $ (36,619)
============ ============= ============= ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
April 1,
For the Years Ended 1964 Through
June 30, June 30,
-----------------------------------
1998 1997 1998
--------------- ------------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (10,374) $ (7,810) $ (36,619)
Adjustments to reconcile net loss to
cash used by operating activities:
Expenses paid by shareholder 10,781 7,403 22,769
Increase (decrease) in accounts
payable (407) 407 3,100
--------------- ------------ -----------
Net Cash Provided (Used) by
Operating Activities - - (10,750)
--------------- ------------ -----------
CASH FLOWS FORM INVESTING
ACTIVITIES - - -
--------------- ------------ -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of
common stock - - 10,750
--------------- ------------ -----------
Net Cash Provided (Used) by
Financing Activities - - 10,750
--------------- ------------ -----------
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
--------------- ------------ -----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ - $ - $ -
=============== ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
April 1,
For the Years Ended 1964 Through
June 30, June 30,
------------------------------------
1998 1997 1998
----------- ------------ ------------
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Nava Leisure USA, Inc.
(a development stage company) (the Company). The Company was
incorporated on April 1, 1964 in the State of Idaho as Felton
Products, Inc. for the purpose of engaging in investing activities.
On October 13, 1987, the Company issued 12,000,000 of its previously
unissued authorized shares to acquire the assets of Copytex. In
connection with this agreement, the Company changed its name to Ink &
Imagers, Inc. On October 3, 1988, the Company rescinded the agreement
with Copytex. The shares issued pursuant to the agreement were
returned and canceled.
On November 30, 1998, the Company entered into an agreement with Nava
Leisure USA, Inc. (Nava), whereby, it would acquire all of the issued
and outstanding stock of Nava in exchange for 18,730,900 shares of its
common stock, 1,002,000 shares of its series A preferred stock and
89,670 shares of its series B preferred stock. In connection with this
agreement, the Company changed its name to Nava Leisure USA, Inc. On
December 15, 1995, the Company rescinded the agreement due to non-
performance by Nava. All shares issued per the agreement were canceled
and the cancellation was shown retroactively. (Note 2).
The Company is currently inactive, and is seeking other business
opportunities through mergers and acquisitions.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a June 30 year end.
c. Net Loss Per Share
The computation of net loss per share of common stock is based on the
weighted average number of shares outstanding during the period.
d. Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
highly liquid investments with an original maturity of three months or
less to be cash equivalents.
10
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Provision for Taxes
The Company accounts for income taxes using Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under
Statement 109, the liability method is used in accounting for income
taxes.
As of June 30, 1998, the Company had net operating loss carryforwards
of approximately $36,000 that may be offset against future taxable
income through 2013. The tax benefit of the net loss carryforwards is
offset by a valuation allowance of the same amount due to the
uncertainty that the carryforwards will be used before they expire.
f. Stock Split
On October 27, 1988, the Company effected a split of its common shares
outstanding on a 1.5-for-1 basis. The financial statements have been
retroactively restated to reflect the effects of this stock split.
g. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - LITIGATION
On September 26, 1994, a shareholder of the Company filed a lawsuit
against the Company and the shareholders (the Shareholders) that
received shares of the of the Company's stock per the exchange
agreement between the Company and Nava Leisure USA, Inc. (a Delaware
corporation). The lawsuit alleged that the terms of the agreement had
not been fulfilled, and that the exchange agreement should be unwound
as a result of the non-performance. The lawsuit also sought damages
from the shareholders in the amount of $35,000 on behalf of the
Company.
On December 11, 1995, a default judgment was recorded in favor of the
shareholder who had filed the lawsuit. The judgment ordered that the
Exchange Agreement be rescinded, that the shares issued per the
Exchange Agreement be returned to the Company, and that the Company be
awarded damages warded. Due to the uncertainty that the Company will
collect any of the damages, the amount has been offset in full by a
valuation allowance.
11
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
June 30, 1998
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of
the Company to seek a merger with an existing, operating company.
Currently, the stockholders are committed to covering all operating
expenses and other costs until sufficient revenues are generated.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the years ended June 30, 1998 and 1997, a shareholder of the
Company paid expenses on its behalf in the amounts of $10,781 and
$7,403, respectively. These amounts were contributed by the
shareholder to the capital of the Company.
12
<PAGE>
NAVA LEISURE USA, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND JUNE 30, 1998
<PAGE>
C O N T E N T S
<TABLE>
<CAPTION>
<S> <C>
Independent Accountants' Report................ 3
Balance Sheets................................. 4
Statements of Operations....................... 5
Statements of Stockholders' Equity (Deficit)... 6
Statements of Cash Flows....................... 8
Notes to the Financial Statements.............. 9
</TABLE>
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
-------------------------------
Board of Directors
Nava Leisure USA, Inc.
The accompanying balance sheet of Nava Leisure USA, Inc. (a development stage
company) as of September 30, 1998 and the related statements of operations,
stockholders' equity (deficit) and cash flows for the three months ended
September 30, 1998 and 1997 and from inception on April 1, 1964 through
September 30, 1998 were not audited by us and, accordingly, we do not express an
opinion on them. The accompanying balance sheet as of June 30, 1998 was audited
by us and we expressed an unqualified opinion on it in our report dated August
5, 1998.
Jones, Jensen & Company
Salt Lake City, Utah
October 12, 1998
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
September 30, June 30,
1998 1998
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash $ - $ -
-------------- -------------
Total Current Assets - -
-------------- -------------
TOTAL ASSETS $ - $ -
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 3,100 $ 3,100
-------------- -------------
Total Current Liabilities 3,100 3,100
-------------- -------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, 5,000,000 shares authorized at $0.001
par value:
Series A preferred stock, 1,100,000 shares authorized,
-0- shares issued and outstanding - -
Series B preferred stock, 100,000 shares authorized at
$1.00 par value; -0- shares issued and outstanding - -
Common stock, 50,000,000 shares authorized at $0.0005
par value; 3,000,025 shares issued and outstanding 1,500 1,500
Capital in excess of par value 32,884 32,019
Deficit accumulated during the development stage (37,484) (36,619)
-------------- -------------
Total Stockholders' Equity (Deficit) (3,100) (3,100)
-------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ - $ -
============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three Months April 1, 1964
Ending September 30, Through
------------------------- September 30,
1998 1997 1998
----------- ----------- ------------
<S> <C> <C> <C>
REVENUE $ - $ - $ -
----------- ----------- -----------
EXPENSES - - -
----------- ----------- -----------
OPERATING LOSS - - -
----------- ----------- -----------
LOSS ON DISCONTINUED
OPERATIONS (865) (1,455) (37,484)
----------- ----------- -----------
NET LOSS $ (865) $ (1,455) $ (37,484)
=========== =========== ===========
BASIC NET LOSS PER SHARE $ (0.00) $ (0.00)
=========== ===========
BASIC WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,000,025 3,000,025
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
--------------------- Excess of Development
Shares Amount Par Value Stage
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
Balance, April 1, 1965 - $ - $ - $ -
Issuance of common stock for
cash from inception on April 1,
1965 through June 30, 1993 at
approximately $0.0036 per share 3,000,025 1,500 9,250 -
Contribution of capital through
payment of expenses by
shareholder - - 500 -
Net loss from inception
on April 1, 1964 through
June 30, 1993 - - - (13,110)
--------- --------- --------- ---------
Balance, June 30, 1993 3,000,025 1,500 9,750 (13,110)
Contribution of capital through
payment of expenses by
shareholder - - 1,405 -
Net loss for the year
ended June 30, 1994 - - - (2,169)
--------- --------- --------- ---------
Balance, June 30, 1994 3,000,025 1,500 11,155 (15,279)
Contribution of capital through
payment of expenses by
shareholder - - 2,027 -
Net loss for the year
ended June 30, 1995 - - - (1,602)
--------- --------- --------- ---------
Balance, June 30, 1995 3,000,025 $ 1,500 $ 13,182 $ (16,881)
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Capital in During the
--------------------- Excess of Development
Shares Amount Par Value Stage
--------- --------- --------- -----------
<S> <C> <C> <C> <C>
Balance, June 30, 1995 3,000,025 $ 1,500 $ 13,182 $ (16,881)
Contribution of capital through
payment of expenses by
shareholder - - 653 -
Net loss for the year
ended June 30, 1996 - - - (1,554)
--------- --------- --------- -----------
Balance, June 30, 1996 3,000,025 1,500 13,835 (18,435)
Contribution of capital through
payment of expenses by
shareholder - - 7,403 -
Net loss for the year
ended June 30, 1997 - - - (7,810)
--------- --------- --------- -----------
Balance, June 30, 1997 3,000,025 1,500 21,238 (26,245)
Contributed capital - - 10,781 -
Net loss for the year
ended June 30, 1998 - - - (10,374)
--------- --------- --------- -----------
Balance, June 30, 1998 3,000,025 1,500 32,019 (36,619)
Contributed capital (unaudited) - - 865 -
Net loss for the three months
ended September 30, 1998
(unaudited) - - - (865)
--------- --------- --------- -----------
Balance, September 30, 1998
(unaudited) 3,000,025 $ 1,500 $ 32,884 $ (37,484)
========= ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three Months April 1, 1964
Ending September 30, Through
------------------------- September 30,
1998 1997 1998
----------- ----------- ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net loss $ (865) $ (1,455) $ (37,484)
Adjustments to reconcile net loss to
cash used by operating activities:
Expenses paid by shareholder 865 407 23,634
Increase (decrease) in accounts
payable - 1,048 3,100
----------- ----------- ------------
Net Cash Provided (Used) by
Operating Activities - - (10,750)
----------- ----------- ------------
CASH FLOWS FROM INVESTING
ACTIVITIES - - -
----------- ----------- ------------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of common
stock - - 10,750
----------- ----------- ------------
Net Cash Provided (Used) by
Financing Activities - - 10,750
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
----------- ----------- ------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ - $ - $ -
=========== =========== ============
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1998 and June 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The financial statements presented are those of Nava Leisure USA, Inc.
(a development stage company) (the Company). The Company was
incorporated on April 1, 1964 in the State of Idaho as Felton Products,
Inc. for the purpose of engaging in investing activities.
On October 13, 1987, the Company issued 12,000,000 of its previously
unissued authorized shares to acquire the assets of Copytex. In
connection with this agreement, the Company changed its name to Ink &
Imagers, Inc. On October 3, 1988, the Company rescinded the agreement
with Copytex. The shares issued pursuant to the agreement were returned
and canceled.
On November 30, 1998, the Company entered into an agreement with Nava
Leisure USA, Inc, (Nava), whereby, it would acquire all of the issued
and outstanding stock of Nava in exchange aor 18,730,900 shares of its
common stock, 1,002,000 shares of its Series A preferred stock and
89,670 shares of its Series B preferred stock. In connection with this
agreement, the Company changed its name to Nava Leisure USA, Inc. On
December 15, 1995, the Company rescinded the agreement due to non-
performance by Nava. All shares issued per the agreement were canceled
and the cancellation was shown retroactively (Note 2).
The Company is currently inactive, and is seeking other business
opportunities through mergers and acquisition.
b. Accounting Method
The Company's financial statements are prepared using the accrual
method of accounting. The Company has elected a June 30 year end.
c. Basic Net Loss Per Share
The computation of basic net loss per share of common stock is based on
the weighted average number of shares outstanding during the period.
d. Cash Equivalents
For purposes of the Statement of Cash Flows, the company considers all
highly liquid investments with an original maturity of three months or
less to be cash equivalents.
9
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
Notes to the Financial Statements
September 30, 1998 and June 30, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Provision for Taxes
The Company accounts for income taxes using Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes." Under
Statement 109, the liability method is used in accounting for income
taxes.
As of September 30, 1998, the Company had net operating loss
carryforwards of approximately $36,000 that may be offset against
future taxable income through 2013. The tax benefit of the net loss
carryforwards is offset by a valuation allowance of the same amount due
to the uncertainty that the carryforwards will be used before they
expire.
f. Stock Split
On October 27, 1988, the Company effected a split of its common shares
outstanding on a 1.5-for-1 basis. The financial statements have been
retroactively restated to reflect the effects of this stock split.
g. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - LITIGATION
On September 26, 1994, a shareholder of the company filed a lawsuit
against the Company and the shareholders (the Shareholders) that
received shares of the Company's stock per the exchange agreement
between the Company and Nava Leisure USA, Inc. (a Delaware
corporation). The lawsuit alleged that the terms of the agreement had
not been fulfilled, and that the exchange agreement should be unwound
as a result of the non-performance. The lawsuit also sought damages
from the shareholders in the amount of $35,000 on behalf of the
Company.
On December 11, 1995, a default judgment was recorded in favor of the
shareholder who had filed the lawsuit. The judgment ordered that the
Exchange Agreement be rescinded, that the shares issued per the
Exchange Agreement be returned to the Company, and that the Company be
awarded damages warded. Due to the uncertainty that the Company will
collect any of the damages, the amount has been offset in full by a
valuation allowance.
10
<PAGE>
NAVA LEISURE USA, INC.
(A Development Stage Company)
September 30, 1998 and June 30, 1998
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. However, the Company does not have
significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of the
Company to seek a merger with an existing, operating company. Currently
the stockholders are committed to covering all operating expenses and
other costs until sufficient revenues are generated.
NOTE 4 - RELATED PARTY TRANSACTIONS
During the three month period ended September 30, 1998 and the year
ended June 30, 1998, a shareholder of the Company paid expenses on its
behalf in the amounts of $865 and $10,781, respectively. These amounts
were contributed by the shareholder to the capital of the Company.
NOTE 5 - PROPOSED MERGER
The Company has entered into an agreement with Senesco, LLC, a New
Jersey limited liability company. The members of Senesco, LLC, desire
to exchange all of their ownership interest in Senesco LLC for shares
of the Company common stock, representing 63% of the total issued and
outstanding common stock. Management of the Company has agreed to raise
$500,000 through the bridge financing on the closing date.
11
<PAGE>
SENESCO TECHNOLOGIES, INC.
(FORMERLY NAVA LEISURE USA, INC.)
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
<PAGE>
C O N T E N T S
<TABLE>
<CAPTION>
<S> <C>
Consolidated Pro forma Balance Sheet................. 3
Consolidated Pro forma Statement of Operations....... 5
Statement of Assumptions and Disclosures............. 6
</TABLE>
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
Consolidated Pro forma Balance Sheet
September 30, 1998
(Unaudited)
ASSETS
------
<TABLE>
<CAPTION>
Proforma
Senesco Adjustments
Technologies, Senesco, Increase Proforma
Inc. LLC (Decrease) Consolidated
------------- -------- ------------ ------------
<S> <C> <C> <C> <C>
CURRENT ASSETS
Cash $ - $ - $ - $ -
------------- -------- ----------- ------------
Total Current Assets - - - -
------------- -------- ----------- ------------
OTHER ASSETS
Patent costs - 16,417 - 16,417
------------- -------- ----------- ------------
Total Other Assets - 16,417 - 16,417
------------- -------- ----------- ------------
TOTAL ASSETS $ - $ 16,417 $ - $ 16,417
============= ======== =========== ============
</TABLE>
See Summary of Assumptions and Disclosures.
3
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
Consolidated Pro forma Balance Sheet (Continued)
September 30, 1998
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>
<CAPTION>
Proforma
Senesco Adjustments
Technologies, Senesco, Increase Proforma
Inc. LLC (Decrease) Consolidated
-------------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 3,100 $ - $ 25,000 $ 28,100
Accrued expenses - 36,417 - 36,417
------------- --------- ----------- ------------
Total Current Liabilities 3,100 36,417 25,000 64,517
------------- --------- ----------- ------------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock; 5,000,000
shares authorized at $0.001
par value:
Series A Preferred Stock,
1,100,000 shares
authorized, shares
issued and outstanding - - - -
Series B Preferred Stock,
100,000 shares authorized
at $1.00 par value; -0-
shares issued and
outstanding - - - -
Common stock; 50,000,000
shares authorized at
$0.0005 par value,
2,698,413 shares issued
and outstanding 1,500 - (151) 1,349
Additional paid-in capital 32,884 89,110 (62,333) 59,661
Accumulated deficit (37,484) (109,110) 37,484 (109,110)
------------- --------- ----------- ------------
Total Stockholders' Equity
(Deficit) (3,100) (20,000) (25,000) (48,100)
------------- --------- ----------- ------------
TOTAL LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT) $ - $ 16,417 $ - $ 16,417
============= ========= =========== ============
</TABLE>
See Summary of Assumptions and Disclosures.
4
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
Consolidated Statement of Operations
September 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Proforma
Senesco Adjustments
Technologies, Senesco, Increase Proforma
Inc. LLC (Decrease) Consolidated
-------------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ -
-------- ---------- ----------- ------------
EXPENSES
General and administrative 10,374 109,110 - 119,484
-------- ---------- ----------- ------------
Total Expenses 10,374 109,110 - 119,484
-------- ---------- ----------- ------------
LOSS FROM OPERATIONS (10,374) (109,110) - (119,484)
-------- ---------- ----------- ------------
NET LOSS $(10,374) $ (109,110) $ - $ (119,484)
======== ========== =========== ============
BASIC NET LOSS PER SHARE $ (0.01) $ (0.06) $ (0.04)
======== ========== ============
BASIC WEIGHTED AVERAGE
NUMBER OF SHARES
OUTSTANDING 998,413 1,700,000 2,698,413
======== ========== ============
</TABLE>
See Summary of Assumptions and Disclosures.
5
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
September 30, 1998
(Unaudited)
BACKGROUND AND HISTORICAL INFORMATION
The financial statements presented are those of Senesco Technologies,
Inc. (a development stage company) (the Company). The Company was
incorporated on April 1, 1964 in the State of Idaho as Felton Products,
Inc. for the purpose of engaging in investing activities.
On October 13, 1987, the Company issued 12,000,000 of its previously
unissued authorized shares to acquire the assets of Copytex. In
connection with this agreement, the Company changed its name to Ink &
Imagers, Inc. On October 3, 1988, the Company rescinded the agreement
with Copytex. The shares issued pursuant to the agreement were returned
and canceled.
On November 30, 1998, the Company entered into an agreement with Nava
Leisure USA, Inc, (Nava), whereby, it would acquire all of the issued and
outstanding stock of Nava in exchange for 18,730,900 shares of its common
stock, 1,002,000 shares of its Series A preferred stock and 89,670 shares
of its Series B preferred stock. In connection with this agreement, the
Company changed its name to Nava Leisure USA, Inc. On December 15, 1995,
the Company rescinded the agreement due to non-performance by Nava. All
shares issued per the agreement were canceled and the cancellation was
shown retroactively.
The Company was inactive, and was seeking other business opportunities
through mergers and acquisition.
Senesco, LLC (SLCC) was formed in June 1998 to commercially exploit
potentially significant technology in connection with the identification
and characterization of a gene (a lipase gene) which controls the aging
of plants (flowers, fruits and vegetables).
SLCC has formulated a Phase One research and development plan to attempt
to further characterize the gene in flowers, fruits and vegetables.
Senescence in plant tissues is the natural aging of these tissues. Loss
of cellular membrane integrity attributable to lipase gene activity is an
early event during the senescensce of all plant tissues that prompts the
deterioration of fresh flowers, fruits and vegetables. This loss of
integrity is attributable to the formation of lipid metabolites in
membrane bi-layers that "phase-separate" and cause the membranes to
become "leaky". A decline in cell function ensues leading to
deterioration and eventual death (spoilage of the tissue).
Presently, the technology utilized for controlling senescence and
increasing the shelf life of flowers, fruits and vegetables relies on
reducing ethylene biosynthesis, and hence only has application to a
limited number of plants that are ethylene-sensitive. SLCC is researching
a plan to avoid this limitation since Senesco believes that the lipase
gene is present in all plants.
6
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
September 30, 1998
(Unaudited)
BACKGROUND AND HISTORICAL INFORMATION (Continued)
Currently, SLLC's research and development plan focuses on gene
characterization of carnation for flowers, tomato for fruits, and
Arabidopsis thaliana for (leafy) vegetables. In addition, SLLC expects to
enter into a joint venture with an Israeli company. The joint venture is
expected to be based on the contribution by SLLC of its gene technology
and Rahan Meristem's know-how in banana fruit. Rahan Meristem is in the
business of worldwide export marketing in genetically engineered banana
plants.
The inventor of SLLC's technology is John E. Thompson, Ph.D., who is the
Dean of Science at the University of Waterloo in Waterloo, Ontario. SLLC
is currently negotiating a three-year research and development agreement
with Dr. Thompson and the University of Waterloo.
SLLC filed a patent application on June 26, 1998 to protect the above-
described developments/inventions.
PROFORMA TRANSACTIONS
The historical financial information contained herein has been
consolidated assuming the issuance of 1,700,000 common stock of Senesco
Technologies, Inc. (STI) for 100% of the outstanding common stock of
Senesco, LLC. as of September 30, 1998. The purchase has been
retroactively applied to the historical information of these companies.
The balance sheet of Senesco Technologies, Inc. is shown as of September
30, 1998 and the balance sheet of Senesco, LLC (SLLC) is shown as of
September 30, 1998. The statement of operation of Nava Leisure USA, Inc.
is for the year ended June 30, 1998 and the statement of operations of
Senesco, LLC is from inception through September 30, 1998.
Senesco Technologies, Inc. issued 1,700,000 shares of common stock in
exchange for 100% of the outstanding interests of Senesco, LLC. The
proforma adjustments have been accounted for as a recapitalization of
SLLC because the members of SLLC control the Company after the
acquisition. Therefore, SLLC is treated as the acquiring entity.
Accordingly, there was no adjustment to the carrying value of the assets
or liabilities of SLLC. STI is the acquiring entity for legal purposes
and SLLC is the surviving entity for accounting purposes.
1. Record the purchase of Senesco, LLC. through the issuance of
1,700,000 shares of common stock:
Common stock $ 850
Additional paid-in capital (850)
-----
Total $ -
=====
7
<PAGE>
SENESCO TECHNOLOGIES, INC.
(Formerly Nava Leisure USA, Inc.)
(A Development Stage Company)
September 30, 1998
(Unaudited)
PROFORMA TRANSACTIONS (Continued)
2) Record the estimated costs of the merger:
Accounts payable $ 25,000
Additional paid-in capital (25,000)
-----------
Total $ -
===========
3) Eliminate the deficit of Senesco Technologies, Inc.:
Accumulated deficit $ (37,484)
Additional paid-in capital 37,484
-----------
Total $ -
===========
4) Record a 1 share for 3 shares reverse split of Senesco Technologies, Inc.:
Common stock $ (1,001)
Additional paid-in capital 1,001
-----------
Total $ -
===========
8
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
To the Shareholders' of
Senesco, Inc.
(a development stage company)
I have audited the accompanying balance sheet of Senesco, Inc. (a development
stage company) as at December 9, 1998, and the related statement of operations,
cash flows and stockholders' equity and cash flows for the period from
inception, November 25, 1998, to December 9, 1998. These financial statements
are the responsibility of the Company's management. My responsibility is to
express an opinion on these financial statements based on our audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for our opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Senesco, Inc. (a development stage
company) as at December 9, 1998 and the results of its operations, cash flows
and stockholders' equity for the period from inception, November 25, 1998, to
December 9, 1998 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Senesco,
Inc. ( a development stage company) will continue as a going concern. As more
fully described in Note 2, the Company has incurred operating losses since
inception and requires additional capital to continue operations. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans as to these matters are described in Note 2.
The financial statements do not include any adjustments to reflect the possible
effects on the recoverability and classification of assets or the amounts and
classifications of liabilities that may result from the possible inability of
Senesco, Inc. (a development stage company) to continue as a going concern.
/s/ Thomas Monahan
- ------------------
December 21, 1998
<PAGE>
SENESCO, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 9, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current assets
Cash and cash equivalents $ -0-
---------
Current assets -0-
Other assets
Patent costs 16,417
---------
Total other assets 16,417
---------
Total assets $ 16,417
=========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<S> <C>
Current liabilities
Accrued expenses $ 36,417
---------
Total current liabilities 36,417
Stockholders' equity
Common Stock authorized 2,000,000 shares, no-par value each. 89,110
At December 9, 1998, there are 1,700,000 shares outstanding
Deficit accumulated during development stage (109,110)
---------
Total stockholders' equity (20,000)
---------
Total liabilities and stockholders' equity $ 16,417
=========
</TABLE>
F-2
<PAGE>
SENESCO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, NOVEMBER 25, 1998, TO DECEMBER 9, 1998
<TABLE>
<CAPTION>
<S> <C>
Revenue $ -0-
Cost of goods sold -0-
Gross profit -0-
----------
Operations:
General and administrative 109,110
Depreciation and amortization -0-
----------
Total expense 109,110
Income (loss) (109,110)
----------
Net income (loss) per share -basic $ (0.06)
==========
Number of shares outstanding-basic 1,700,000
==========
</TABLE>
See accompanying notes to financial statements.
F3
<PAGE>
SENESCO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE PERIOD FROM INCEPTION, NOVEMBER 25, 1998, TO DECEMBER 9, 1998
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(109,110)
Depreciation -0-
Adjustments to reconcile net income (loss) to net cash
Accrued expenses 36,417
---------
TOTAL CASH FLOWS FROM OPERATIONS (72,693)
CASH FLOWS FROM INVESTING ACTIVITIES
Patent costs (16,417)
---------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (16,417)
CASH FLOWS FROM FINANCING ACTIVITIES
Members' equity contribution 89,110
---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 89,110
NET INCREASE (DECREASE) IN CASH -0-
CASH BALANCE BEGINNING OF PERIOD -0-
CASH BALANCE END OF PERIOD $ -0-
---------
</TABLE>
See accompanying notes to financial statements
F4
<PAGE>
SENESCO, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS EQUITY)
<TABLE>
<CAPTION>
Deficit accumulated
Common Common during development
Date Stock Stock stage Total
- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C>
12-09-1998 1,700,000 $89,110 $(109,110) $(20,000)
</TABLE>
See accompanying notes to financial statements
F5
<PAGE>
SENESCO, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
December 9, 1998
NOTE 1. ORGANIZATION OF COMPANY AND ISSUANCE OF COMMON STOCK
----------------------------------------------------
a. Creation of the Company
Senesco, Inc., (the "Company") was formed under the laws of New Jersey on
November 25, 1998 and is authorized to issue 2,00,000 shares of common stock,
no-par value each.
b. Description of the Company
The Company is a development stage company that was organized as a
predecessor to Senesco, LLC ("Senesco") to commercially exploit technology
acquired and developed in connection with the identification and
characterization of a gene which controls the aging of fruits, vegetables and
flowers.
c. Issuance of Shares of Common Stock
On December 9, 1998, the Company issued 1,700,000 shares of common stock to
the Members of Senesco in exchange for Senesco's assets and the interests and
rights to Senesco's technologies and patents. The transaction, which was
consummated on December 9, 1998 was treated using the pooling of interest method
of accounting with the historic costs attributed to Senesco, LLC for the period
of June 25 to December 9, 1998 combined with the historic costs of the Company
being the basis of the transfer of account balances to the Company.
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
a. Basis of Financial Statement Presentation
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. On June 25, 1998, Senesco acquired
a certain patent application. Neither the Company or Senesco has generated any
income and has been dependent upon management to pay the expenses to maintain
the Company's existence and pay the costs of acquiring the patent. These factors
indicate that the Company's continuation as a going concern is dependent upon
its ability to obtain adequate financing.
The financial statements presented consist of the balance sheet of the
Company as at December 9, 1998 and the related statements of operations and
cash flows for the period from inception, November 25, 1998, to December 9, 1998
and have been retroactively restated to include the combined statements of
operations and cash flows for Senesco, LLC for the period from inception June
25, 1998 to December 9, 1998 as if the entities had been combined for all
periods presented.
b. Cash and cash equivalents
The Company treats temporary investments with a maturity of less than three
months as cash.
F6
<PAGE>
SENESCO, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
December 9, 1998
c. Revenue recognition
Revenue is recognized when products are shipped or services are rendered.
d. Selling and Marketing Costs
Selling and Marketing - Certain selling and marketing costs are expensed in
the period in which the cost pertains. Other selling and marketing costs are
expensed as incurred.
e. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
f. Asset Impairment
The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. There
was no effect of such adoption on the Company's financial position or results of
operations.
g. Research and Development Expenses
Research and development expenses are charged to operations when incurred.
h. Patent Costs
Costs incurred to acquire exclusive licenses of patentable
technology are capitalized and amortized over the shorter of a five year period
or the term of the license or patent. The portion of these amounts determined
to be attributable to patents is amortized over their remaining lives and
the remainder is amortized over the estimated period of benefit but not more
than 40 years on a straight line basis.
NOTE 3 - TRANSFER OF ASSETS
The Company entered into an Agreement and Plan of Merger (the "Agreement")
on November 30, 1998 which was consummated on December 9, 1998, with Senesco,
pursuant to which the Company exchanged all the membership interests in Senesco
for an aggregate of 1,700,000 shares of common stock of the Company. The shares
of common stock were divided amongst the Members of Senesco in the same ratio as
the Membership interests. Mr. Phillippe Escaravage is the President of Senesco,
Inc.
F7
<PAGE>
SENESCO, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
December 9, 1998
The transaction has been accounted for as a transfer and is accounted for
at historical cost as a pooling of interests with the recording of the net
assets acquired at their historical book value. the financial statements of the
Company have been retroactively restated to include the combined statements of
operations and cash flows for the period from inception, November 25, 1998, to
December 9, 1998 and the statements of operations and cash flows of Senesco, LLC
for the period from June 25, 1998 to December 9, 1998.
On October 2, 1998, the Company entered into a Letter of Intent with Nava
Leisure USA Inc. ("Leisure"), pursuant to which Leisure would acquire the
assets of the Company through Leisure's subsidiary Nava Leisure Acquisition
Corp. ("Acquisition Corp.") in exchange for 1,700,000 shares of Leisure's common
stock. Acquisition Corp. would be the surviving entity.
As part of the agreement, the Company was to transfer its assets including
the Company's patents, technologies and related agreements from Senesco.
NOTE 4 - MARKETABLE SECURITIES, AVAILABLE FOR SALE
The Company adopted Financial Accounting Standards Board ("FASB") Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities",
which requires that investments in equity securities that have readily
determinable fair values and investments in debt securities be classified in
three categories: held-to-maturity, trading and available-for-sale. Based on the
nature of the assets held by the Company and Management's investment strategy,
the Company's investments have been classified as available-for-sale. Management
determines the appropriate classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date.
Securities classified as available-for-sale are carried at estimated fair
value, as determined by quoted market prices, with unrealized gains and losses,
net of tax, reported in a separate component of stockholders' equity. At
October 31, 1998, the Company had no investments that were classified as
trading or held-to-maturity as defined by the Statement.
NOTE 5 - RELATED PARTY TRANSACTIONS
--------------------------
a. Transfer of Patent
On June 25, 1998, John E. Thompson, Yuwen Hong and Katalin A. Hudak filed a
U.S. Patent Application in connection with the identification and
characterization of a gene which controls the aging of plants. On June 25, 1998,
these individuals assigned their ownership of the patent to this technology
including current and future patents to Senesco in exchange for Membership as
follows: John E. Thompson, 25%; Yuwen Hong, 1% and Katalin A. Hudak, 1 %.
b. Member Contribution
Mr. Phillippe Escaravage caused to be paid on behalf of Senesco, $89,110 in
expenses of Senesco for the period from inception, June 25, 1998, to October 31,
1998. This contributed amount was treated as an increase in Members' Equity in
Senesco.
F8
<PAGE>
SENESCO, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
December 9, 1998
c. Common Management
Mr. Phillippe Escaravage is the Managing Member of the Company, President
of Escaravage Biological Industries, LLC. and President of Senesco.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The Company has acquired through the acquisition of Senesco certain
relationships as follows:
a. Consulting Services
Senesco has accrued $20,000 in consulting fees due Mr. Steven Katz, a
Member, as of October 31, 1998.
b. Consulting Agreement
On June 26, 1998, the Senesco entered into a 3 year exclusive research and
development Consulting Agreement, beginning July 1, 1998, with Dr. John E.
Thompson, Dean of Science at the University of Waterloo, Waterloo, Ontario. The
Consulting Agreement is automatically renewable for 2 additional three-year
terms, unless either of the parties notifies the other with written notice. The
Company is obligated to reimbuse Dr. Thompson for reasonable traveling and
living expenses. Mr. Thompson has agreed to not compete and to assign to the
Company his entire right, title and interest to any inventions or improvements
during the course of this agreement and for a period of 1 year after the
conclusion of this agreement. Dr. Thompson has also agreed to act as an
independent contractor and is not eligible to participate in any benefits
extended by the Company to its employees.
c. Lease of Office Space
The Company subleases office space at 11 Chambers Street, Princeton, New
Jersey from Escaravage Biological Industries, LLC at $400 per month on a month
to month lease.
NOTE 7 - SUBSEQUENT EVENTS
Research Agreement
Subsequent to the date of the financial statements, Senesco entered into a
research agreement with the University of Waterloo, Waterloo, Ontario, Canada,
("Waterloo"), pursuant to which Dr. Thompson will utilize the facilities and
staff at Waterloo University to perform research and development services under
the guidance of Dr. Thompson. Waterloo agrees to assign to Sernesco and the
Company all rights, title and interest to any technology and inventions made,
conceived of or arising this agreement.
F9
<PAGE>
SENESCO, INC.
(A development stage company)
NOTES TO FINANCIAL STATEMENTS
December 9, 1998
NOTE 8 - INCOME TAXES
------------
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of November 30, 1998, the Company had
no material current tax liability, deferred tax assets, or liabilities to impact
on the Company's financial position because the deferred tax asset related to
the Company's net operating loss carryforward and was fully offset by a
valuation allowance.
At November 30, 1998, the Company has net operating loss carry forwards for
income tax purposes of $109,110. This carryforward is available to offset future
taxable income, if any, and expires in the year 2010. The Company's utilization
of this carryforward against future taxable income may become subject to an
annual limitation due to a cumulative change in ownership of the Company of more
than 50 percent.
The components of the net deferred tax asset as of November 30, 1998 are
as follows:
Deferred tax asset:
Net operating loss carry forward $ 37,097
Valuation allowance $(37,097)
--------
Net deferred tax asset $ -0-
========
The Company recognized no income tax benefit for the loss generated in the
period from inception, November 25, 1998 to November 30, 1998.
SFAS No. 109 requires that a valuation allowance be provided if it is more
likely than not that some portion or all of a deferred tax asset will not be
realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.
F10
<PAGE>
EXHIBIT A
<PAGE>
MERGER AGREEMENT
AND
PLAN OF MERGER
THIS MERGER AGREEMENT AND PLAN OF MERGER, (hereinafter referred to as the
"Agreement") is made and entered into this 9th day of October 1998 by and
between NAVA LEISURE USA INC., an Idaho corporation (hereinafter referred to as
"Nava Leisure"), the stockholders of Nava Leisure listed on the signature page
(collectively, the "Principal Stockholders"), NAVA LEISURE ACQUISITION CORP., a
New Jersey corporation (hereinafter referred to as "Acquisition") and SENESCO,
LLC, a New Jersey Limited Liability Company (hereinafter referred to as
"Senesco").
RECITALS
WHEREAS, Nava Leisure and Senesco desire to merge Senesco with and into
Nava Leisure's wholly-owned subsidiary, Acquisition, whereby Acquisition shall
be the surviving entity pursuant to the terms and conditions set forth herein
and whereby the transaction shall qualify as a tax free exchange pursuant to
Section 351 of the Internal Revenue Code ("IRC");
WHEREAS, in furtherance of such combination, the Boards of Directors and/or
managing members of Nava Leisure, Acquisition and Senesco have each approved the
merger of Senesco with and into Acquisition (the "Merger"), upon the terms and
subject to the conditions set forth herein, in accordance with the applicable
provisions of the Idaho Business Corporation Law (the "IBCL"), in the case of
Nava Leisure, and the New Jersey Limited Liability Company Act (the "NJLLCA") in
the case of Senesco.
WHEREAS, the members of Senesco desire to exchange all of their ownership
interest in Senesco for shares of Nava Leisure common stock representing
approximately 63% of the total issued and outstanding common stock of Nava
Leisure on a fully diluted basis and in the respective amounts set forth in
Schedule 1.2 hereto as a tax free exchange pursuant to Section 351 of the IRC;
WHEREAS, the parties hereto desire to reorganize, pursuant to Section
368(a)(1)(A) of the IRC, the management, operations and principal place of
business of Nava Leisure and Acquisition.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants herein contained, the parties hereby
agree as follows:
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ARTICLE I
SECTION 1.1 (a) Merger and Plan of Reorganization. At the Effective Time
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(as defined in Section 1.1(b) hereof), and subject to and upon the terms and
conditions of this Agreement and the NJLLCA, Senesco shall be merged with and
into Acquisition, the separate corporate existence of Senesco shall cease, and
Acquisition shall continue as the surviving corporation. Acquisition after the
Effective Time is sometimes referred to herein as the "Surviving Corporation".
Nava Leisure shall change its name to "Senesco Technologies, Inc.", Acquisition
shall change its name to "Senesco, Inc." and the renamed Acquisition shall
remain a wholly-owned subsidiary of Nava Leisure. As consideration for their
agreement to surrender their ownership interests in Senesco and to approve the
Merger, the members of Senesco shall receive an aggregate of One Million Seven
Hundred Thousand (1,700,000) shares (the "Merger Shares") of authorized but
previously unissued Nava Leisure common stock, par value $0.0005 per share,
post-split as described below in Section 1.3(vi), on a pro rata basis. The
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parties hereto hereby further agree that as promptly as practicable after the
Closing, the necessary steps shall be taken in order to reflect the relocation
of Acquisition's principal place of business to Senesco' facility in Princeton,
New Jersey; and the management and operations of Acquisition will be reorganized
to become engaged in the current business endeavors of Senesco.
(b) The Effective Time. As promptly as practicable after the
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satisfaction or waiver of the conditions set forth in Articles VII, VIII and IX,
the parties hereto shall cause the merger to be consummated by filing the
articles of merger as contemplated by NJLLCA (the "Certificate of Merger"),
together with any required related documents, with the appropriate
administrator, as indicated in the NJLLCA, in such form as required by, and
executed in accordance with the relevant provision of, the NJLLCA. The Merger
shall be effective at the time indicated in such Certificate of Merger (the
"Effective Time").
SECTION 1.2 Issuance of Shares.
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(a) At the Effective Time, Nava Leisure shall cause to be issued and
delivered to the members of Senesco or their designees, stock certificates
evidencing ownership of the Merger Shares in the amounts set forth in Schedule
1.2 hereto.
(b) The Merger Shares to be issued hereunder are deemed "restricted
securities" as defined by Rule 144 promulgated by the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), and the recipients shall represent that they are acquiring
the Merger Shares for investment purposes only and without the intent to make a
further distribution of the Merger Shares. All Merger Shares to be issued under
the terms of this Agreement shall be issued pursuant to exemptions from the
registration requirements of the Securities Act and the rules and regulations
promulgated thereunder. Certificates representing the restricted Merger Shares
shall bear the following, or similar legend:
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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF
SUCH ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED
TO THE SATISFACTION OF THE COMPANY.
SECTION 1.3 Consent of Shareholders and Directors. In anticipation of
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this Agreement and as a condition precedent to the consummation of the Merger,
Nava Leisure shall notice and hold a Special Meeting of Shareholders (the
"Shareholder Meeting") or shall have obtained the unanimous written consent of
its shareholders in accordance with the General Corporation Law of the State of
Idaho and with the Securities Act and all other applicable federal securities
laws and have taken all necessary and requisite action to obtain the consent of
its Shareholders and Directors in order to transact the following business:
(i) To ratify this Agreement, the Merger, and all transactions
contemplated hereby;
(ii) To consider and vote upon a proposal to amend the Articles of
Incorporation of Nava Leisure to change the name of Nava Leisure to "Senesco
Technologies, Inc." or to a similar name to be approved by the shareholders, in
order to more accurately describe the new business of the Company;
(iii) To accept the resignations of the current officers and Board of
Directors of Nava Leisure and appoint and elect the following individuals as
officers and directors of Nava Leisure as of and at the Closing Date:
Phillippe Escaravage (Class A Director), President and
Treasurer
Christopher Forbes (Class A Director)
Steven Katz (Class B Director)
Two Other Nominees (Class A Directors)
Sascha Fedyszyn, Vice President
Christian Ahrens, Secretary
(iv) To consider and vote upon the proposal to amend the By-Laws of Nava
Leisure to create two class of directors: Class A to consist of four (4)
directors each elected to a one-year term and Class B to consist of one (1)
director appointed to a two-year term;
(v) To consider and vote upon the proposal for Nava Leisure to obtain up
to $500,000 in bridge financing (the "Bridge Financing") to support expansion of
its operations in the interim period prior to the completion of the Offering,
such bridge financing to consist of Notes, bearing
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interest at a rate of no more than prime plus 2% per annum and upon such
additional and consistent terms as shall be approved by the Board of Directors
of Nava Leisure.
(vi) To consider and vote upon the proposal to effect a one-for-three
reverse stock split.
(vii) To consider and vote upon the proposal to set aside 500,000 shares
of Nava Leisure common stock for issuance pursuant to one or more stock option
plans to be created and approved by the Board of Directors substantially in the
form attached hereto as Exhibit A.
(viii) To consider and vote upon the proposal to change the state of
incorporation of Nava Leisure to Delaware from Idaho conditioned upon approval
of legal counsel.
SECTION 1.4 Closing. Unless this Agreement shall have been terminated
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pursuant to Section X, and subject to the satisfaction or waiver, if
permissible, of the conditions set forth in Articles VII, VIII and IX, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place (i) at the offices of Kaplan Gottbetter & Levenson, LLP, as promptly
as practicable (and in any event within five business days) after satisfaction
or waiver, if permissible, of the conditions set forth in Articles VII, VIII and
IX or (ii) at such other time, date or place as Senesco and Nava Leisure may
mutually agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF
NAVA LEISURE, ACQUISITION AND THE PRINCIPAL STOCKHOLDERS
As an inducement of Senesco to enter into this Agreement, Nava Leisure and
each Principal Stockholder hereby makes jointly and severally, as of the date
hereof and as of the Closing Date, the following representations and warranties
to the best of their knowledge to Senesco and the Senesco Members except that
each Principal Stockholder makes no representation or warranties with respect to
Sections 2.2(b) and 2.4:
SECTION 2.1 Organization of Nava Leisure. Nava Leisure is a corporation
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duly organized, validly existing and in good standing under the laws of the
State of Idaho, is duly qualified and in good standing as a foreign corporation
in every jurisdiction in which such qualification is necessary, and has the
corporate power and authority to own its properties and assets and to transact
the business in which it is engaged. With the exception of Acquisition, there
are no corporations or other entities with respect to which (i) Nava Leisure
owns any of the outstanding stock or other interests, or (ii) Nava Leisure may
be deemed to be in control. Nava Leisure, Acquisition and the Principal
Stockholders have all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby
and thereby, and except for the approval of this Agreement, the Merger and the
transactions contemplated hereby, or notice thereof, by the shareholders of Nava
Leisure as required by the IBCL
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and the federal securities laws, have taken all corporate or other action
necessary to consummate the transactions contemplated hereby and thereby and to
perform its obligations hereunder and thereunder. This Agreement upon its
execution and delivery, is the legal, valid and binding obligation of Nava
Leisure and Acquisition, enforceable against Nava Leisure and Acquisition in
accordance with its respective terms except to the extent that such enforcement
may be limited by applicable bankruptcy, insolvency and other similar laws
affecting creditors' rights generally.
Acquisition is a corporation duly organized, validly existing and in good
standing under the laws of the State of New Jersey, is duly qualified and in
good standing as a foreign corporation in every jurisdiction in which such
qualification is necessary, and has the corporate power and authority to own its
properties and assets and to transact the business in which it is engaged.
There are no corporations or other entities with respect to which (i)
Acquisition owns any of the outstanding stock or other interests, or (ii)
Acquisition may be deemed to be in control.
SECTION 2.2 Capitalization of Nava Leisure and Acquisition. (a) The
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authorized capital stock of Nava Leisure consists of 50 million (50,000,000)
shares of common stock, par value $0.0005 per share (the "Common Stock"), of
which three million twenty five, (3,000,025) shares of Common Stock are issued
and outstanding, and five million (5,000,000) shares of preferred stock, par
value $0.001 per share, with such rights, privileges, preferences and other
terms and conditions as shall be approved by its Board of Directors pursuant to
a duly adopted resolution thereof, of which no shares are issued and
outstanding. All shares of Common Stock currently issued and outstanding have
been duly authorized and validly issued and are fully paid and non-assessable,
and have been issued in compliance with any and all applicable federal and state
laws or pursuant to appropriate exemptions therefrom. There are no options,
warrants, rights, calls, commitments or agreements of any character obligating
Nava Leisure to issue any shares of its capital stock or other securities or any
security representing the right to purchase or otherwise receive any such stock
or other securities. The Merger Shares, when issued, will be duly authorized,
validly issued, fully paid and non-assessable.
(b) Schedule 2.2(a) sets forth the name of each holder of shares
of Common Stock, as well as the number of shares of Common Stock held by each
such holder as of October 8, 1998.
(c) Other than the transactions contemplated by this Agreement,
there is no outstanding vote, plan, pending proposal or right of any person to
cause any redemption of Common Stock or the merger or consolidation of Nava
Leisure with or into any other entity. Nava Leisure is not under any obligation
under any agreement to register any of its securities under federal or state
securities laws.
(d) There are no agreements among stockholders of Nava Leisure, or
otherwise, voting trusts, proxies or other agreements or understanding of any
character, whether written or oral, with respect to or concerning the purchase,
sale, transfer or voting of the Common Stock or any other security of Nava
Leisure.
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(e) None of Nava Leisure or any Principal Stockholders have any
legal obligations, absolute or contingent, to any other Person to sell the
Assets or to sell any capital stock or any other security of Nava Leisure or any
of its Subsidiaries or to effect any merger, consolidation or other
reorganization of Nava Leisure or any of its Subsidiaries or to enter into any
agreement with respect thereto, except pursuant to this Agreement.
Acquisition, a New Jersey corporation is the only subsidiary of Nava
Leisure. Acquisition is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation. There are
two hundred (200) shares of common stock, without par, (the "Acquisition Stock")
of Acquisition authorized, which are all outstanding and held by Nava Leisure.
The Acquisition Stock was validly issued, fully paid and non-assessable and not
subject to any preemptive rights created by statute, Acquisitions' Certificate
of Incorporation or bylaws or any contract. There is no outstanding vote, plan,
pending proposal or right of any person to cover any redemption of the
Acquisition Stock as for the merger or consolidation of Acquisition with or into
any other entity, except as contemplated hereby. Acquisition holds no assets
and conducts no business.
SECTION 2.3 Charter Documents. Certified copies of the Nava Leisure and
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Acquisition Certificate and Articles of Incorporation and By-Laws, as amended to
date, have been or will be delivered to Senesco prior to the Closing are true,
correct and complete copies thereof.
SECTION 2.4 Corporate Documents. The Nava Leisure shareholders' list as
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set forth on Schedule 2.2(a) and corporate minute books are complete and
accurate as of the date hereof and the corporate minute books contain the
recorded minutes of all corporate meetings or the written consents of
shareholders and directors.
SECTION 2.5 Financial Statements. (a) Nava Leisure's audited financial
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statements (the "Nava Leisure Financial Statements") for the years ended June
30, 1997 and 1998, copies of which have been delivered to Senesco, are true and
complete in all material respects, having been prepared in accordance with
generally accepted accounting principles applied on a consistent basis for the
period covered by such statements, and fairly present, in accordance with
generally accepted accounting principles, the financial condition of Nava
Leisure, and results of its operations for the periods covered thereby. Nava
Leisure and each of its subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed with management's authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in accordance with GAAP
and to maintain accountability for assets, (iii) access to assets is permitted
only in accordance with management's authorizations and (iv) the recorded
accountability for assets if compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any difference.
Neither Nava Leisure nor any of its subsidiaries has engaged in any transaction,
maintained any back account or used any corporate funds except for transactions
bank accounts or funds which have been and are reflected in the normally
maintained books and records. Except as otherwise disclosed to Senesco in
writing and as set forth herein, there
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has been no material adverse change in the business operations, assets,
properties, prospects or condition (financial or otherwise) of Nava Leisure
taken as a whole from that reflected in the financial statements referred to in
this Section 2.5.
(b) SEC Documents. Nava Leisure has furnished Senesco with a true
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and complete copy of each report, schedule, registration statement and
definitive proxy statement filed by Nava Leisure with the SEC since January 1,
1994 (as such documents have since the time of their filing been a mended, the
"Nava Leisure SEC Documents") and since that date Nava Leisure has filed with
the SEC all documents required to be filed pursuant to Section 15(d) of the
Exchange Act of 1934, as amended (the "Exchange Act"). As of their respective
dates, the Nava Leisure SEC Documents complied in all material respects with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
or the Exchange Act, as the case may be, and the rules and regulations of the
SEC thereunder applicable to such Nava Leisure SEC Documents, and none of the
Nava Leisure SEC Documents contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The financial statements of Nava Leisure included in the
Nava Leisure SEC Documents comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, are accurate, complete and in accordance with
the books and records of Nava Leisure, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto or, in the
case of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to normal,
recurring audit adjustments) the consolidated financial position of Nava Leisure
as at the dates thereof and the consolidated results of its operations and cash
flows for the periods then ended.
SECTION 2.6 Absence of Certain Changes or Events. Since the date of the
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latest Nava Leisure financial statement and except as disclosed otherwise
herein, Nava Leisure has not (i) issued or sold any promissory note, stock,
bond, option or other security of which it was an issuer or other obligor, (ii)
discharged or satisfied any lien or encumbrance or paid any obligation or
liability, absolute or contingent, direct or indirect, (iii) incurred or
suffered to be incurred any liability or obligation whatsoever, (iv) cause or
permitted any lien, encumbrance or security interest to be created or arise on
or in any of its properties or assets, (v) declared or made any dividend,
payment or distribution to stockholders or purchased or redeemed or agreed to
purchase or redeem any shares of its capital stock, (vi) reclassified its shares
of capital stock, (vii) amended its Certificate of Incorporation or Bylaws,
(viii) acquired any equity interest in any other Person, or (ix) entered into
any agreement or transaction except in connection with the execution and
performance of this Agreement. Neither Nava Leisure nor Acquisition, has
entered into any Agreement to do any of the foregoing action described in this
Section 2.6.
SECTION 2.7 Assets and Liabilities. Nava Leisure has good and marketable
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title to all of its assets and property, free and clear of any and all liens,
claims and encumbrances. As of the date hereof, Nava Leisure does not have any
debts, liabilities or obligations of any nature, whether
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accrued, absolute, contingent, or otherwise, whether due or to become due, that
are not fully reflected in the Nava Leisure Financial Statements.
Acquisition has no assets and no liabilities.
SECTION 2.8 Tax Returns and Payments. All of Nava Leisure's tax returns
------------------------
(Federal, state, city, county or foreign) which are required by law to be filed
on or before the date of this Agreement, have been duly filed and are complete
and accurate in all respects. Nava Leisure has paid all taxes due on said
returns, any assessments made against Nava Leisure and all other taxes, fees and
similar charges imposed on Nava Leisure by any governmental authority (other
than those, the amount or validity of which is being contested in good faith by
appropriate proceedings). No tax liens have been filed and no claims are being
assessed with respect to any such taxes, fees or other similar charges. Nava
Leisure and Acquisition knows of (i) no other tax returns or reports which are
required to be filed which have not been so filed and (ii) no unpaid assessment
for additional taxes for any fiscal period or any basis thereof.
Acquisition which was formed on October 9, 1998 has not filed, and has not
yet been required to file any tax return.
SECTION 2.9 Required Authorizations. There have been or will be timely
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filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Nava Leisure
or the consummation by it of the transactions contemplated hereby. Prior to the
Closing, a majority of the shareholders of Nava Leisure and Acquisition shall
have approved this Agreement and the transactions contemplated hereunder and
appropriate corporate filings shall have been made with the States of Idaho and
New Jersey, as required.
SECTION 2.10 Compliance with Law and Government Regulations. Nava Leisure
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and Acquisition are in compliance with and are not in violation of, applicable
federal, state, local or foreign statutes, laws and regulations (including
without limitation, any applicable building, zoning or other law, ordinance or
regulation) affecting Nava Leisure, Acquisition, or either of its properties or
the operation of its businesses. Nava Leisure and Acquisition are not subject
to any order, decree, judgment or other sanction of any court, administrative
agency or other tribunal.
SECTION 2.11 Litigation. Except as set forth on Schedule 2.11, there is no
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litigation, arbitration, proceeding or investigation pending, threatened or
anticipated to which Nava Leisure or Acquisition is a party or which may result
in any material change in the business or condition, financial or otherwise, of
Nava Leisure or Acquisition or in any of its properties or assets, or which
might result in any liability on the part of Nava Leisure or Acquisition, or
which questions the validity of this Agreement or of any action taken or to be
taken pursuant to or in connection with the provisions of this Agreement, and to
the best knowledge of Nava Leisure and Acquisition, there is no basis for any
such litigation, arbitration, proceeding or investigation. There are presently
no outstanding judgments, decrees or orders of any court or any governmental or
administrative agency
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against or affecting Nava Leisure or Acquisition or any of either of their
assets that is not disclosed herein. Schedule 2.11 contains a complete and
accurate description of all claims, suits, litigations, proceedings,
investigations, dispites, writs, injunctions, judgments and decrees since
January 1, 1992 to which Nava Leisure has been a party.
SECTION 2.12 Trade Names and Rights. Nava Leisure does not use any trade
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mark, service mark, trade name, or copyright in its business, nor does it own
any trade marks, trade mark registrations or applications, trade names, service
marks, copyrights, copyright registrations or applications. To the knowledge of
Nava Leisure and Acquisition, no person owns any trade mark, trade mark
registration or application, service mark, trade name, copyright or copyright
registration or application, the use of which is necessary or contemplated in
connection with the operation of Nava Leisure's business.
SECTION 2.13 Governmental Consent. No consent, approval, authorization or
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order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of Nava Leisure is required in
connection with the execution and delivery of this Agreement or the carrying out
of any transactions contemplated hereby with the exception of the necessary
corporate filings with the State of New Jersey relating to the proposed exchange
of shares.
SECTION 2.14 Authority. Nava Leisure has full power, authority and legal
---------
right to enter into this Agreement and to consummate the transactions
contemplated hereby and thereby, and except for the approval of this Agreement,
the Merger and the transactions contemplated hereby, or notice thereof, by the
shareholders of Nava Leisure as required by the IBCL and the federal securities
laws, has taken all corporate or other action necessary to consummate the
transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. This Agreement upon its execution and delivery, is
the legal, valid and binding obligation of Nava Leisure and Acquisition,
enforceable against Nava Leisure and Acquisition in accordance with its
respective terms except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
SECTION 2.15 No Disqualifying Orders. Neither Nava Leisure, Acquisition,
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the Principal Stockholders nor any of its affiliates, directors, officers or
principals is subject to any disqualifying order under the "Bad Boy" provisions
of the federal or any state's securities law. As used herein, "Bad Boy"
provisions include Rule 262 of Regulation A, Rule 507 of Regulation D and other
similar disqualifying provisions of federal and state securities laws.
SECTION 2.16 Business. Nava Leisure and Acquisition: (i) do not own or
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lease any real property or personal property; (ii) are not a party to any
contract; (iii) have no employees or anyone who acts as an employee; (iv) have
only the bank accounts listed on Schedule 2.16 hereto; (v) are not required to
have any Permits.
SECTION 2.17 No Conflict or Violation: Consent. None of the execution,
---------------------------------
delivery or performance of this Agreement, the consummation of the transactions
contemplated hereby or
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thereby, nor compliance by Nava Leisure or any Principal Stockholder with any of
the provisions hereof or thereof, will (a) violate or conflict with any
provision of the governing documents of Nava Leisure, any of its subsidiaries or
any Principal Stockholder, (b) violate, conflict with, or result in a breach of
or constitute a default (with or without notice of passage of time) under, or
result in the termination of, or accelerate the performance required by, or
result in a right to terminate, accelerate, modify or cancel under, or require a
notice under, or result in the creation of any Encumbrance upon any of its
respective assets under, any contract, lease, sublease, license, sublicense,
franchise, permit, indenture, agreement or mortgage for borrowed money,
instrument of indebtedness, security interest or the arrangement to which Nava
Leisure, any of its subsidiaries or any Principal Stockholder is a party or by
which Nava Leisure, any of its subsidiaries or any Principal Stockholder is
bound or to which any of its respective assets are subject, (c) violate any
applicable regulation or court order or (d) impose any encumbrance on any
assets. No notices to, declaration, filing or registration with, approvals or
consents of, or assignments by, any Person (including any federal, state or
local governmental or administrative authorities) are necessary to be made or
obtained by Nava Leisure, any of its subsidiaries or any Principal Stockholder
in connection with the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated hereby or thereby.
SECTION 2.18 Full Disclosure. None of the representations and warranties
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made by Nava Leisure or Acquisition herein, or in any exhibit, certificate or
memorandum furnished or to be furnished by Nava Leisure or Acquisition on its
behalf pursuant hereto, contains or will contain any untrue statement of
material fact, or omits any material fact, the omission of which would be
misleading. The information with respect to Nava Leisure and Senesco which is
to be included in any information statement or proxy statement to be sent to the
shareholders of Nava Leisure will not contain any untrue statement of material
fact, or omit to state any material fact necessary to make the statement or fact
contained herein not misleading.
SECTION 2.19 Brokerage. No broker, finder or investment banker is entitled
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to any brokerage, finder's or other fee or commission in connection with the
Merger based upon arrangements made by or on behalf of Nava Leisure or
Acquisition.
SECTION 2.20 Transactions with Affiliates. No director or officer of Nava
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Leisure or any member of his or her immediate family, is a party to any contract
or other business arrangement or relationship of any kind with Nava Leisure has
an ownership interest in any business, corporate or otherwise, which is a party
to, or in any property which is the subject of, business arrangements or
relationships of any kind with Nava Leisure.
SECTION 2.21 Environmental Matters.
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(i) Nava Leisure is in compliance with all Environmental
Laws (as defined below);
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(ii) Nava Leisure has no knowledge of an existing or
potential Environmental Claim (as defined below), nor has Nava Leisure or any
Principal Stockholder received any notification or knowledge of alleged, actual
or potential responsibility for, or any inquiry or investigation regarding, any
disposal, release, or threatened release at any location of any Hazardous
Substance (as defined below) stored, generated or transported by Nava Leisure;
(iii) (A) no underground tank or other underground storage
receptacle for Hazardous Substance has leaked from any underground tank or
related piping at any time; and (B) there have been no releases of Hazardous
Substances by Nava Leisure on, upon or into any properties of Nava Leisure or
any of its predecessors;
(iv) There has never been any PCBs or asbestos located at or
on any owned or leased property by Nava Leisure or any of its predecessors;
(v) No environmental lien has ever been attached to any
real property owned or leased by Nava Leisure or any of its predecessors;
(vi) Definitions. For purposes of this Agreement,
"Environmental Laws" shall mean all federal, state, district, local and foreign
laws, all rules or regulations promulgated thereunder, and all orders, consent
orders, judgments, notices, permits, or demand letters issued, promulgated, or
entered pursuant thereto, relating to pollution or protection of the environment
(including without limitation ambient air, surface water, ground water, land
surface, or subsurface strata), including without limitation (x) laws relating
to emissions, discharges, releases or threatened releases, or threatened
releases of pollutants, contaminants, chemicals, materials, wastes or other
substances into the environment and (y) laws relating to the identification,
generation, manufacture, processing, distribution, use, treatment, storage,
disposal, recovery, transport or other handling of pollutants, contaminants,
chemicals, industrial materials, wastes or other substances.
For purposes of this Agreement, "Environmental Claims" shall mean all
accusations, allegations, notice of violations, liens, claims, demands, suits or
causes of action or any damage, including without limitation, personal injury,
property damage (including any depreciation of property values), lost use of
property, or consequential damages, arising directly or indirectly out of
Environmental Conditions or Environmental Laws.
For purposes of this Agreement, "Environmental Conditions" shall mean the
state of environment, including natural resources (e.g. flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata, or ambient air, relating to or arising out of the use,
handling, storage, treatment, recycling, generation, transportation, release,
spilling, leaking, pumping, pouring, emptying, discharging, injection, escaping,
leaching, disposal, dumping, or threatened release of Hazardous Substances by
any Consolidated Entity or its predecessors or such predecessors in interest,
agents, representatives, employees, or independent contracts.
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For purposes of this Agreement, "Hazardous Substances" shall mean all
pollutants, contaminants, chemicals, wastes, and any other carcinogenic,
ignitable, corrosive, reactive, toxic, or otherwise hazardous substances or
materials (whether solids, liquids or gases), including but not limited to any
substances, materials, or wastes subject to regulation, control, or remediation
under Environmental Laws.
ARTICLE III
COVENANTS OF NAVA LEISURE, ACQUISITION AND
THE PRINCIPAL STOCKHOLDERS
SECTION 3.1 Conduct Prior to the Closing. Between the date hereof and
----------------------------
the Closing, other than actions or transactions referred to herein:
(a) Nava Leisure and Acquisition will not enter into any material
agreement, contract or commitment, whether written or oral, or engage in any
transaction, without the prior written consent of Senesco;
(b) Nava Leisure and Acquisition will not pay, incur or declare any
dividends or distributions with respect to its capital stock or amend its
Articles of Incorporation or By-Laws, without the prior written consent of
Senesco;
(c) Nava Leisure and Acquisition will not authorize, issue, sell, purchase
or redeem any shares of its capital stock or any options or other rights to
acquire its capital stock, without the prior written consent of Senesco;
(d) Nava Leisure and Acquisition will comply with all requirements which
federal or state law may impose on it with respect to this Agreement and the
transactions contemplated hereby, and will promptly cooperate with and furnish
written information to Senesco in connection with any such requirements imposed
upon the parties hereto in connection therewith and will provide Senesco with
the opportunity to review and approve any mailing or proxy to be delivered to
stockholders of Nava;
(e) Nava Leisure and Acquisition will not incur any indebtedness for money
borrowed, or issue or sell any debt securities, incur or suffer to be incurred
any liability or obligation of any nature whatsoever, or cause or permit any
lien, encumbrance or security interest to be created or arise on or in any of
its properties or assets, acquire or dispose of fixed assets change employment
terms, enter into any material or long-term contract, guarantee obligations of
any third party, settle or discharge any balance sheet receivable for less than
its stated amount or enter into any other transaction other than in the regular
course of business, except to comply with the terms of this Agreement, without
the prior written consent of Senesco.
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(f) Nava Leisure and Acquisition will not make any investment of capital
nature either buy purchased stock or securities, contribution to capital,
property transfer or otherwise, or by the purchase of any property or assets of
any other Person.
(g) Nava Leisure and Acquisition will not enter into any contract
whatsoever, including any employment contract or any other compensation
arrangement.
(h) Nava Leisure and Acquisition will not do any other act which would
cause representation or warranty of Nava Leisure in this Agreement to be or
become untrue in any material respect or that is not in the ordinary course of
business consistent with past practice.
(i) Neither Nava leisure nor any Principal Stockholder shall directly or
indirectly (a) solicit any inquiry or proposals or enter into or continue any
discussions, negotiation or agreements relating to (i) the sale or exchange of
Nava Leisure or Acquisition's capital stock (ii) the merger of Nava Leisure or
Acquisition with any Person other than Senesco or (b) provide any assistance or
any information to other otherwise cooperate with any Person in connection with
any such inquiry, proposal or transaction.
(j) Nava Leisure and Acquisition shall grant to Senesco and its counsel,
accountants and other representatives, full access during normal business hours
during the period to the Closing to all of its respective properties, books,
contracts, commitments and records and, during such period, furnish promptly to
Senesco and such representatives all information relating to Nava Leisure as
Senesco may reasonably request, and shall extend to Senesco the opportunity to
meet with Nava Leisure's accountants and attorneys to discuss the financial
condition of Nava Leisure; and
(k) Except for the transactions contemplated by this Agreement, Nava
Leisure and Acquisition will conduct its business in the normal course, and
shall not sell, pledge or assign any of its assets without the prior written
consent of Senesco.
SECTION 3.2 Affirmative Covenants. Prior to Closing, Nava Leisure will
---------------------
do the following:
(a) Use its best efforts to accomplish all actions necessary to consummate
this Agreement, including satisfaction of all conditions contained in this
Agreement;
(b) Promptly notify Senesco in writing of any material adverse change in
the financial condition, business, operations or key personnel of Nava Leisure
or Acquisition, any threatened material litigation or investigation, any breach
of its representations or warranties contained herein, and any material
contract, agreement, license or other agreement which, if in effect on the date
of this Agreement, should have been included in this Agreement or in an exhibit
annexed hereto and made a part hereof;
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(c) Use its best efforts to obtain approval of this Agreement from its
shareholders and otherwise satisfy all consents of or notices to its
shareholders under federal and state securities laws and state corporate law.
(d) Obtain the written resignations of its existing officers and Directors
and nominate by the consent of its shareholders a new Board of Directors, whose
nominees are listed in Section 1.3(iii), which shall be effective upon the
Closing or upon such earlier date as the consent of the shareholders shall
state; and
(e) Obtain the Bridge Financing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
SENESCO
Senesco hereby represents, warrants and agrees that:
SECTION 4.1 Organization of Senesco. Senesco is a Limited Liability
-----------------------
Company duly organized, validly existing and in good standing under the laws of
the State of New Jersey, is duly qualified or will become duly qualified and in
good standing in every jurisdiction in which such qualification is necessary.
There are no corporations or other entities with respect to which (i) Senesco
owns any of the outstanding stock or other interests, or (ii) Senesco may be
deemed to be in control except as otherwise disclosed in Schedule 4.1 annexed
hereto and by this reference made a part hereof.
SECTION 4.2 Ownership. Senesco is owned by nine (9) members. There are
---------
no options, warrants, rights, calls, commitments or agreements of any character
obligating Senesco to issue any units of ownership except as otherwise disclosed
in Schedule 4.2 annexed hereto and by this reference made a part hereof.
Attached hereto as Exhibit 4.2 is a list of all of the members of Senesco
certified by the Managing Member of Senesco.
SECTION 4.3 Charter Documents. Complete and correct copies of the
------------------
Certificate of Formation and Operating Agreement of Senesco and all amendments
thereto, have been or will be delivered to Nava Leisure prior to the Closing.
SECTION 4.4 Financial Statements, Assets and Liabilities. Senesco's
--------------------------------------------
unaudited financial statements for the stub period from inception to and through
the period ending September 30, 1998, have been or will be delivered to Nava
Leisure and are true and complete in all material aspects. Senesco has good and
marketable title to all of its assets and property to be delivered to Nava
Leisure hereunder free and clear of any and all liens, claims and encumbrances,
except as may be otherwise set forth herein and in its financial statements.
Nava Leisure and each of its Subsidiaries maintains
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a system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed with management's authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP and to maintain accountability for assets,
(ii) access to assets is permitted only in accordance with management's
authorizations and (iv) the recorded accountability for assets if compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any difference. Neither Nava Leisure nor any of its Subsidiaries has
engaged in any transaction, maintained any back account or used any corporate
funds except for transactions bank accounts or funds which have been and are
reflected in the normally maintained Books and Records.
SECTION 4.5 Absence of Certain Changes or Events. Since the date of the
------------------------------------
latest Senesco financial statement and except as disclosed otherwise herein,
Senesco has not (i) issued or sold any promissory note, unit of ownership or
membership, bond, option or other security of which it was an issuer or other
obligor, (ii) discharged or satisfied any lien or encumbrance or paid any
obligation or liability, absolute or contingent, direct or indirect, except in
the ordinary course of its business, (iii) incurred or suffered to be incurred
any liability or obligation whatsoever, except in the ordinary course of its
business, (iv) cause or permitted any lien, encumbrance or security interest to
be created or arise on or in any of its properties or assets, (v) declared or
made any dividend, payment or distribution to members or purchased or redeemed
or agreed to purchase or redeem any member's ownership rights, (vi) reclassified
its shares of capital stock, or (vii) entered into any agreement or transaction
except in connection with the execution and performance of this Agreement.
SECTION 4.6 Tax Returns and Payments. All of Senesco's tax returns
------------------------
(Federal, state, city, county or foreign) which are required by law to be filed
on or before the date of this Agreement, have been duly filed or extended with
the appropriate governmental authority and are complete and accurate in all
respects. Senesco has paid all taxes to be due on said returns, any assessments
made against Senesco and all other taxes, fees and similar charges imposed on
Senesco by any governmental authority (other than those, the amount or validity
of which is being contested in good faith by appropriate proceedings). No tax
liens have been filed and no claims are being assessed with respect to any such
taxes, fees or other similar charges. Senesco knows of (i) no other tax returns
or reports which are required to be filed which have not been so filed and (ii)
no unpaid assessment for additional taxes for any fiscal period or any basis
thereof.
SECTION 4.7 Required Authorizations. There have been or will be timely
-----------------------
filed, given, obtained or taken, all applications, notices, consents, approvals,
orders, registrations, qualifications waivers or other actions of any kind
required by virtue of execution and delivery of this Agreement by Senesco or the
consummation by it of the transactions contemplated hereby and appropriate
corporate filings shall have been made in the State of New Jersey, as required.
SECTION 4.8 Compliance with Law and Government Regulations. Senesco is,
----------------------------------------------
to the best of its knowledge, in compliance with all applicable statutes,
regulations, decrees, orders, restrictions, guidelines and standard affecting
its properties and operations, imposed by the United
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States of America or any state to which Senesco is subject, the failure to
comply with which would, either individually or in the aggregate, have a
material adverse effect on the business, finances or prospects of Senesco.
SECTION 4.9 Litigation. There is no litigation, arbitration, proceeding
----------
or investigation pending or threatened to which Senesco is a party or which may
result in any material change in the business of condition, financial or
otherwise, of Senesco or in any of its properties or assets, or which might
result in any liability on the part of Senesco, or which questions the validity
of this Agreement or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement, and to the best knowledge of
Senesco, there is no basis for any such litigation, arbitration, proceeding or
investigation except as otherwise set forth in Schedule 4.9. There are presently
no outstanding judgments, decrees or orders of any court or any governmental or
administrative agency against or affecting Senesco or any of either of their
assets that is not disclosed herein. Schedule 2.11 contains a complete and
accurate description of all claims, suits, litigations, proceedings,
investigations, dispites, writs, injunctions, judgments and decrees since
January 1, 1993 to which Senesco has been a party.
SECTION 4.10 Patents, Trademarks, Trade Names and Rights. Schedule 4.10
-------------------------------------------
annexed hereto and by this reference is made a part hereof, contains a complete
list of all patents, assignments of patents, patent licenses, trademarks,
service marks, trade marks, service mark, trademark and service mark
registrations, applications and licenses with respect to the forgoing owned or
held by Senesco. Senesco has no knowledge of any facts and nothing has come to
its attention that would lead it to believe that it has infringed or
misappropriated or is infringing upon any trademark, copyright, patent or other
similar right of any person. No claim relating thereto is pending or to the
knowledge of Senesco is threatened. Senesco has no knowledge of any rights owned
by third parties in the patents, trademarks and other intellectual property
rights listed in Schedule 4.10, except as set forth in Schedule 4.10.
SECTION 4.11 Governmental Consent. No consent, approval, authorization or
--------------------
order of, or registration, qualification, designation, declaration or filing
with, any governmental authority on the part of Senesco is required in
connection with the execution and delivery of this Agreement or the carrying out
of any transactions contemplated other than filing the Agreement together with
Articles of Merger with the State of New Jersey.
SECTION 4.12 Authority. Senesco and each of its members have approved
---------
this Agreement and duly authorized the execution hereof. Senesco has full power,
authority and legal right to enter into this Agreement on behalf of Senesco and
its members and to consummate the transactions contemplated hereby, and all
corporate action necessary to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby has been
duly and validly taken. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by Senesco
with the provisions hereof will not (a) conflict with or result in a breach of
any provisions of, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or result in the
creation of any
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lien, security interest, charge or encumbrance upon any of the properties or
assets of Senesco under, any of the terms, conditions or provisions of the
Certificate of Formation or Operating Agreement of Senesco, or any note, bond,
mortgage, indenture, license, agreement or any instrument or obligation to which
Senesco is a party or by which it is bound; or (b) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Senesco or any of
its properties or assets.
SECTION 4.13 Investment Purpose. Senesco has received or shall receive
------------------
representations from its members that the recipients of the restricted Nava
Leisure Shares hereunder are acquiring the shares for investment purposes only
and acknowledges that the Nava Leisure Shares issued hereunder are "restricted
securities" and may not be sold, traded or otherwise transferred without
registration under the Securities Act or exemption therefrom.
SECTION 4.14 Nonexistence of Disqualifying Orders. Neither Senesco nor
-------------------------------------
any of its affiliates, directors, officers or principals is subject to any
disqualifying order under the "Bad Boy" provisions of the federal or any state's
securities law which are defined in Section 2.15.
SECTION 4.15 Business. Except as listed on Schedule 4.15, Senesco: (i)
--------
does not own or lease any real property or personal property; (ii) is not a
party to any contract; (iii) has no employees or anyone who acts as an employee;
(iv) is not required to have any Permits.
SECTION 4.16 No Conflict or Violation: Consent. None of the execution,
---------------------------------
delivery or performance of this Agreement, the consummation of the transactions
contemplated hereby or thereby, nor compliance by Senesco with any of the
provisions hereof or thereof, will (a) violate or conflict with any provision of
the governing documents of Senesco, any of its subsidiaries, (b) violate,
conflict with, or result in a breach of or constitute a default (with or without
notice of passage of time) under, or result in the termination of , or
accelerate the performance required by, or result in a right to terminate,
accelerate, modify or cancel under, or require a notice under, or result in the
creation of any Encumbrance upon any of its respective assets under, any
contract, lease, sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, security
interest or the arrangement to which Senesco, any of its Subsidiaries is a party
or by which Senesco, any of its Subsidiaries is bound or to which any of its
respective assets are subject, (c) violate any applicable regulation or court
order or (d) impose any encumbrance on any assets. No notices to, declaration,
filing or registration with, approvals or consents of, or assignments by, any
Person (including any federal, state or local governmental or administrative
authorities) are necessary to be made or obtained by Senesco, any of its
Subsidiaries or any Principal Stockholder in connection with the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.
SECTION 4.17 Full Disclosure. None of the representations and warranties
---------------
made by Senesco herein, or in any exhibit, certificate or memorandum furnished
or to be furnished by, on its behalf pursuant hereto, contains or will contain
any untrue statement of material fact, or omits any material fact, the omission
of which would be misleading.
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SECTION 4.18 Transactions and Affiliates. No member of Senesco or any
---------------------------
member of his or her immediate family, is a party to any contract or other
business arrangement or relationship of any kind with Senesco has an ownership
interest in any business, corporate or otherwise, which is a party to, or in any
property which is the subject of, business arrangements or relationships of any
kind with Senesco.
ARTICLE V
COVENANTS OF SENESCO LLC
SECTION 5.1 Conduct Prior to the Closing. Between the date hereof and
----------------------------
the Closing:
(a) Except within the regular course of business or in connection with its
financing activities previously disclosed to Nava Leisure, Senesco will not
enter into any material agreement, contract or commitment, whether written or
oral, without the prior written consent of Nava Leisure;
(b) Senesco will not pay, incur or declare any dividends or distributions
with respect to its members or amend its Certificate of Formation or Operating
Agreement, without the prior written consent of Nava Leisure;
(c) Senesco will not authorize, issue, sell, purchase, or redeem any units
of ownership or any options or other rights to acquire ownership interests
without the prior written consent of Nava Leisure.
(d) Except within the regular course of business and in its financing
activities previously disclosed to Nava Leisure, Senesco will not incur any
indebtedness for money borrowed or issue any debt securities, or incur or suffer
to be incurred any liability or obligation of any nature whatsoever, or cause or
permit any lien, encumbrance or security interest to be created or arise on or
in any of its properties or assets, without the prior written consent of Nava
Leisure;
(e) Nava Leisure and Acquisition will not make any investment of capital
nature either buy purchased stock or securities, contribution to capital,
property transfer or otherwise, or by the purchase of any property or assets of
any other Person.
(f) Nava Leisure and Acquisition will not do any other act which would
cause representation or warranty of Nava Leisure in this Agreement to be or
become untrue in any material respect or that is not in the ordinary course of
business consistent with past practice.
(g) Neither Nava leisure nor any Principal Stockholder shall directly or
indirectly (a) solicit any inquiry or proposals or enter into or continue any
discussions, negotiation or agreements relating to (i) the sale or exchange of
Nava Leisure or Acquisition's capital stock (ii) the merger of Nava Leisure or
Acquisition with any Person other than Senesco or (b) provide any assistance or
any information to other otherwise cooperate with any Person in connection with
any such inquiry, proposal or transaction.
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(h) Senesco will comply with all requirements which federal or state law
may impose on it with respect to this Agreement and the transactions
contemplated hereby, and will promptly cooperate with and furnish written
information to Nava Leisure in connection with any such requirements imposed
upon the parties hereto in connection therewith;
(i) Senesco shall grant to Nava Leisure and its counsel, accountants and
other representatives, full access during normal business hours during the
period to the Closing to all its respective properties, books, contracts,
commitments and records and, during such period, furnish promptly to Nava
Leisure and such representatives all information relating to Senesco as Nava
Leisure may reasonably request, and shall extend to Nava Leisure the opportunity
to meet with Senesco's accountants and attorneys to discuss the financial
condition of Senesco.
SECTION 5.2 Affirmative Covenants. Prior to Closing, Senesco will do the
---------------------
following:
(a) Use its best efforts to accomplish all actions necessary to consummate
this Agreement, including satisfaction of all conditions contained in this
Agreement; and
(b) Promptly notify Nava Leisure in writing of any material adverse change
in the financial condition, business, operations or key personnel of Senesco,
any threatened material litigation or investigation, any breach of its
representations or warranties contained herein, and any material contract,
agreement, license or other agreement which, if in effect on the date of this
Agreement, should have been included in this Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Expenses. All costs and expenses incurred in connection with
--------
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expense except as provided for in Section 11.1 herein.
SECTION 6.2. Brokers and Finders. Each of the parties hereto represents,
-------------------
as to itself, that no agent, broker, investment banker or firm or person is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee in connection with any of the transactions contemplated by this
Agreement.
SECTION 6.3 Necessary Actions. Subject to the terms and conditions
-----------------
herein provided, each of the parties hereto agree to use all reasonable efforts
to take, or cause to be taken, all action, and to do or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
In the event at any time after the Closing, any further action is necessary or
desirable to carry out the
19
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purpose of this Agreement, the proper managers, officers and/or directors of
Nava Leisure or Senesco, as the case may be, shall take all such necessary
action.
SECTION 6.4 Indemnification.
---------------
(a) General.
-------
(i) Subsequent to the Closing, the Principal Stockholders
shall, jointly and severally, indemnify Senesco, and each of the Senesco Members
("Senesco Indemnified Parties") against, and hold each of the Senesco
Indemnified Parties harmless from any damage, claim, loss, cost, liability or
expense, including without limitation, interest, penalties, reasonable
attorneys' fees and expenses of investigation, diminution of value, response
action, removal action or remedial action (collectively "Damages") incurred by
any such Senesco Indemnified Party, that are incident to, arise out of, in
connection with, or related to, whether directly or indirectly, the breach of
any warranty, representation, covenant or agreement of Nava Leisure or the
Principal Stockholders contained in this Agreement or any schedule hereto or in
any certificate or instrument of conveyance (including, without limitation, any
Notice to be delivered to the shareholders of Nava Leisure) delivered by or on
behalf of Nava Leisure or the Principal Stockholders pursuant to this Agreement
or in connection with the transaction contemplated hereby.
(ii) Subsequent to the Closing, Senesco shall indemnify
Nava Leisure and the Principal Stockholders ("Nava Leisure Indemnified
Parties"), against, and hold each of the Nava Leisure Indemnified Parties
harmless from, any Damages incurred by such Nava Leisure Indemnified Party, that
are incident to, arise out of, in connection with, or related to, whether
directly or indirectly, the breach of any warranty, representation, covenant or
agreement of Senesco contained in this Agreement, any schedule or in any
certificate or instrument of conveyance delivered by or on behalf of Senesco
pursuant to this Agreement or in connection with the transactions contemplated
hereby.
The term "Damages" as used in this Section 6.4 is not limited to
matters asserted by third parties against Senesco Indemnified Parties or Nava
Leisure Indemnified Parties, but includes Damages incurred or sustained by such
persons in the absence of third party claims.
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(b) Procedure for Claims.
(i) If a claim for Damages (a "Claim') is to be made by a
person entitled to indemnification hereunder, the person claiming such
indemnification (the "Indemnified Party"), subject to clause (ii) below, shall
give written notice (a "Claim Notice") to the indemnifying person (the
"Indemnifying Party") as soon as practicable after the Indemnified Party becomes
aware of any fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 6.4. The failure of any
Indemnified Party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except and only to the extent that, the Indemnifying
Party demonstrates actual material damage caused by such failure. In the case of
a Claim involving the assertion of a claim by a third party (whether pursuant to
a lawsuit or other legal action or otherwise, a "Third-Party Claim'), if the
Indemnifying Party shall acknowledge in writing to the Indemnified Party under
the terms of its indemnity hereunder in connection with such Third-Party Claim,
then (A) the Indemnifying party shall be entitled and, if it so elects, shall be
obligated at its own cost, risk and expense, (1) to take control of the defense
and investigation such Third-Party Claim and (2) to pursue the defense thereof
in good faith by appropriate actions or proceedings promptly taken or instituted
and diligently pursued, including, without limitation, to employ and engage
attorneys of its own choice reasonably acceptable to the Indemnified Party to
handle and defend the same, and (B) the Indemnifying Party shall be entitled
(but not obligated), if it so elects, to compromise or settle such claim, which
compromise or settlement shall be made only with the written consent of the
Indemnified Party, such consent not to be unreasonably withheld. In the event
the Indemnifying Party elects to assume control of the defense and investigation
of such lawsuit or other legal action in accordance with this Section 6.4, the
Indemnified Party may, at its own cost and expense, participate in the
investigation, trial and defense of such Third-Party Claim; provided that, if
the named persons to a lawsuit or other legal action include both the
Indemnifying Party and the Indemnified Party and the Indemnified Party has been
advised in writing by counsel that there may be one ore more legal defenses
available such Indemnified Party that are different from or additional to those
available to the Indemnifying Party, the Indemnified Party shall be entitled, at
the Indemnifying Party's cost, risk and expense, to separate counsel of its own
choosing. If the Indemnifying Party fails to assume the defense of such Third-
Party Claim in accordance with this Section 6.4 within 10 calendar days after
receipt of the Claim Notice, the Indemnified Party against which such Third-
Party Claim has been asserted shall upon delivering notice to such effect to the
Indemnifying Party have the right to undertake, at the Indemnifying Party's
cost, risk and expense, the defense, compromise and settlement of such Third-
Party Claim on behalf of and for the account of the Indemnifying Party; provided
that such Third-Party Claim shall not be compromised or settled without the
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. In the event the Indemnifying Party assumes the defense
of the claim, the Indemnifying Party shall keep the Indemnified Party reasonably
informed of the progress of any such defense, compromise or settlement, and in
the event the Indemnified Party assumes the defense of the claim, the
Indemnified Party shall keep the Indemnifying Party reasonably informed of the
progress of any such defense, compromise or settlement. The Indemnifying Party
shall be liable for any settlement of any Third-party Claim effected pursuant to
and in accordance with this Section 6.4 and for any final judgment (subject to
any right of appeal), and the Indemnifying party agrees to indemnify and
21
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hold harmless each Indemnified Party from and against any and all Damages by
reason of such settlement or judgment.
(ii) Notwithstanding clause (i) above, in the event that the
Indemnified Party is a Nava Leisure Indemnified Party, any Claim Notice election
or other notification or correspondence required pursuant to such clause (i)
shall be valid if it is delivered to each Nava Leisure Principal Stockholder
(the "Stockholder Representation"). Each Principal Stockholder hereby
irrevocably appoints the Stockholder Representative as its agent and attorney-
in-fact with respect to the matters set forth in this Section 6.4, and hereby
irrevocably grants to the Stockholder Representative the authority to administer
Claims on behalf of such Stockholder, to exercise such other rights and powers
as are set forth in this Agreement and to enter into, and to bind such
Stockholder with respect to, the settlement of any such Claim. Each Senesco
Indemnified Party shall be entitled to rely on the agreements and
representations of, and notices and other correspondence from, the Stockholder
Representative as such agent and attorney-in-fact in connection with any Claim
by or against any Stockholder pursuant to this Section 6.4.
(c) No Right of Contribution. After the Closing, no Principal
------------------------
Stockholder shall have any right of contribution against the Surviving
Corporation for any breach of any representation, warranty, covenant or
agreement of Nava Leisure. Senesco and Nava Leisure shall be entitled to
specific performance and injunctive relief, without posting bond or other
security, for the purpose of asserting their respective rights under this
Section 6.4. The remedies described in this Section 6.4 shall be in addition to,
and not in lieu of, and any other remedies at law or in equity that the parties
may elect to pursue.
ARTICLE VII
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The obligations of the parties under this Agreement are subject to the
fulfillment and satisfaction of each of the following conditions:
SECTION 7.1 Legal Action. No preliminary or permanent injunction or
------------
other order by any federal or state court which prevents the consummation of
this Agreement or any of the transactions contemplated by this Agreement shall
have been issued and remain in effect.
SECTION 7.2 Absence of Termination. The obligations to consummate the
----------------------
transactions contemplated hereby shall not have been canceled pursuant to
Article X hereof.
SECTION 7.3 Required Approvals. Nava Leisure and Senesco shall have
------------------
received all such approvals, consents, authorizations or modifications as may be
required to permit the performance by Nava Leisure and Senesco of the respective
obligations under this Agreement, and the consummation of the transactions
herein contemplated, whether from governmental authorities or other persons, and
Nava Leisure and Senesco shall each have received any and all permits and
22
<PAGE>
approvals from any regulatory authority having jurisdiction required for the
lawful consummation of this Agreement.
SECTION 7.4 "Blue Sky" Compliance. There shall have been obtained any
---------------------
and all permits, approvals and consents of the appropriate state securities
commissions of any jurisdictions, and of any other governmental body or agency,
which counsel for Nava Leisure or Senesco may reasonably deem necessary or
appropriate so that consummation of the transactions contemplated by this
Agreement may be in compliance with all applicable laws.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF
NAVA LEISURE, ACQUISITION AND THE PRINCIPAL STOCKHOLDERS
All obligations of Nava Leisure under this Agreement are subject to the
fulfillment and satisfaction by Senesco prior to or at the time for Closing, of
each of the following conditions, any one or more of which may be waived by Nava
Leisure.
SECTION 8.1 Representations and Warranties True at Closing. All
----------------------------------------------
representations and warranties of Senesco contained in this Agreement will be
true and correct at and as of the time of the Closing, and Senesco shall have
delivered to Nava Leisure a Manager's Certificate, dated the Closing Date, to
such effect and in the form and substance satisfactory to Nava Leisure, and
signed, in the case of Senesco, by its managing members.
SECTION 8.2 Performance. The obligations of Senesco to be performed on
------------
or before the Closing pursuant to the terms of this Agreement shall be duly
performed at such time, and Senesco shall have delivered to Nava Leisure a
Manager's Certificate, dated the Closing Date, to such effect and in form and
substance satisfactory to Nava Leisure.
SECTION 8.3 Authority. All action required to be taken by, or on the
---------
part of Senesco and its members to authorize the execution, delivery and
performance of this Agreement by Senesco and the consummation of the
transactions contemplated hereby, shall have been duly and validly taken.
SECTION 8.4 Absence of Certain Changes or Events. There shall not have
------------------------------------
occurred, since the date hereof, any adverse change in the business, condition
(financial or otherwise), assets or liabilities of Senesco or any event or
condition of any character adversely affecting Senesco, and it shall have
delivered to Nava Leisure, certificates, dated the Closing Date, to such effect
and in form and substance satisfactory to Nava Leisure and signed, in the case
of Senesco, by its managing members.
23
<PAGE>
SECTION 8.5 Acceptance by Senesco Members. Prior to the Closing, each
-----------------------------
member of Senesco shall have approved this Agreement and agreed to the Merger.
SECTION 8.6 Closing Documents. Senesco shall have delivered to Nava
-----------------
Leisure the documents and other items described in Section 10.2 and such other
documents and items as Nava Leisure shall reasonably request.
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF SENESCO
All obligations of Senesco under this Agreement are subject to the
fulfillment and satisfaction by Nava Leisure, Acquisition and the Principal
Stockholders prior to or at the time of Closing, of each of the following
conditions, any one or more of which may be waived by Senesco.
SECTION 9.1 Representations and Warranties True at Closing. All
----------------------------------------------
representations and warranties of Nava Leisure, Acquisition and the Principal
Stockholders contained in this Agreement will be true and correct at and as of
the time of the Closing, and Nava Leisure and the Principal Stockholders shall
have delivered to Senesco an Officer's Certificate and a Principal Stockholders'
Certificate, each dated the Closing Date, to such effect and in the form and
substance satisfactory to Senesco, and signed, in the case of Nava Leisure, by
its President and Secretary and by each Principal Stockholder.
SECTION 9.2 Performance. The obligations of Nava Leisure, Acquisition and
-----------
the Principal Stockholders to be performed on or before the Closing pursuant to
the terms of this Agreement shall have been duly performed at such time, and
Nava Leisure, Acquisition and the Principal Stockholders shall have delivered to
Senesco an Officer's Certificate and a Principal Stockholders' Certificate, each
dated the Closing Date, to such effect and in form and substance satisfactory
to Senesco, and signed in the case of Nava Leisure and Acquisition by each of
its Presidents and Secretary (a "Nava Closing Certificate" and an "Acquisition
Closing Certificate") and by each Principal Stockholder.
SECTION 9.3 Authority. All action required to be taken by, or on the part
---------
of Nava Leisure and Acquisition and its shareholders and Acquisition to
authorize the execution, delivery and performance of this Agreement by Nava
Leisure and Acquisition and the consummation of the transactions contemplated
hereby, shall have been duly and validly taken.
SECTION 9.4 Absence of Certain Changes or Events. There shall not have
------------------------------------
occurred, since the date hereof, any adverse change in the business, condition
(financial or otherwise), assets or liabilities of Nava Leisure or Acquisition
or any event or condition of any character adversely affecting Nava Leisure or
Acquisition, and it shall have delivered to Senesco, certificates, dated the
Closing Date, to such effect and in form and substance satisfactory to Senesco
and signed, in the case of Nava Leisure and Acquisition, by each of its
respective President and Secretary.
24
<PAGE>
SECTION 9.5 Action by Nava Leisure Shareholders. Prior to the Closing of
-----------------------------------
this Agreement, a majority of the shareholders of Nava Leisure shall have
approved this Agreement and the transactions contemplated hereunder and all of
the proposals set forth in Section 1.3 above. The current directors and
officers of Nava Leisure and Acquisition shall have submitted their resignations
as directors and officers of Nava Leisure effective as of the Closing of this
Agreement.
SECTION 9.6 Employment Agreements. Nava Leisure shall have entered into
---------------------
employment agreements with Phillip O. Escaravage, as President, Sascha P.
Fedyszyn as Vice President and Christian P.R. Ahrens as Secretary, each for a
term of not less than three (3) years and in form and substance satisfactory to
each party.
SECTION 9.7 Indemnification Agreements. Nava Leisure shall have executed
--------------------------
indemnification agreements in favor of all directors of Nava Leisure.
SECTION 9.8 Opinion of Counsel. Nava Leisure shall deliver to Senesco an
------------------
opinion of counsel stating that the transactions contemplated in this Agreement
do not violate any state or federal securities laws.
SECTION 9.9 Closing Documents. Nava Leisure and the Principal
-----------------
Stockholders, as the case may be, shall have delivered to Senesco the documents
and other items described in Section 10.1 and such other documents and items as
Senesco may reasonably require.
SECTION 9.10 Exemption Under Federal and State Securities Laws. The
-------------------------------------------------
issuance of shares of Nava Leisure in the Merger shall not violate any federal
or state securities laws.
SECTION 9.11 Completion of Senesco Diligence. Senesco shall have completed
-------------------------------
its business and legal due diligence to its satisfaction, in its sole judgment.
SECTION 9.12 Stockholder Approval/Notice. Nava Leisure shall have taken
---------------------------
all actions related to the due authorization of the Merger as may be required
under the federal and state law, including the IBCL and federal securities laws.
SECTION 9.13 Board of Directors Approval. The Merger shall have been
---------------------------
approved by appropriate action of the Board of Directors of Nava Leisure.
SECTION 9.14 Bridge Financing. Nava Leisure shall have obtained the Bridge
----------------
Financing.
SECTION 9.15 Directors and Officers Insurance. Nava Leisure shall have
--------------------------------
obtained Directors and Officers insurance on each post-Merger director and
officer.
25
<PAGE>
ARTICLE X
CLOSING
On the Closing Date:
SECTION 10.1 Deliveries by Nava Leisure. Nava Leisure shall deliver (or
--------------------------
cause to be delivered) to Senesco:
(a) any Consents required to be obtained by Nava Leisure and the
Principal Stockholders;
(b) Nava Leisure and Acquisition shall deliver an Officer's
Certificate as described in Sections 9.1, 9.2 and 9.4 hereof, dated the Closing
Date, that all representations, warranties, covenants and conditions set forth
herein by Nava Leisure and Acquisition are true and correct as of, or have been
fully performed and complied with by the Closing Date;
(c) All Nava Leisure company books and records.
(d) an opinion of legal counsel to Nava Leisure dated as of the
Closing Date, in a form reasonably satisfactory to Senesco;
(e) the Merger Shares to be issued to the Senesco Members in
accordance with Section 1.2;
(f) Evidence that this Agreement and the transactions contemplated
hereby have been approved by the stockholders of Nava Leisure;
(g) a certified check made payable to Nava Leisure for the initial
amount of the Bridge Financing;
(h) Certificates of good standing from Idaho and any other state on
which Nava Leisure is required to be qualified to do business;
(i) a Secretaries Certificate of Nava Leisure, in the form and
substance satisfactory to Senesco, attaching thereto the current Certificate of
Incorporation of Nava leisure, bylaws of Nava Leisure and meeting minutes from
all Board and shareholder meetings for the last five years as well as verify
that no other director or stockholder minutes exist and no other director or
stockholder meetings took place;
(j) a waiver executed by H.D. Williams relinquishing all liabilities
owed to him by Nava Leisure, including that in the amount of $22,769;
26
<PAGE>
(k) proof that Nava Leisure has satisfied a debt carried on its
financial statements in the amount of $3,100;
(l) such other documents and certificates duly executed as may
reasonably be requested by Senesco prior to the Closing Date;
SECTION 10.2 Delivered by Senesco. Senesco shall deliver to Nava Leisure:
--------------------
(a) any Consents required to be obtained by Senesco;
(b) Senesco shall deliver a Manager's Certificate as described in
Section 8.1 and 8.2 hereof, dated the Closing Date, that all representations,
warranties, covenants and conditions set forth herein by Senesco are true and
correct as of, or have been, fully performed and complied with by the Closing
Date;
(c) Senesco shall deliver to Nava Leisure all company books and
records;
(d) an opinion of Buchanan Ingersoll, counsel to Senesco, dated as of
the Closing Date, in a form reasonably satisfactory to Senesco;
(e) a Statement signed by all Senesco members stating that
(i) they are the only members of Senesco and own 100% of
Senesco; and
(ii) Escaravage is the duly appointed managing member of Senesco
and has full authority to enter into this Agreement and has
taken all steps necessary to effectuate the merger.
(f) such other documents and certificates duly executed as may
reasonably be requested by Nava Leisure prior to the Closing Date.
SECTION 10.3 Termination. Notwithstanding anything herein or elsewhere to
-----------
the contrary, this Agreement may be terminated:
(a) By mutual agreement of the parties hereto at any time prior to the
Closing;
(b) By the Board of Directors of Nava Leisure at any time prior to the
Closing, if:
(i) a condition to performance by Nava Leisure under this
Agreement or a covenant of Senesco contained herein shall not be
fulfilled on or before the date
27
<PAGE>
of the Closing or at such other time and date specified in this
Agreement for the fulfillment for such covenant or condition; or
(ii) a material default or breach of this Agreement shall be
made by Senesco;
(c) By Senesco at any time prior to the Closing, if:
(i) a condition to Senesco's performance under this Agreement
or a covenant of Nava Leisure or Acquisition contained herein shall
not be fulfilled on or before the date of the Closing or at such other
time and date specified in this Agreement for the fulfillment for such
covenant or condition; or
(ii) a material default or breach of this Agreement shall be
made by Nava Leisure or Acquisition or a Principal Stockholder; or
(d) By either party if it notifies the other that it is not satisfied with
its due diligence review.
SECTION 10.4 Effect of Termination. If this Agreement is terminated, this
---------------------
Agreement, except as to Section 11.1 and Section 11.2, shall no longer be of any
force or effect and there shall be no liability on the part of any party or its
respective directors, officers or stockholders; provided however, that in the
case of a termination pursuant to Section 10.1 (b)(ii) or 10.1(c)(ii) hereof
because of a prior material default under or a material breach of this Agreement
by another party, the damages which the aggrieved party or parties may recover
from the defaulting party or parties shall in no event exceed the amount of out-
of-pocket costs and expenses incurred by such aggravated party or parties in
connection with this Agreement, and no party to this Agreement shall be entitled
to any injunctive relief.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Cost and Expenses. In the event of any termination of this
-----------------
Agreement pursuant to Section 10.1, subject to the provisions of Section 10.2,
Nava Leisure and Senesco will each bear their own respective expenses.
SECTION 11.2 Extension of time: Waivers. At any time prior to the Closing
--------------------------
28
<PAGE>
(a) Nava Leisure may in its sole discretion (i) extend the time for the
performance of any of the obligations or other acts of Senesco, (ii) waive any
inaccuracies in the representations and warranties of Senesco contained herein
or in any documents delivered pursuant hereto by Senesco and (iii) waive
compliance with any of the agreements or conditions contained herein to be
performed by Senesco. Any agreement on the part of Nava Leisure to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of Nava Leisure and shall only be effective in the
specific instance. No waiver or any condition or provision shall be deemed to
be a subsequent waiver of such condition or provision or a waiver of any
condition or provision other than the one specifically waived.
(b) Senesco may in its sole discretion (i) extend the time for the
performance of any of the obligations or other acts of Nava Leisure, (ii) waive
any inaccuracies in the representations and warranties of Nava Leisure contained
herein or in any documents delivered pursuant hereto by Nava Leisure and (iii)
waive compliance with any of the agreements or conditions contained herein to be
performed by Nava Leisure. Any agreement on the part of Senesco to any such
extension or waiver shall be valid only if set forth in an instrument, in
writing, signed on behalf of Senesco and shall only be effective in the
specific instance. No waiver or any condition or provision shall be deemed to
be a subsequent waiver of such condition or provision or a waiver of any
condition or provision other than the one specifically waived.
SECTION 11.3 Notices. Any notice to any party hereto pursuant to this
-------
Agreement shall be in writing and given by Certified or Registered Mail, Fedex
or by facsimile, addressed as follows:
SENESCO, LLC
c/o Buchanan Ingersoll
Professional Corporation
500 College Road East
Princeton, NJ 08540
Attn: David J. Sorin, Esq.
NAVA LEISURE USA, INC. AND
NAVA LEISURE ACQUISITION CORP.
c/o Kaplan Gottbetter & Levenson, LLP
630 Third Avenue
New York, NY 10017
Attn: Adam S. Gottbetter, Esq.
Additional notices are to be given as to each party, at such other address
as should be designated in writing complying as to delivery with the terms of
this Section 11.3. All such notices shall be effective when sent, addressed as
aforesaid.
29
<PAGE>
SECTION 11.4 Parties in Interest. This Agreement shall inure to the
-------------------
benefit of and be binding upon the parties hereto and the respective successors
and assigns. Nothing in this Agreement is intended to confer, expressly or by
implication, upon any other person any rights or remedies under or by reason of
this Agreement.
SECTION 11.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and together shall
constitute one document. The delivery by facsimile of an executed counterpart of
this Agreement shall be deemed to be an original and shall have the full force
and effect of an original executed copy.
SECTION 11.6 Severability. The parties hereto agree and affirm that none
------------
of the provisions herein is dependent upon the validity of any other provision,
and if any part of this Agreement is deemed to be unenforceable, the remainder
of the Agreement shall remain in full force and effect.
SECTION 11.7 Headings. The "Article" and "Section" headings are provided
--------
herein for convenience of reference only and do not constitute a part of this
Agreement.
SECTION 11.8 Survival of Representations and Warranties. All terms,
------------------------------------------
conditions, representations and warranties set forth in this Agreement or in any
instrument, certificate, opinion, or other writing providing for in it, shall
survive the Closing and the delivery of the Nava Leisure Shares issued hereunder
at the Closing, for a period of one year from the Closing regardless of any
investigation made by or on behalf of any of the parties hereto.
SECTION 11.9 Assignability. This Agreement shall not be assigned by any
-------------
of the parties hereto without the prior written consent of the other parties.
SECTION 11.10 Amendment. This Agreement may be amended with the approval
---------
of the Boards of Directors of Nava Leisure and Senesco at any time before or
after approval thereof by stockholders of Nava Leisure, if required, and
Senesco; but after such approval by the Nava Leisure shareholders, no amendment
shall be made which substantially and adversely changes the terms hereof. This
Agreement may not be amended except by an instrument, in writing, signed on
behalf of each of the parties hereto.
SECTION 11.11 Choice of Law. This Agreement shall be construed,
-------------
interpreted and the rights of the parties determined in accordance with the laws
of the State of New Jersey except with respect to matters of law concerning the
internal corporate affairs of any corporate entity which is a party to or the
subject of this Agreement, and as to those matters the law of the jurisdiction
under which the respective entity derives its powers shall govern.
SECTION 11.11 Publicity. Except as required by law or on advice of
---------
counsel, neither party shall issue any press release or make any public
statement regarding the transactions contemplated
30
<PAGE>
hereby without the prior approval of the other parties, and the parties hereto
shall issue a mutually acceptable press release as soon as practicable after the
date hereof and after the Closing Date.
SECTION 11.12 No Third Party Beneficiaries. This Agreement shall be
----------------------------
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, including, without limitation, by way of subrogation,
except as specifically set forth in Article 9 hereof.
SECTION 11.13 Definitions.
------------
"Permits" means all licenses, permits, franchises, approvals,
authorizations, consents or order of, or filing with, any governmental
authority, whether foreign, federal, state or local, necessary or desirable for
the past, present or anticipated conduct or operation of the Business or
ownership of the assets of such person.
"Person" means any person or entity, whether an individual, trustee,
corporation, limited liability company, general partnership, limited
partnership, trust, unincorporated organization, business association, firm,
joint venture, governmental agency or authority or any similar entity.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
31
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement of thirty-three (33) pages in a manner legally binding upon them as of
the date first above written.
NAVA LEISURE USA, INC.
Attest:
By: /s/ J. Rockwell Smith
--------------------- ------------------
President Secretary
NAVA LEISURE ACQUISITION CORP.
Attest:
By: /s/ J. Rockwell Smith
---------------------- ------------------
President Secretary
Attest:
/s/ J. Rockwell Smith
- ------------------------------------------- ------------------
J. Rockwell Smith, as Principal Shareholder
Attest:
/s/ H. D. Williams
- ------------------------------------------- ------------------
H.D. Williams, as Principal Shareholder
Attest:
/s/ David Williams
- ------------------------------------------- ------------------
David Williams, as Principal Shareholder
32
<PAGE>
Attest:
/s/ Edwar Cowle
- ------------------------------------------- ------------------
Edward Cowle, as Principal Shareholder
SENESCO, LLC
Attest:
By: /s/ Phillip Escaravage
---------------------------------- ------------------
Phillip Escaravage, Manager
33
<PAGE>
SCHEDULE 1.2
Senesco member list and number of Nava Leisure/Senesco Technologies, Inc. shares
to be issued to each member
<PAGE>
SENESCO MEMBERS
PERCENT NUMBER OF
OWNERSHIP (1) SHARES (2)
------------- -----------
Phillippe Escaravage 56.259 956,403
Michel Escaravage 14.065 239,105
John Bradley 0.243 4,131
John Thompson 25.000 425,000
Yuwen Hong 1.000 17,000
Katalin Hudak 1.000 17,000
Sascha Fedyszyn 0.730 12,410
Christian Ahrens 0.243 4,131
Steven Katz 1.460 24,820
------- ---------
100.000 1,700,000
======= =========
(1) At Day #1
(2) In Senesco Technologies, Inc.
<PAGE>
SCHEDULE 2.2(A)
HOLDERS OF SHARES OF COMMON STOCK
<PAGE>
<TABLE>
<CAPTION>
BD--O5--1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 12
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ---------------CERTIFICATES HELD-----------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C>
NANCI GILBERT 12/01/88 N 102 1,000 11/28/88 N1
2685 CHADWICK ST. 1,000 * 0.03333%
SALT LAKE CITY, UT 84106
266 SARAH GILBERT 11/21/88 288 100 11/22/88 282 11/28/88 N1
2685 CHADWICK ST. 11/28/88 N 103 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
267 SCOTT GILBERT 11/21/88 289 100 11/22/88 282 11/22/88 N1
3028 PUTNAM CT. 11/28/88 N 104 1,000 11/28/88 N1
WEST VALLEY CITY, UT 84120 1,000 * 0.03333%
261 TONY GILBERT 11/21/88 284 100 11/22/82 282 11/28/88 N1
2685 CHADWICK ST. 11/28/82 N 105 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
135 JANET A. GOLDSTEIN 07/14/88 180 100 11/18/88 149
P.O. BOX 38 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
246 JOHN & LINDA GOOCH 07/14/88 342 100 11/22/88 309
11/21/88 100 * 0.00333%
243 MARY GOOCH 07/14/88 339 100 11/22/88 309
RFD #1, BOX 435a 11/21/88 100 * 0.00333%
LEHI, UT 84043
180 CHET OR TERI GOODWIN 07/14/88 225 100 11/17/88 213
7750 SUNBIRD WAY 11/21/88 100 * 0.00333%
MIDVALE, UT 84047
22 LESLIE GOVEDICH 07/13/87 29 150 08/26/87 21
1245 COACHMAN DRIVE 08/31/87 150 * 0. 00500%
SPARKS, NV 89431
245 JUDY GRACE 07/14/88 344 100 11/22/88 3209
12/01/88 100 * 0.00333%
258 ROGER GRACE 11/21/88 341 100 11/22/88 309
12/01/88 100 * 0.00333%
310 CRAIG GRIFFIN 11/21/88 N 57 1,000 11/28/88 N1
2116 TWILIGHT COURT 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
121 DON GRIFFIN 07/14/88 166 100 11/18/88 140
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 1
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
110 MICHAEL ALDRICH 07/14/88 155 100 11/18/88 149
2220 SO. 23RD EAST 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84109
236 DARIN ALLMAN 07/14/88 328 100 11/22/88 309
530 NORTH 200 WEST 11/21/88 100 * 0.00333%
LEHI, UT 84043
253 LONNIE ALLMAN 11/21/88 327 100 11/22/88 309
530 NORTH 200 WEST 11/21/88 100 * 0.00333%
LEHI, UT 84043
241 PAUL ALLMAN 07/14/88 337 100 11/22/88 309
11/21/88 100 * 0.00333%
LEHI, UT 84043
257 TAMMY ALLMAN 11/21/88 336 100 11/22/88 309
11/21/88 100 * 0.00333%
LEHI, UT 84043
288 NADINE ALLVILAR 11/21/88 0 * 0.00000%
29801 RUNNING DEER LANE 11/21/88
LAGUNA NIGEL, CA 92677
120 HEIDE ALSOP 07/14/88 165 100 11/18/88 149
P.O. BOX 462 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
157 ROBERT C. ALVEY 07/14/88 202 100 11/18/88 149
07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84108
50 MELBOURNE ARMSTRONG 08/26/87 58 150 08/31/87 45
BOX 452 08/31/87 150 * 0.00500%
PARK CITY, UT 84060
388 JANIS AVERETT 11/29/88 N 123 1,000 11/30/88 N107
1336 RIDGEMARK DRIVE 12/01/88 1,000 * 0.03333%
SANDY, UT 84092
285 RAYMON C. AVERETT 11/21/88 234 100 11/17/88 213
29801 RUNNING DEER LANE 11/21/88 100 * 0.00333%
LAGUNA NIGEL, CA 92677
117 THOMAS BAHAN 07/14/88 162 100 11/18/88 149
P.O. BOX 1816 11/28/88 N 90 900 11/28/88 N1
PARK CITY, UT 84060 1,000 * 0.03333%
273 BYRON BAILEY 11/21/88 295 100 11/22/88 282
4071 S. 570 E. #14A 11/21/88 100 * 0.00333%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 2
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
SALT LAKE CITY, UT 84107
278 KAYE BAILEY 11/21/88 300 100 11/22/88 282
725 E. 300 S. 11/21/88 100 * 0.00333%
CENTERVILLE, UT 84014
279 KENNA BAILEY 11/21/88 301 100 11/22/88 282
725 E. 300 S. 11/21/88 100 * 0.00333%
CENTERVILLE, UT 84014
280 RIANA BAILEY 11/21/88 302 100 11/22/88 282
725 E. 300 S. 11/21/88 100 * 0.00333%
CENTERVILLE, UT 84014
277 STAN BAILEY 11/21/88 299 100 11/22/88 282
725 E. 300 S. 11/21/88 100 * 0.00333%
CENTERVILLE, UT 84014
4 FORREST BAKER 06/19/87 5 10 05/07/64 05/07/64
BOX 224 09/01/87 14 372,096 05/15/66 11/30/87 111
SPOKANE, WA 99210 15 186,048 09/02/67 11/30/87 111
17 186,048 07/01/70 11/30/87 111
0 * 0.00000%
15 SARASANAN BLAENDRA 07/13/87 21 150 08/26/87 21
439 WEST 233RD STREET 09/01/87 115 173,645 11/30/87 111
CARSON, CA 90745 173,795 * 5.79312%
414 BAGLEY SECURITIES, INC. 06/15/90 N 155 10,000 05/22/90 N155
BOX 2998 06/15/90 N 156 250 05/22/90 N155
SALT LAKE CITY, UT 84110-2998 10,250 * 0.34166%
190 EDNA B. BARKER 07/14/88 248 100 11/22/88 245
2017 S. LINCOLN #405 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84105
184 PAUL & CARRIE BARKER JTWROS 07/14/88 229 100 11/17/88 213
11455 SOUTH PLAYER ROAD 11/21/88 100 * 0.00333%
SANDY, UT 84092
366 ADAM BATCHELOR NO DATE N 85 1,000 11/28/88 N1
4942 JANETTE AVENUE 11/28/88 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
365 BRETT BATCHELOR NO DATE N 84 1,000 11/28/88 N1
4942 JANETTE AVENUE 12/01/88 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
364 KATHY BATCHELOR NO DATE N 83 1,000 11/28/88 N1
4942 JANETTE AVENUE 11/28/88 1,000 * 0.03333%
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 3
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
WEST VALLEY CITY, UT 84120
368 MATTHEW BATCHELOR NO DATE N 87 1,000 11/28/88 N1
4942 JANETTE AVENUE 11/28/88 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
186 TONY & MARINA BATTILORO JTWROS 07/14/88 231 100 11/17/88 213
1863 SOUTH TERRACE DRIVE 11/21/88 100 * 0.00333%
OREM, UT 84057
210 JERRI LYNN BEATTY 07/14/88 268 100 11/22/88 245
345 MILTON AVENUE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84115
316 MRS. RICHARD BECKS 11/21/88 N 69 1,000 11/28/88 N1
62 WEST 400 SOUTH 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
315 RICHARD BECKS 11/21/88 N 68 1,000 11/28/88 N1
62 WEST 400 SOUTH 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
204 MELANIE BENTLEY 07/14/88 262 100 11/22/88 245
342 WEST 350 SOUTH 11/21/88 100 * 0.00333%
LAYTON, UT 84041
275 CODY BERG 11/21/88 297 100 11/22/88 282
11/21/88 100 * 0.00333%
387 JOHN BERG 11/29/88 N 122 1,000 11/30/88 N107
12/01/88 1,000 * 0.03333%
FIRTH
386 RUTH BERG 11/29/88 N 121 1,000 11/30/88 N107
12/01/88 1,000 * 0.03333%
FIRTH
396 JEAN BEST 11/29/88 N 132 1,000 11/30/88 N107
5245 SOUTH STATE STREET 12/01/88 1,000 * 0.03333%
MURRAY, UT 84107
395 ROBERT BEST 11/29/88 N 131 1,000 11/30/88 N107
5245 SOUTH STATE STREET 12/01/88 1,000 * 0.03333%
MURRAY, UT 84107
124 KIMBERLY BICKMORE 07/14/88 169 100 11/18/88 149
101 MARSHALL CREST 07/14/88 100 * 0.00333%
TOOELE, UT 84074
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 4
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
123 PAUL BICKMORE 07/14/88 168 100 11/18/88 149
2791 HOLIDAY RANCH LOOP 12/01/88 N 120 900 11/30/88 N107
PARK CITY, UT 84060 1,000 * 0.03333%
357 KATHY BISHOP NO DATE N 41 1,000 11/28/88 N1
405 SOUTH MAIN 11/29/88 1,000 * 0.03333%
1ST FLOOR ANNEX
SALT LAKE CITY, UT 84111
355 LARRY BOCK NO DATE N 39 1,000 11/28/88 N1
734 W. 500 N. 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84116
130 CHARLOTTE BOGNESSS 07/14/88 175 100 11/18/88 149
P.O. BOX 680114 07/14/88 100 * 0.00333%
PARK CITY, UT 84068
235 LARRY & MARGO BOWDEN 07/14/88 326 100 11/22/88 309
1434 SETTLERS WAY #10 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84123
342 KATHLEEN BRACKSMAYER NO DATE N 26 1,000 11/28/88 N1
200 EAST 82ND STREET 03/13/89 1,000 * 0.03333%
APT 9B
RETURNED
NEW YORK, NY 10028
131 NANCY BRADISH 07/14/88 176 100 11/18/88 149
P.O. BOX 1742 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
234 DEBBIE BREWER 07/14/88 325 100 11/22/88 309
567 I STREET 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84103
237 JESSIE BREWER 07/14/88 329 100 11/22/88 309
C/F DEBBIE BREWER 11/21/88 100 * 0.00333%
567 I STREET
SALT LAKE CITY, UT 84103
413 S. RICHARD BRIGHTON 11/30/88 N 151 100 12/15/88 N1
P.O. BOX 4348 11/30/88 100 * 0.00333%
PARK CITY, UT 84060
122 WALLY BROWN 07/14/88 167 100 11/18/88 149
950 CURLING LANE 07/14/88 100 * 0.00333%
BOISE, ID 83702
126 SHELBY BUFORD, JR. 07/14/88 171 100 11/18/88 149
P.O. BOX 3623 07/14/88 100 * 0.00333%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 5
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
PARK CITY, UT 84060
31 JERRY BUTLER 07/13/87 38 150 08/26/87 21
20012 MAYPORT LANE 01/11/96 150 * 0.00500%
HUNTINGTON BEACH, CA 92646
RETURNED
189 PEARL & ARVIL CANTRELL 07/14/88 247 100 11/22/88 245
923 GODDARD CIRCLE 11/21/88 100 * 0.00333%
LAYTON, UT 84041
156 TONY CARTER 07/14/88 201 100 11/18/88 149
1747 WASATCH DRIVE 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84108
66 DR. ANDREW CASTER 09/01/87 71 3,000 09/11/87 69
10808 WASHINGTON BLVD. 01/11/96 3,000 * 0.10000%
CULVER CITY, CA 90232
RETURNED
114 STEVEN CASTOLDI 07/14/88 159 100 11/18/88 149
P.O. BOX 3541 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
132 STEVEN CASTOLDI 07/14/88 177 100 11/18/88 149
P.O. BOX 3541 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
106 HENRY CATE 07/14/88 151 100 11/18/88 149
P.O. BOX 2041 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
107 MONIQUE CATE 07/14/88 152 100 11/18/88 149
P.O. BOX 4475 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
209 CEILING BRIGHT 07/14/88 267 100 11/22/88 245
212 WEST 700 NORTH 11/21/88 100 * 0.00333%
CLEARFIELD, UT 84015
100 JOHN CHAGNOVIDH 07/14/88 143 100 11/07/88 128
2497 WILMINGTON AVENUE 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84109
291 JUDY CHAPMAN 11/21/88 239 100 11/17/88 213
3045 BRIGHTON COURT 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84121
290 SCOTT CHAPMAN 11/21/88 238 100 11/17/88 213
3045 BRIGHTON COURT 11/21/88 100 * 0.00333%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 6
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
SALT LAKE CITY, UT 84121
191 IREL AND/OR LOUISE CHASE 07/14/88 249 100 11/22/88 245
2283 TARA LANE #4 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84117
169 JEFF CHATTERLEY 07/14/88 214 100 11/17/88 213
796 EAST 400 SOUTH 11/21/88 100 * 0.00333%
OREM, UT 84058
172 CHRIS CLARK 07/14/88 217 100 11/17/88 213
495 EAST 1960 SOUTH 11/21/88 100 * 0.00333%
OREM, UT 84058
174 DELAINE & WELSFORD CLARK 07/14/88 219 100 11/17/88 213
495 EAST 1960 SOUTH 11/21/88 100 * 0.00333%
OREM, UT 84058
175 LEE & JEANA CLARK JTWROS 07/14/88 220 100 11/17/88 213
329 EAST 1730 SOUTH 11/21/88 100 * 0.00333%
OREM, UT 84058
173 SUZANNE & WALT CLARK 07/14/88 218 100 11/17/88 213
495 EAST 1960 SOUTH 11/21/88 100 * 0.00333%
OREM UT 84058
400 CLAY CONSTRUCTION COMPANY 11/29/88 N 136 1,000 11/30/88 N107
P.O. BOX 26 12/01/88 1,000 * 0.00333%
LANDER, WY 82520
399 ARCHIE D. CLAY 11/29/88 N 135 1,000 11/30/88 N107
P.O. BOX 26 12/01/88 1,000 * 0.00333%
LANDER, WY 82520
86 JACK S. CLISSOLD 07/14/88 129 100 11/07/88 128
3097 MELBOURNE ST. 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84106
85 LANE CLISSOLD 07/14/88 128 100 11/07/88 128
135 WEST 900 SOUTH 07/14/88 100 * 0.03333%
SALT LAKE CITY, UT 84101
20 ROXANNE V. COLLINS 07/13/87 27 150 08/26/87 21
969 EL CAMINO 01/11/96 150 * 0.00500%
#403
RETURNED
SUNNYVALE, CA 94087
133 HOLLY CONNER 07/14/88 178 100 11/18/88 149
2820 HACKNEY COURT 07/14/88 100 * 0.03333%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 7
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
PARK CITY, UT 84060
401 MARC COULAM 11/29/88 N 137 1,000 11/30/88 N107
136 S. MAIN, SUITE 716 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
402 TRACY COULAM 11/29/88 N 138 1,000 11/30/88 N107
136 S. MAIN, SUITE 716 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
68 ED COWLE 09/01/87 79 10,000 11/23/87 79 11/23/87
09/01/87 80 15,000 11/23/87 79
, 90732 81 15,000 11/23/87 79
82 15,000 11/23/87 79
83 15,000 11/23/87 79
84 15,000 11/23/87 79
85 15,000 11/23/87 79
86 15,000 11/23/87 79
87 15,000 11/23/87 79
88 15,000 11/23/87 79
89 15,000 11/23/87 79
90 30,000 11/23/87 79
91 30,000 11/23/87 79
92 30,000 11/23/87 79
93 30,000 11/23/87 79
94 30,000 11/23/87 79
95 30,000 11/23/87 79
96 30,000 11/23/87 79
97 30,000 11/23/87 79
98 13,608 11/23/87 79
104 75,000 11/23/87 79
105 75,000 11/23/87 79
106 75,000 11/23/87 79
107 54,072 11/23/87 79
682,680 * 22.75581%
113 RICHARD CROPPER 07/14/88 158 100 11/18/88 149
P.O. BOX 2761 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
292 SHERRY CROWDER 11/21/88 240 100 11/17/88 213
11/21/88 100 * 0.00333%
238 CAROLYN CRUMB 07/14/88 331 100 11/22/88 309
685 SOUTH 50 WEST 11/21/88 100 * 0.00333%
PLEASANT GROVE, UT 84062
254 JACK CRUMB 11/21/88 330 100 11/22/88 309
685 SOUTH 5O WEST 11/21/88 100 * 0.00333%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 1
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
PLEASANT GROVE, UT 84062
408 CULISER NETHERLANDS B.V. 11/30/88 0 * 0.00000%
10/14/96
134 DICK CULLER 07/14/88 179 100 11/18/88 149
P.O. BOX 2436 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
105 RICHARD CULLER 07/14/88 150 100 11/18/88 149
P.O. BOX 2436 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
406 BETTY CURTIS 12/01/88 N 125 1,000 11/30/88 N107
64 WEST 4TH SOUTH 12/01/88 1,000 * 0.00333%
SALT LAKE CITY, UT 84101
34 MIKE DALEY 07/13/87 41 150 08/26/87 21
29641 S. WESTERN AVENUE 04/17/96 150 * 0.00500%
SAN PEDRO, CA 90732
RETURNED
338 JANET N. DAVISON NO DATE N 22 1,000 11/28/88 N1
10 EXCHANGE PLACE 11/28/88 1,000 * 0.00333%
SUITE 610
SALT LAKE CITY, UT 84111
224 ANDREA DEUS 07/14/88 311 100 11/22/88 309
433 E. 5600 S. #D 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84120
248 CORVIN DEUS 11/21/88 310 100 11/22/88 309
433 E. 5600 S. #D 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84120
148 AGNES E. DILLON 07/14/88 193 100 11/18/88 149
P.O. BOX 5089 01/11/96 100 * 0.00333%
EVANSTON, IL 60204
RETURNED
192 TONY & HEIDI DUGMORE 07/14/88 250 100 11/22/88 245
3142 SOUTH 2600 EAST 11/21/88 100 * 0.03333%
SALT LAKE CITY, UT 84109
63 JACKIE DUMONT 08/31/87 66 150 09/01/87 65
BOX 2415 08/31/87 150 * 0.00500%
PARK CITY, UT 84060
159 JEFF DUNN 07/14/88 204 100 11/18/88 149
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 9
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
P.O. BOX 680 787 07/14/88 100 * 0.00333%
PARK CITY, UT 87087
403 JEREMY DUNNE 11/29/88 N 139 1,000 11/30/88 N107
300 E. MINERAL AVENUE, SUITE 5 12/01/88 1,000 * 0.03333%
LITTLETON, CO 80122
111 JAMES EAGAR 07/14/88 156 100 11/18/88 149
P.O. BOX 476 07/14/88 100 * 0.00333%
NO. SALT LAKE, UT 84054
112 LAWRENCE ELDREDGE 07/14/88 157 100 11/18/88 149
2039 ROLLING KNOLLS WAY 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84121
149 LANCE E. EMERY 07/14/88 194 100 11/18/88 149
P.O. BOX 3813 12/01/88 100 * 0.00333%
PARK CITY, UT 84060
5 DON ENGLISH/GRACE ENGLISH 06/19/87 7 139,536 05/11/64 11/30/87 108
2501 EAST SHERMAN 09/01/87 0 * 0.00000%
APT 408
COEUR D'ALENE, ID 83814
394 ARLENE EVANOFF 11/29/88 N 130 1,000 11/30/88 N107
3681 EAST 3225 SOUTH 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84109
393 PETE EVANOFF 11/29/88 N 129 1,000 11/30/88 N107
3681 EAST 3225 SOUTH 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84109
372 DIANE FARMER 11/29/88 N 92 1,000 11/29/88 N1
6362 CAMINITO BASILIO 11/29/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
374 DANIELLE FARMER 11/29/88 N 108 1,000 11/30/88 N107
6362 CAMINITO BASILIO 12/01/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
373 JOSHUA FARMER 11/29/88 N 107 1,000 11/30/88 N107
6362 CAMINITO BASILIO 12/01/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
337 GEORGE FEHR NO DATE N 21 1,000 11/28/88 N1
10 EXCHANGE PLACE 11/28/88 1,000 * 0.03333%
SUITE 610
SALT LAKE CITY, UT 84111
104 BOB FERGUSON 07/14/88 149 100 11/18/88 149
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
8D-05-01 23 PAGE 10
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
P.O. BOX 2194 07/14/88 100 * 0.00333%
, UT 84110
PARK CITY
281 IAN FISHER 11/21/88 303 100 11/22/88 282
3030 S. STATE ST. 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84115
287 ROGER &/OR VAL FRAZIER 11/21/88 235 100 11/22/88 213
P.O. BOX 28 11/21/88 100 * 0.00333%
HINCKLEY, UT 84635
170 BYRON FRYER 07/14/88 215 100 11/17/88 213
1831 NEW YORK DRIVE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84116
185 GARY FRYER 07/14/88 230 100 11/17/88 213
5036 BOOTHILL DRIVE 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84120
283 BECKEY GARRICK 11/21/88 305 100 11/22/88 282
1493 W. 6675 S. 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84123
78 ANTHONY GAUDENTI 12/07/87 118 6,000 12/22/87 118
26500 HAWKHURST DR. 12/07/87 6,000 * 0.20000%
RANCHO PALOS VERDES, CA 90727
194 REYMOND E. GELHARD 07/14/88 252 100 11/22/88 245
270 N. 850 E. 11/21/88 100 * 0.00333%
LAYTON, UT 84041
199 ROSEMARY GELHARD 07/14/88 257 100 11/22/88 245
270 N. 850 E. 11/21/88 100 * 0.00333%
LAYTON, UT 84041
242 COLLENE GIBBONS 07/14/88 338 100 11/22/88 309
11/21/88 100 * 0.00333%
BOUNTIFUL, UT 84010
247 ERA AND/OR ILA GIBBONS 07/14/88 343 100 11/22/88 309
7805 S. CANDLESTICK LANE 11/21/88 100 * 0.00333%
APT 107
MIDVALE, UT 84047
138 JAN GIBSON 07/14/88 183 100 11/18/88 149
6996 W. GILLIS ROAD 07/14/88 100 * 0.00333%
BOISE, ID 83703
82 CHRISTINE GILBERT 07/14/88 124 4,000 11/07/88 122 11/22/88 282
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAVA LEISURE USA, INC. DATE 10/08/98
BD-05-01 23 PAGE 11
BOND/STOCKHOLDER ACCOUNTING SYSTEM
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD----------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<C> <S> <C> <C> <C> <C> <C> <C> <C>
2685 CHADWICK ST. 11/29/88 307 1,400 11/22/88 282 11/28/88 N1
SALT LAKE CITY, UT 84106 308 100 11/22/88 282 11/28/88 N1
N 7 1,000 11/28/88 N1
1,000 * 0.03333%
272 DOROTHY GILBERT 11/28/88 294 100 11/22/88 282 11/28/88 N1
183 Q STREET 11/28/88 N 93 1,000 11/28/88 N1
SALT LAKE CITY 1,000 * 0.03333%
259 GARY GILBERT 11/21/88 282 100 11/22/88 282 11/28/88 N1
2685 CHADWICK ST. 11/28/88 N 94 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
270 11/21/88 291 100 11/22/88 282 11/28/88 N1
HEATHER GILBERT 11/28/88 N 95 1,000 11/28/88 N1
3028 PUTNAM CT. 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
263 JANIE GILBERT 11/21/88 286 100 11/22/88 282 11/28/88 N1
2685 CHADWICK ST. 11/28/88 N 96 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
271 11/21/88 293 100 11/22/88 282 11/28/88 N1
JASON GILBERT 11/28/88 N 97 1,000 11/28/88 N1
3028 PUTNAM CT. 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
269 11/21/88 292 100 11/22/88 282 11/28/88 N1
JENNFIER GILBERT 11/28/88 N 98 1,000 11/28/88 N1
3028 PUTNAM CT. 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
260 JOLENE GILBERT 11/21/88 283 100 11/22/88 282 11/28/88 N1
2685 CHADWICK ST. 11/28/88 N 99 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
262 LEE ANNE GILBERT 11/21/88 285 100 11/22/88 282 11/28/88 N1
2685 CHADWICK ST. 11/28/88 N 100 1,000 11/28/88 N1
SALT LAKE CITY, UT 84106 1,000 * 0.03333%
264 LAUREN GILBERT 11/21/88 N 91 1,000 11/28/88 N1
2685 CHADWICK ST. 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84106
268 LORIE GILBERT 11/21/88 290 100 11/22/88 282 11/28/88 N1
3028 PUTNAM CT. 11/28/88 N 101 1,000 11/28/88 N1
WEST VALLEY CITY, UT 84120 1,000 * 0.03333%
265 11/21/88 287 100 11/22/88 282 11/28/88 N1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD--O5-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 24
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/--------------CERTIFICATES HELD------------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C>
369 LORIE MYERS NO DATE N 88 1,000 11/28/88 N1
4942 JANETTE AVENUE 11/28/88 1,000 * 0.03333%
WEST VALLEY CITY, UT 84120
407 PIER LUIGI NAVA 11/30/88 0 * 0.00000%
10/14/96
188 GAYLYNN & CHRIS NEILSON 07/14/88 246 100 11/22/88 245
P.O. BOX 588 11/21/88 100 * 0.00333%
HUNTINGTON, UT 84528
201 KRISTEN NEILSON 07/14/88 259 100 11/22/88 245
P.O. BOX 588 11/28/88 100 * 0.00333%
HUNTINGTON, UT 84528
128 LEONARD NEILSON 07/14/88 173 100 11/18/88 149 11/28/88 N1
433 SO. 400 EAST 11/28/88 N 9 1,000 11/28/88 N1
SALT LAKE CITY, UT 84111 1,000 * 0.03333%
181 SUZANNE & DAVID NELSON JTWROS 07/14/88 226 100 11/17/88 213
1043 NORTH 910 EAST 11/21/88 100 * 0.00333%
OREM, UT 84057
354 LOEY Y. NEWREN NO DATE N 38 1,000 11/28/88 N1
27 WALKER PLACE 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
136 LU NIESLEY 07/14/88 181 100 11/18/88 149
P.O. BOX 1937 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
35 EDWARD NOONAN 07/13/87 42 150 08/26/87 21
29641 S. WESTERN AVENUE 08/31/87 150 * 0.00500%
RANCHOS PALOS VERDES, CA 90732
187 DAVID P. NORRIS 07/14/88 245 100 11/22/88 245
922 GODDARD CIRCLE 11/21/88 100 * 0.00333%
LAYTON, UT 84041
53 LAURA C. NORRIS 08/26/87 61 150 08/31/87 45
62 WEST 400 SOUTH 08/31/87 150 * 0.00500%
SALT LAKE CITY, UT 84101
197 STAN & GLORIA NORRIS 07/14/88 255 100 11/22/88 245
P.O. BOX 595 11/21/88 100 * 0.00333%
KAMAS, UT 84036
389 JANIS 0'BRIEN 11/29/88 N 124 1,000 11/30/88 N107
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 25
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/----------------CERTIFICATES HELD------------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C><C> <C> <C> <C> <C>
8 EAST BROADWAY, #613 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84111
193 MARY LOU & WAYNE OLSEN 07/14/88 251 100 11/22/88 245
64 WEST FAYETTE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84101
11 HARRY K. OMINE 06/19/87 13 93,024 08/15/66 07/13/87 18
119 NORTH BERNARD 08/26/87 16 46,512 11/01/67 08/28/87 44
SPOKANE, WA 99201 0 * 0.00000%
379 BERNADETTE OTT 11/29/88 N 113 1,000 11/30/88 N107
P.O. BOX 2243 12/01/88 1,000 * 0.03333%
PARK CITY, UT 84060
378 MATT OTT 11/29/88 N 112 1,000 11/30/88 N107
P.O. BOX 2243 12/01/88 1,000 * 0.03333%
PARK CITY, UT 84060
176 MITCHELL & RACHEL OVIATT 07/14/88 221 100 11/17/88 213
1942 S. COLUMBIA LANE 11/21/88 100 * 0.00333%
OREM, UT 84058
319 JILL PATTERSON 11/21/88 N 72 1,000 11/28/88 N1
P.O. BOX 2757 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
139 LYNN M. PATTERSON 07/14/88 184 100 11/18/88 149
P.O. BOX 3155 07/14/88 100 *
PARK CITY, UT 84060 0. 00333%
211 SHERRIE PATTERSON 07/14/88 269 100 11/22/88 245
964 EAST SNOW CREEK DRIVE 11/21/88 100 * 0.00333%
LAYTON, UT 84040
212 KENNETH PEDOCKIE 07/14/88 270 100 11/22/88 245
3428 SOUTH 300 EAST #1 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84115
27 GEORGE PEREIRA 07/13/87 34 150 0 8/26/87 21
3741 EL RICON WAY 08/31/87 150 *
SACRAMENTO, CA 95825 0.00500%
17 JOHN PEREIRA 07/13/87 23 150 08/26/87 21
215 S. FIRST STREET 03/13/89 150 * 0.00500%
RETURNED
DUNSMUIR
19 JAMES V. PEREIRA 07/13/87 26 150 08/26/87 21
215 SOUTH FIRST STREET 03/13/89 150 * 0.00500%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-O5-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 26
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/____________ CERTIFICATES HELD__________________________________
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RETURNED
DUNSMUIR
24 SUSAN PEREIRA 07/13/87 31 150 08/26/87 21
1119 ARCADIAN AVENUE 08/31/87 150 * 0.00500%
CHICO, CA 95926
14 VICTOR PEREIRA 07/13/87 20 93,024 07/13/87 18 08/26/87 21
29641 SOUTH WESTERN AVENUE 12/07/87 43 90,824 08/26/87 21 09/11/87 69
SUITE 317 74 80,424 09/11/87 69 10/22/87 75
SAN PEDRO, CA 90732 78 74,424 10/22/87 75 12/14/87 116
117 71,424 12/14/87 116 12/22/87 118
121 87,636 12/22/87 118 S
87,636 * 2.92118%
377 BRETT PERETTI 11/29/88 N 111 1,000 11/30/88 N107
2576 LUCKY JOHN DRIVE 12/01/88 1,000 * 0.03333%
PARK CITY, UT 84060
177 JACK & DONNA PHILLIPS 07/14/88 222 100 11/17/88 213
476 JACKSON ST. 11/21/88 100 * 0.00333%
MIDVALE, UT 94947
116 VIRGINIA PINDER 07/14/88 161 100 11/18/88 149
P.O. BOX 1329 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
282 JEFF PISTORIUS 11/21/88 304 100 11/22/88 282
6684 CLERNATES DR. 11/21/88 100 * 0.00333%
WEST JORDAN, UT 84084
155 JACK PLUMB 07/14/88 200 100 11/18/88 149
135 WEST 900 SOUTH 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84101
195 SARAH ANN PRESTON 07/14/88 253 100 11/22/88 245
305 E. SUNSET AVENUE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 00085-0015
250 CONNIE PULLEY 11/21/88 315 100 11/22/88 309
210 GREEN STREET 11/21/88 100 * 0.00333%
LAYTON, UT 84041
229 ELDON PULLEY 07/14/88 318 100 11/22/88 309
915 N. 1300 W. 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84116
52 GLEN &/OR ILA PULLEY 08/26/87 60 150 08/31/87 45
120 N. WEST STATE ROAD #105 07/14/88 150 * 0.00500%
AMERICAN FORK, UT 84003
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-O5-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 27
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ______________ CERTIFICATES HELD ______________________________
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
228 GORDON PULLEY 07/14/88 317 100 11/22/88 309
120 N. WEST STATE ROAD #105 11/21/88 100 * 0.00333%
AMERICAN FORK, UT 84003
227 LEON PULLEY 07/14/88 316 100 11/22/88 309
210 GREEN STREET 11/21/88 100 * 0.00333%
LAYTON, UT 84041
51 TINA PULLEY 08/26/87 59 150 08/31/87 45
7805 S. CANDLESTICK LANE 11/28/88 123 4,000 11/07/88 122 11/22/88 309
APT. 107 345 400 11/22/88 309 11/28/88 N1
MIDVALE, UT 84047 N 8 1,000 11/28/88 N1
1,150 * 0.03833%
371 SHEILA PURDOM NO DATE N 143 1,000 11/28/88 N1
2319 COMSTOCK DRIVE 11/30/88 N 150 100 12/15/88 N1
PARK CITY, UT 84060 1,100 * 0.03667%
125 L. CLIFTON READ, JR. 07/14/88 170 100 11/18/88 149
BOX 1985 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
313 DARRELL REEVES 11/21/88 N 66 1,000 11/28/88 N1
2970 ARABIAN DRIVE 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
312 TEDDY REEVES 11/21/88 N 65 1,000 11/28/88 N1
2970 ARABIAN DRIVE 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
314 TARA REEVES 11/21/88 N 67 1,000 11/28/88 N1
2970 ARABIAN DRIVE 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
392 THELMA REEVES 11/29/88 N 128 1,000 11/30/88 N107
2970 ARABIAN DRIVE 12/01/88 1,000 * 0.03333%
PARK CITY, UT 84060
213 MICHELLE RICHINS 07/14/88 271 100 11/22/88 245
4935 OLD POST ROAD #20 11/21/88 100 * 0.00333%
OGDEN, UT 84403
65 RAY RICHLIN 09/01/87 69 3,000 09/11/87 69
9001 WILSHIRE BLVD. 09/01/87 70 3,000 09/11/87 69
BEVERLY HILLS, CA 90211 6,000 * 0.20000%
226 VALERIE ROBERTS 07/14/88 314 100 11/22/88 309
360 W. 400 N. #42 11/21/88 100 * 0.00333%
SPRINGVILLE, UT 84663
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 28
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ______________ CERTIFICATES HELD _____________________________
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C>
32 DONALD M. ROSE 07/13/87 39 150 08/26/87 21
895 SUMMERSET COURT 09/O1/87 77 3,000 10/22/87 75
SAN CARLOS, CA 94070 3,150 * 0.10500%
108 ROBERT ROXBURGH 07/14/88 153 100 11/18/88 149
4534 ORLEANS WAY 07/14/88 100 * 0.00333%
WEST VALLEY CITY, UT 84120
87 HAP RUSSELL 07/14/88 130 100 11/07/88 128
4851 SO. WOODBRIDGE DR. 07/14/88 100 * 0.00333%
APT. #38
SALT LAKE CITY, UT 84117
91 HELEN J. RUSSELL 07/14/88 134 100 11/07/88 128
87 `C' STREET 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84103
145 ANDREA RUZICKA 07/14/88 190 100 11/18/88 149
P.O. BOX 1685 11/28/88 N 64 900 11/28/88 N1
PARK. CITY, UT 84060 1,000 * 0.03333%
71 JIM RUZICKA 09/01/87 108 209,304 11/30/87 108 12/01/88 N107
P.O. BOX 3813 12/01/88 N 140 174,404 11/30/88 N107
PARK CITY, UT 84060 174,404 * 5.81342%
146 KRISTINA RUZICKA 07/14/88 191 100 11/18/88 149
1041 W. OGDEN AVENUE #320 11/28/88 N 62 900 11/28/88 N1
NAPERVILLE, IL 60540 1,000 * 0.03333%
62 UTE RUZICKA 08/31/87 65 150 09/O1/87 65
BOX 3073 11/28/88 174 100 11/18/88 149
PARK CITY, UT 84060 N 63 750 11/28/88 N1
1,000 * 0.03333%
18 CHRISTOPHER SANDERS (GUARDIAN) 07/13/87 24 150 08/26/87 21
215 SOUTH FIRST STREET 08/31/87 150 * 0.00500%
DUNSMUIR
26 GREGORY SANDERS 07/13/87 33 150 08/26/87 21
1245 COACHMAN DRIVE 08/31/87 150 * 0.00500%
SPARKS, NV 89431
160 PAUL E. SCHOENFELD 07/14/88 205 100 11/18/88 149
7689 SO. 1040 EAST 07/14/88 100 * 0.00333%
MIDVALE, UT 84047
161 ROSS SCHOENFELD 07/14/88 206 100 11/18/88 149
4014 50. 1140 EAST 07/14/88 100 * 0.00333%
SALT LAKE CITY, UT 84127
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 29
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ________________ CERTIFICATES HELD ____________________________
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C><C> <C> <C> <C> <C>
143 RICH SCHREIBER 07/14/88 188 100 11/18/88 149
P.O. BOX 680011 07/14/88 100 * 0.00333%
PARK CITY, UT 84068
167 RAY F. SCHUREMAN 07/14/88 232 100 11/17/88 213
979 W. 230 N. 11/21/88 100 * 0.00333%
OREN, UT 84057
75 ASSIEH SEDAGHATI 09/O1/87 113 173,646 11/30/87 111
5011 ABUELA DRIVE 01/11/96 173,646 * 5.78815%
SAN DIEGO, CA 92124
RETURNED
151 DENISE J. SHACKELFORD 07/14/88 196 100 11/18/88 149
P.O. BOX 3325 01/11/96 100 * 0.00333%
BOISE, ID 83703
RETURNED
356 DIANE SHEPHARD NO DATE N 40 1,000 11/28/88 N1
C/0 DILLON SECURITIES 11/28/88 1,000 * 0.03333%
47 WEST 200 SOUTH, SUITE 430
AMERICAN PLAZA III
SALT LAKE CITY, UT 84101
171 KEN SIMMONS 07/14/88 216 100 11/17/88 213
3810 SOUTH REDWOOD #2096 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84119
42 MARILYN SLOAN 08/26/87 50 150 08/31/87 45
19803 10TH PLACE N. W. 08/31/87 150 * 0.00500%
SEATTLE, WA 98177
397 ALVIN I. SMITH 11/29/88 N 133 1,000 11/30/88 N107
805 DONNER WAY 12/01/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84108
37 BRIAN SMITH 08/26/87 45 150 08/31/87 45
3810 8TH AVENUE 11/28/88 N 61 850 11/28/88 N1
SAN DIEGO, CA 92103 1,000 * 0.03333%
38 ERIC SMITH 08/26/87 46 150 08/31/87 45
308 4TH STREET 11/28/88 N 60 850 11/28/88 N1
SAUSALITO, CA 94965 1,000 * 0.03333%
40 LUCILE SMITH 08/26/87 48 150 08/31/87 45
13320 HIGHWAY 99 S. #92 08/31/87 150 * 0.00500%
EVERETT, WA 98204
36 ROCKWELL SMITH 08/26/87 44 46,512 08/28/87 44 08/31/87 45
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 30
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ ----------------CERTIFICATES HELD--------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C>
62 WEST 400 SOUTH 11/30/88 64 44,712 08/31/87 45 09/01/87 65
SALT LAKE CITY, UT 84101 68 66,618 09/01/87 65 11/07/88 122
109 69,768 11/30/87 109 11/28/88 N1
127 46,618 11/07/88 122 11/18/88 149
212 40,318 11/18/88 149 11/28/88 N1
N 106 8,636 11/28/88 N1
8,636 * 0.28786%
311 SHIRLEY SMITH 11/21/88 N 59 1,000 11/28/88 N1
P.O. BOX 943 11/30/88 N 152 100 12/15/88 N1
PARK CITY, UT 84060 1,100 * 0.03667%
347 CINDY SNOW NO DATE N 31 1,000 11/28/88 N1
254 EAST 9545 SOUTh 11/28/88 1,000 * 0.03333%
SANDY, UT 84070
348 ELIZABETH SNOW NO DATE N 32 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0.03333%
SANDY. UT 84070
344 JEANNIE SNOW NO DATE N 28 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0.03333%
SANDY. UT 84070
346 MICHELLE SNOW NO DATE N 30 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0.03333%
SANDY, UT 84070
343 RON SNOW NO DATE N 27 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0.03333%
SANDY, UT 84070
345 STEPHANIE SNOW NO DATE N 29 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0. 03333%
SANDY, UT 84070
349 SUZANNE SNOW NO DATE N 33 1,000 11/28/88 N1
254 EAST 9545 SOUTH 11/28/88 1,000 * 0.03333%
SANDY, UT 84070
358 C. T. STANGER NO DATE N 42 1,000 11/28/88 N1
6362 CAMINITO BASILIO 11/28/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
334 DAN STANGER NO DATE N 18 1,000 11/28/88 N1
6362 CAMINITO BASILIO 11/28/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
359 DONNA STANGER NO DATE N 78 1,000 11/28/88 N1
6362 CAMINITO BASILIO 11/28/88 1,000 * 0.0333
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 31
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/-----------------CERTIFICATES HELD-------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C>
SAN DIEGO, CA 92111
376 KATHY STANGER 11/29/88 N 110 1,000 11/30/88 N107
6362 CAMINITO BASILIO 12/01/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
360 LORRIE SUTTON NO DATE N 79 1,000 11/28/88 N1
6362 CAMINITO BASILIO 11/28/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
375 PERRY STANGER 11/29/88 N 109 1,000 11/30/88 N107
6362 CAMINITO BASILIO 12/01/88 1,000 * 0.03333%
SAN DIEGO, CA 92111
411 LARRY STANLEY 11/30/88 N 148 100 12/15/88 N1
BOX 2566 11/30/88 100 * 0.00333%
PARK CITY, UT 84060
25 CANDICE STEWART 07/13/87 32 150 08/26/87 21
1965 MORGAN AVENUE 08/31/87 150 * 0.00500%
MORGAN HILL, CA 95037
140 DAVE STURGES 07/14/88 185 100 11/18/88 149
P.O. BOX 435 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
23 ALBERT E. SUNSHINE 07/13/87 30 150 08/26/87 21
7461 BEVERLY BOULEVARD 01/11/96 150 * 0.00500%
LOS ANGELOS, CA 90036
RETURNED
232 LISA THOMAS 07/14/88 323 100 11/22/88 309
4585 S. 2850 W. #267 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84119
289 LORRAINE TULIN 11/21/88 237 100 11/17/88 213
5704 WATERBURY WAY 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84121
44 JEFF USHER 08/26/87 52 150 08/31/87 45
11354 SANDPOINT WAY 08/31/87 150 * 0.00500%
SEATTLE, WA 98125
43 LARRY USHER 08/26/87 51 150 08/31/87 45
11747 LAKESIDE N. E. 08/31/87 150 * 0.00500%
SEATTLE, WA 98125
203 HEATHER VAN BIBBER 07/14/88 261 100 11/22/88 245
1347 HILLSBORO DRIVE 11/21/88 100 * 0.00333%
LAYTON, UT 84041
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD--05--1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 32
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/------------------CERTIFICATES HELD------------------------------
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C>
12 JAMES VASSER, JR. 07/13/87 18 139,536 07/13/87 18 S
1965 MORGAN AVENUE 08/31/87 25 150 08/26/87 21 S
MORGAN HILL, CA 95037 139,686 * 4.65616%
28 JAMES VASSER, SR. 07/13/87 35 150 08/26/87 21
1965 MORGAN AVENUE 08/31/87 150 * 0.00500%
MORGAN HILL, CA 95037
16 VICTORIA VASSER 07/13/87 22 150 08/26/87 21
1965 MORGAN AVENUE 08/31/87 150 * 0.00500%
MORGAN HILL, CA 95037
409 FRANK B. VENER 11/30/88 0 * 0.00000%
10/14/96
999 VOIDED CERTIFICATE 11/21/88 244 0 NO DATE
11/21/88 0 * 0.00000%
325 KAY WALKER NO DATE N 6 1,000 11/28/88 N1
543 BRYANT STREET 11/28/88 1,000 * 0.03333%
PALO ALTO, CA 94301
324 TOM WALKER NO DATE N 5 1,000 11/28/88 N1
543 BRYANT STREET 11/28/88 1,000 * 0.03333%
PALO ALTO, CA 94301
9 EBEN H. WALTERS 06/19/87 11 279,072 06/05/64 11/30/87 110
COEUR D'ALENE BRANCH GEBEOLOGICAL LIBR. 01/11/96 0 * 0.00000%
HAYDEN LAKE, ID 83835
RETURNED
2 SHERIL HOCK WARD 06/19/87 2 46,512 04/20/64 11/23/87 79
5716-- 131 STREET 09/01/87 0 * 0.00000%
S. E. SNOHOMISH, WA 98290
274 JENNIFER WASMER 11/21/88 296 100 11/22/88 282
1272 E. STRATFORD AVENUE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84106
231 DAVID WATERS 07/14/88 322 100 11/22/88 309
4144 W. THAYNE DRIVE 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84119
252 LORI WATERS 11/21/88 321 100 11/22/88 309
4144 W. THAYNE DRIVE 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84119
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 33
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ CERTIFICATES HELD
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C>
412 MARSHA WELLEVER 11/30/88 N 149 100 12/15/88 N1
4972 W. PONDEROSA CT. 11/30/88 100 * 0. 00333%
PARK CITY, UT 84060
94 DAVID C. WESTLEY 07/14/88 137 100 11/07/88 128
1288 SUNSET DRIVE 07/14/88 100 * 0. 00333%
SALT LAKE CITY
341 NANCY WESTPHAL NO DATE N 25 1,000 11/28/88 N1
437 WEST 36Th STREET 11/28/88 1,000 * 0.03333%
APT 28
NEW YORK, NY 10018
339 R. E. WESTPHAL NO DATE N 23 1,000 11/28/88 N1
437 WEST 36Th STREET 11/28/88 1,000 * 0.03333%
APT 2B
NEW YORK, NY 10018
340 WALT WESTPHAL NO DATE N 24 1,000 11/28/88 N1
437 WEST 36TH STREET 11/28/88 1,000 * 0.03333%
APT 28
NEW YORK, NY 10018
293 DENNIS WHARTON 11/21/88 241 100 11/17/88 213
1229 PRODO VISTA 11/21/88 100 * 0.00333%
WEST VALLEY CITY, UT 84123
294 DEBBIE WHARTON 11/21/88 242 100 11/17/88 213
11/21/88 100 * 0.00333%
321 LAURA WILKINS 11/21/88 N 1 1,000 11/28/88 N1
635-- 12TH AVENUE 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84103
320 SANDRA WILKINS 11/21/88 N 77 1,000 11/28/88 N1
635-- 12TH AVENUE 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84103
306 AMANDA WILLIAMS 11/21/88 N 53 1,000 11/28/88 N1
2876 WEST LONG DRIVE 11/28/88 1,000 * 0.03333%
LITTLETON, CO 80122
323 ALICE WILLIAMS NO DATE N 3 1,000 11/28/88 N1
P.O. BOX 2148 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
304 BONNIE WILLIAMS 11/21/88 N 51 1,000 11/28/88 N1
2876 WEST LONG DRIVE 11/28/88 1,000 * 0.03333%
LITTLETON, CO 80122
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 34
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ CERTIFICATES HELD
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C>
299 CONNIE WILLIAMS 11/21/88 N 46 1,000 11/28/88 N1
1452 LYNWOOD AVENUE 11/28/88 1,000 * 0.03333%
LOGAN, UT 84321
322 CAROL WILLIAMS NO DATE N 2 1,000 11/28/88 N1
62 WEST 400 SOUTH 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
72 DAVID WILLIAMS 09/01/87 110 418,608 11/30/87 110
62 WEST 400 SOUTH 09/01/87 418,608 * 13.95348%
SALT LAKE CITY, UT 84101
303 DAVE WILLIAMS 11/21/88 N 50 1,000 11/28/88 N1
2876 WEST LONG DRIVE 11/28/88 1,000 * 0.03333%
LITTLETON, CO 80122
363 GEOFF WILLIAMS NO DATE N 82 1,000 11/28/88 N1
P.O. BOX 2148 11/28/88 1,000 * 0.03333%
PARK CITY, UT 84060
367 GARY WILLIAMS NO DATE N 86 1,000 11/28/88 N1
78-6955 WALUA ROAD 11/28/88 1,000 * 0.03333%
KAILUA, KONA., HI 96740
73 H. D. WILLIAMS 09/01/87 111 372,096 11/30/87 111
62 WEST 400 SOUTH 09/01/87 372,096 * 12.40310%
SALT LAKE CITY, UT 84101
302 HOMER D. WILLIAMS 11/21/88 N 49 1,000 11/28/88 N1
637-- 12TH AVENUE 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84103
296 JAMES J. WILLIAMS 11/21/88 N 43 1,000 11/28/88 N1
1703 MIRAMONT DRIVE 11/28/88 1,000 * 0.03333%
FT. COLLINS, CO 80524
307 LINDSAY WILLIAMS 11/21/88 N 54 1,000 11/28/88 N1
2876 WEST LONG DRIVE 11/28/88 1,000 * 0.03333%
LITTLETON, CO 80122
297 MARY WILLIAMS 11/21/88 N 44 1,000 11/28/88 N1
62 WEST 400 SOUTH 11/28/88 1,000 * 0.03333%
SALT LAKE CITY, UT 84101
305 NATE WILLIAMS 11/21/88 N 52 1,000 11/28/88 N1
2876 WEST LONG DRIVE 11/28/88 1,000 * 0.03333%
LITTLETON, CO 80122
318 PAT WILLIAMS 11/21/88 N 71 1,000 11/28/88 N1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BD-05-1 23 NAVA LEISURE USA, INC. DATE 10/08/98
BOND/STOCKHOLDER ACCOUNTING SYSTEM PAGE 35
COMBINED HOLDER/CERTIFICATE LISTING
ACCOUNT # DATE ADDED/ CERTIFICATES HELD
NAME AND ADDRESS LST ACTV/TAX ID SUB PR NUMBER SHARES ACQ DATE TRACE CNCL DATE TRACE ALT
<S> <C> <C> <C> <C> <C> <C> <C>
1452 LYNWOOD AVENUE 11/28/88 1,000 * 0.03333%
LOGAN, UT 84321
298 ROBERT WILLIAMS 11/21/88 N 45 1,000 11/28/88 N1
1452 LYNWOOD AVENUE 11/28/88 1,000 * 0.03333%
LOGAN, UT 84321
206 SHELLEY WILLIAMS 07/14/88 264 100 11/22/88 245
2500 NORTH FORT LANE #229 11/21/88 100 * 0.00333%
LAYTON, UT 84041
137 MIKE WILSON 07/14/88 182 100 11/18/88 149
P.O. BOX 892 07/14/88 100 * 0.00333%
PARK CITY, UT 84060
317 LARRY WILLIAMS 11/21/88 N 70 1,000 11/28/88 N1
1452 LYNWOOD AVENUE 11/28/88 1,000 * 0.03333%
LOGAN, UT 84321
183 HOWARD YOKOYAMA 07/14/88 228 100 11/17/88 213
2763 SOUTH STATE 11/21/88 100 * 0.00333%
SALT LAKE CITY, UT 84115
20S SHARON YORK 07/14/88 263 100 11/22/88 245
813 EAST 525 SOUTH 11/21/88 100 * 0.00333%
LAYTON, UT 84041
TOTALS ACTIVE HOLDERS 387 ACTIVE CERTIFICATES 437 3,000,025 **
3,000,025 ***
</TABLE>
<PAGE>
SCHEDULE 2.11
DESCRIPTION OF SUITS, LITIGATIONS, ETC.
1. On September 26, 1994, a shareholder of Nava Leisure commenced a
shareholder derivative action against a company and its principal office for
breach of an exchange agreement. On December 11, 1995, a default judgment was
entered in favor of plaintiff shareholder. The judgment awarded plaintiff, and
hence Nava Leisure, the sum of $40,440.04. This judgment has been deemed
uncollectable (See notes to Nava Leisure's financial statements). Copies of the
---
pleadings and other relevant litigation papers have been provided to Senesco.
<PAGE>
SCHEDULE 2.16
BANK ACCOUNTS
None.
<PAGE>
SCHEDULE 4.1
OTHER ENTITIES OWNED OR CONTROLLED BY SENESCO
None.
<PAGE>
SCHEDULE 4.2
None.
<PAGE>
SCHEDULE 4.9
SENESCO LITIGATION
None.
<PAGE>
SCHEDULE 4.10
LIST OF PATENTS, ASSIGNMENTS OF PATENTS, TRADEMARKS, ETC.
U.S. Patent Application No. 09-105182 filed on June 26, 1998 and titled:
A Plant Lipase Gene Exhibiting Senescence-Induced Expression and a
Method for Controlling Senescence in a Plant
<PAGE>
SCHEDULE 4.15
SENESCO PROPERTY, CONTRACTS, EMPLOYEES
1. Consulting Agreements between Senesco, LLC and Dr. John E. Thompson, dated
June 26, 1998.
2. Assignment Agreement between John E. Thompson, Yuwen Hong, Katalin A. Hudak
and Senesco, LLC dated June 25, 1998.
3. Employees of Senesco are: Phillippe Escaravage, Sascha Fedyszyn and
Christian Ahrens.
<PAGE>
EXHIBIT A
STOCK OPTION PLAN
<PAGE>
NAVA LEISURE USA, INC.
1998 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are to attract and
--------------------
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, non-Employee members of the Board
and Consultants of the Company and its Subsidiaries and to promote the success
of the Company's business. Options granted under the Plan may be incentive
stock options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder. Stock purchase rights may also be
granted under the Plan.
2. Certain Definitions. As used herein, the following definitions shall
-------------------
apply:
(a) "Administrator" means the Board or any of its Committees appointed
-------------
pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" means the Committee appointed by the Board of Directors
---------
in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
------------
(f) "Company" means Nava Leisure USA, Inc., an Idaho corporation.
-------
(g) "Consultant" means any person, including an advisor, who is engaged
----------
by the Company or any Parent or subsidiary to render services and is compensated
for such services, and any director of the Company whether compensated for such
services or not.
(h) "Continuous Status as an Employee" means the absence of any
--------------------------------
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered
interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any
other leave of absence approved by the Board, provided that such leave is for a
period of not more than ninety (90) days, unless reemployment upon the
expiration of such leave is guaranteed by contract or statute, or unless
provided otherwise pursuant to Company policy adopted from time to time; or (iv)
transfers between locations of the Company or between the Company, its
Subsidiaries or its successor.
<PAGE>
(i) "Employee" means any person, including officers and directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the
National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation ("Nasdaq") System, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange for the last market
trading day prior to the time of determination as reported in the Wall
Street Journal or such other source as the Administrator deems reliable or;
(ii) If the Common Stock is quoted on Nasdaq (but not on the
National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high and low asked prices for the
Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as an
----------------------
incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(n) "Option" means a stock option granted pursuant to the Plan.
------
(o) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(p) "Optionee" means an Employee or Consultant who receives an Option.
--------
(q) "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(r) "Plan" means this 1998 Stock Incentive Plan.
----
(s) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of stock purchase rights under Section 11 below.
-2-
<PAGE>
(t) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.
(u) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
-------------------------
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is five hundred thousand (500,000) shares of Common Stock. The
shares may be authorized, but unissued, or reacquired Common Stock.
If an option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Administration With Respect to Directors and Officers.
-----------------------------------------------------
With respect to grants of Options or stock purchase rights to Employees who
are also officers or directors of the Company, the Plan shall be
administered by (A) the Board, if the Board may administer the Plan in
compliance with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") with respect to a plan intended to allow
transactions between the Company and the Optionee to be exempt for Section
16(b) of the Exchange Act, or (B) a Committee designated by the Board to
administer the Plan, which Committee shall be constituted in such a manner
as to permit the Plan to comply with Rule 16b-3 with respect to a plan
intended to allow transactions between the Company and the Optionee to be
exempt for Section 16(b) of the Exchange Act. Once appointed, such
Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule 16b-
------------------------------
3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors
nor officers.
(iii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options or stock purchase rights to
---------
Employees who are neither directors nor officers of the Company or to
Consultants, the Plan shall be administered by
-3-
<PAGE>
(A) the Board, if the Board may administer the Plan in compliance with Rule
16b-3, or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the legal requirements relating
to the administration of incentive stock option plans, if any, of Idaho
corporate law and applicable securities laws and of the Code (the
"Applicable Laws"). Once appointed, such Committee shall continue to serve
in its designated capacity until otherwise directed by the Board. From time
to time the Board may increase the size of the Committee and appoint
additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies, however
caused, and remove all members of the Committee and thereafter directly
administer the Plan, all to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options and stock purchase rights may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options and stock
purchase rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but
not limited to, the share price and any restriction or limitation or waiver
of forfeiture restrictions regarding any Option or other award and/or the
shares of Common Stock relating thereto, based in each case on such factors
as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common
Stock;
(viii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining the
amount, if any, of any deemed earnings on any deferred amount during any
deferral period);
-4-
<PAGE>
(ix) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted; and
(x) to determine the terms and restrictions applicable to
stock purchase rights and the Restricted Stock purchased by exercising such
stock purchase rights.
(c) Effect of Committee's Decision. All decisions, determinations
------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
-----------
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.
-5-
<PAGE>
7. Term of Option. The term of each Option shall be the term stated in
--------------
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
8. Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of the grant.
(B) granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the
-6-
<PAGE>
Company to retain from the total number of Shares as to which the Option is
exercised that number of Shares having a Fair Market Value on the date of
exercise equal to the exercise price for the total number of Shares as to which
the option is exercised, (6) delivery of a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds required to pay the exercise price,
(7) by delivering an irrevocable subscription agreement for the Shares which
irrevocably obligates the option holder to take and pay for the Shares not more
than twelve months after the date of delivery of the subscription agreement, (8)
any combination of the foregoing methods of payment, or (9) such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Applicable Laws. In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company.
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an
-------------------------
Optionee's consulting relationship or Continuous Status as an Employee with the
Company (as the case may be), such Optionee may, but only within ninety (90)
days (or such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
-7-
<PAGE>
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the Option at the date of
such termination, or if Optionee does not exercise such Option to the extent so
entitled within the time specified herein, the Option shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
----------------------
Section 9(b) above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may,
but only within twelve (12) months from the date of such termination (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to
-----------------
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
--- ------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. The terms of the Option shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
-8-
<PAGE>
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock purchase rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer stock purchase rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid (which price shall not be less than 50% of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the stock purchase right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator.
(b) Repurchase Option. Unless the Administrator determines
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the Committee
may determine.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
(d) Rights as a Shareholder. Once the stock purchase right is
-----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock purchase right is exercised, except as provided in Section 13
of the Plan.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
--- --------------------------------------------------------
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or stock purchase right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the Company withhold
-9-
<PAGE>
from the Shares to be issued upon exercise of the Option, or the Shares to be
issued in connection with the stock purchase right, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option or Right as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is subject to Rule 16b-3, the election must comply
with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or stock purchase
right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
13. Adjustments Upon Changes in Capitalization or Merger. Subject to any
----------------------------------------------------
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason
-10-
<PAGE>
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action. In the event of a merger or consolidation of the Company with or into
another corporation or the sale of all or substantially all of the Company's
assets (hereinafter, a "merger"), the Option shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation. In the event that such successor
corporation does not agree to assume the Option or to substitute an equivalent
option, the Board shall, in lieu of such assumption or substitution, provide for
the Optionee to have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger, the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger, the Option or right confers the
right to purchase, for each Share of stock subject to the Option immediately
prior to the merger, the consideration (whether stock, cash, or other securities
or property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or its Parent, the Board may, with the consent of the
successor corporation and the participant, provide for the consideration to be
received upon the exercise of the Option, for each Share of stock subject to the
Option, to be solely common stock of the successor corporation or its Parent
equal in Fair Market Value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.
14. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law
-11-
<PAGE>
or regulation, including the requirements of the NASD or an established stock
exchange), the Company shall obtain shareholder approval of any Plan amendment
in such a manner and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
17. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
18. Agreements. Options and stock purchase rights shall be evidenced by
----------
written agreements in such form as the Board shall approve from time to time.
19. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
-12-
<PAGE>
20. Information to Optionees. The Company shall provide to each Optionee,
------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
* * * * * * * *
-13-
<PAGE>
EXHIBIT 4.2
[SENESCO MEMBERS CERTIFIED BY MANAGING MEMBER]
<PAGE>
SENESCO MEMBERS
PERCENT
OWNERSHIP (1)
-------------
Phillippe Escaravage 56.259
Michel Escaravage 14.065
John Bradley 0.243
John Thompson 25.000
Yuwen Hong 1.000
Katalin Hudak 1.000
Sascha Fedyszyn 0.730
Christian Ahrens 0.243
Steven Katz 1.460
--------
100.000
========
I HEREBY CERTIFY THAT THIS IS A TRUE AND ACCURATE LIST OF ALL MEMBERS OF
SENESCO, LLC.
/s/ Phillipe Escaravage
-------------------------------------
Phillipe Escaravage, Managing Member
<PAGE>
NAVA LEISURE USA, INC.
1998 STOCK INCENTIVE PLAN
1. Purposes of the Plan. The purposes of this Plan are to attract and
--------------------
retain the best available personnel for positions of substantial responsibility,
to provide additional incentive to Employees, non-Employee members of the Board
and Consultants of the Company and its Subsidiaries and to promote the success
of the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or non-statutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder. Stock purchase rights may also be
granted under the Plan.
2. Certain Definitions. As used herein, the following definitions shall
-------------------
apply:
(a) "Administrator" means the Board or any of its Committees
------------
appointed pursuant to Section 4 of the Plan.
(b) "Board" means the Board of Directors of the Company.
-----
(c) "Code" means the Internal Revenue Code of 1986, as amended.
----
(d) "Committee" means the Committee appointed by the Board of
---------
Directors in accordance with paragraph (a) of Section 4 of the Plan.
(e) "Common Stock" means the Common Stock of the Company.
------------
(f) "Company" means Nava Leisure USA, Inc., an Idaho corporation.
-------
(g) "Consultant" means any person, including an advisor, who is
----------
engaged by the Company or any Parent or subsidiary to render services and is
compensated for such services, and any director of the Company whether
compensated for such services or not .
(h) "Continuous Status as an Employee" means the absence of any
--------------------------------
interruption or termination of the employment relationship by the Company or any
Subsidiary. Continuous Status as an Employee shall not be considered interrupted
in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of
absence approved by the Board, provided that such leave is for a period of not
more than ninety (90) days, unless reemployment upon the expiration of such
leave is guaranteed by contract or statute, or unless provided otherwise
pursuant to Company policy adopted from time to time; or (iv) transfers between
locations of the Company or between the Company, its Subsidiaries or its
successor.
(i) "Employee" means any person, including officers and directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. The payment
of a director's fee by the Company shall not be sufficient to constitute
"employment" by the Company.
<PAGE>
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(k) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange or a national market system including without limitation the
National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation ("Nasdaq") System, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales
were reported) as quoted on such system or exchange for the last market
trading day prior to the time of determination as reported in the Wall
Street Journal or such other source as the Administrator deems reliable or;
(ii) If the Common Stock is quoted on Nasdaq (but not on the
National Market System thereof) or regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value shall be the mean between the high and low asked prices for the
Common Stock or;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith by
the Administrator.
(l) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code.
(m) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(n) "Option" means a stock option granted pursuant to the Plan.
------
(o) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(p) "Optionee" means an Employee or Consultant who receives an
--------
Option.
(q) "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(r) "Plan" means this 1998 Stock Incentive Plan.
----
(s) "Restricted Stock" means shares of Common Stock acquired pursuant
----------------
to a grant of stock purchase rights under Section 11 below.
(t) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 13 of the Plan.
(u) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code.
-2-
<PAGE>
3. Stock Subject to the Plan. Subject to the provisions of Section 13 of
-------------------------
the Plan, the maximum aggregate number of shares which may be optioned and sold
under the Plan is five hundred thousand (500,000) shares of Common Stock. The
shares may be authorized, but unissued, or reacquired Common Stock.
If an option should expire or become unexercisable for any reason
without having been exercised in full, the unpurchased Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Administration With Respect to Directors and Officers.
-----------------------------------------------------
With respect to grants of Options or stock purchase rights to Employees who
are also officers or directors of the Company, the Plan shall be
administered by (A) the Board, if the Board may administer the Plan in
compliance with Rule 16b-3 promulgated under the Exchange Act or any
successor thereto ("Rule 16b-3") with respect to a plan intended to allow
transactions between the Company and the Optionee to be exempt for Section
16(b) of the Exchange Act, or (B) a Committee designated by the Board to
administer the Plan, which Committee shall be constituted in such a manner
as to permit the Plan to comply with Rule 16b-3 with respect to a plan
intended to allow transactions between the Company and the Optionee to be
exempt for Section 16(b) of the Exchange Act. Once appointed, such
Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to time the Board may increase
the size of the Committee and appoint additional members thereof, remove
members (with or without cause) and appoint new members in substitution
therefor, fill vacancies, however caused, and remove all members of the
Committee and thereafter directly administer the Plan, all to the extent
permitted by Rule 16b-3 with respect to a plan intended to qualify
thereunder as a discretionary plan.
(ii) Multiple Administrative Bodies. If permitted by Rule
------------------------------
16b-3, the Plan may be administered by different bodies with respect to
directors, non-director officers and Employees who are neither directors
nor officers.
(iii) Administration With Respect to Consultants and Other
----------------------------------------------------
Employees. With respect to grants of Options or stock purchase rights to
---------
Employees who are neither directors nor officers of the Company or to
Consultants, the Plan shall be administered by (A) the Board, if the Board
may administer the Plan in compliance with Rule 16b-3, or (B) a Committee
designated by the Board, which Committee shall be constituted in such a
manner as to satisfy the legal requirements relating to the administration
of incentive stock option plans, if any, of Idaho corporate law and
applicable securities laws and of the Code (the "Applicable Laws"). Once
appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board
may increase the size of the Committee and appoint additional members
-3-
<PAGE>
thereof, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies, however caused, and remove all
members of the Committee and thereafter directly administer the Plan, all
to the extent permitted by the Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan and in the case of a Committee, the specific duties delegated by the Board
to such Committee, the Administrator shall have the authority, in its
discretion:
(i) to determine the Fair Market Value of the Common Stock,
in accordance with Section 2(k) of the Plan;
(ii) to select the officers, Consultants and Employees to whom
Options and stock purchase rights may from time to time be granted
hereunder;
(iii) to determine whether and to what extent Options and stock
purchase rights or any combination thereof, are granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each such award granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but
not limited to, the share price and any restriction or limitation or waiver
of forfeiture restrictions regarding any Option or other award and/or the
shares of Common Stock relating thereto, based in each case on such factors
as the Administrator shall determine, in its sole discretion);
(vii) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common
Stock;
(viii) to determine whether, to what extent and under what
circumstances Common Stock and other amounts payable with respect to an
award under this Plan shall be deferred either automatically or at the
election of the participant (including providing for and determining the
amount, if any, of any deemed earnings on any deferred amount during any
deferral period);
(xi) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock
covered by such Option shall have declined since the date the Option was
granted; and
(x) to determine the terms and restrictions applicable to
stock purchase rights and the Restricted Stock purchased by exercising such
stock purchase rights.
-4-
<PAGE>
(c) Effect of Committee's Decision. All decisions, determinations
------------------------------
and interpretations of the Administrator shall be final and binding on all
Optionees and any other holders of any Options.
5. Eligibility.
-----------
(a) Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. An
Employee or Consultant who has been granted an Option may, if he is otherwise
eligible, be granted an additional Option or Options.
(b) Each Option shall be designated in the written option agreement
as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Options designated as Incentive Stock
Options are exercisable for the first time by any optionee during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
(c) For purposes of Section 5(b), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time the Option with respect
to such Shares is granted.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time, with or
without cause.
6. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in Section 19 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 15 of the Plan.
-5-
<PAGE>
7. Term of Option. The term of each Option shall be the term stated in
--------------
the Option Agreement; provided, however, that in the case of an Incentive Stock
Option, the term shall be no more than ten (10) years from the date of grant
thereof or such shorter term as may be provided in the Option Agreement.
However, in the case of an Option granted to an Optionee who, at the time the
Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary,
the term of the Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Option Agreement.
(8) Option Exercise Price and Consideration.
---------------------------------------
(a) The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be such price as is determined by the Board, but
shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the grant of
such Incentive Stock Option, owns stock representing more than ten percent
(10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant.
(B) granted to any Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date
of grant.
(ii) In the case of a Nonstatutory Stock Option
(A) granted to a person who, at the time of the grant of
such Option, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of the grant.
(B) granted to any person, the per Share exercise price
shall be no less than 85% of the Fair Market Value per Share on the date of
grant.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, including the method of payment, shall be determined by
the Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash, (2)
check, (3) promissory note, (4) other Shares which (x) in the case of Shares
acquired upon exercise of an Option either have been owned by the Optionee for
more than six months on the date of surrender or were not acquired, directly or
indirectly, from the Company, and (y) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised, (5) authorization from the Company to retain from the
total number of Shares as to which the Option is exercised that number of Shares
having a Fair Market Value on the date of exercise equal to the exercise price
-6-
<PAGE>
for the total number of Shares as to which the option is exercised, (6) delivery
of a properly executed exercise notice together with irrevocable instructions to
a broker to promptly deliver to the Company the amount of sale or loan proceeds
required to pay the exercise price, (7) by delivering an irrevocable
subscription agreement for the Shares which irrevocably obligates the option
holder to take and pay for the Shares not more than twelve months after the date
of delivery of the subscription agreement, (8) any combination of the foregoing
methods of payment, or (9) such other consideration and method of payment for
the issuance of Shares to the extent permitted under Applicable Laws. In making
its determination as to the type of consideration to accept, the Administrator
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company.
9. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator, including performance criteria with respect
to the Company and/or the Optionee, and as shall be permissible under the terms
of the Plan.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Administrator, consist of any
consideration and method of payment allowable under Section 8(b) of the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares, no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised.
(b) Termination of Employment. In the event of termination of an
-------------------------
Optionee's consulting relationship or Continuous Status as an Employee with the
Company (as the case may be), such Optionee may, but only within ninety (90)
days (or such other period of time as is determined by the Board, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his Option to the extent
that Optionee was entitled to exercise it at the date of such termination. To
the extent that Optionee was not entitled to exercise the
-7-
<PAGE>
Option at the date of such termination, or if Optionee does not exercise such
Option to the extent so entitled within the time specified herein, the Option
shall terminate.
(c) Disability of Optionee. Notwithstanding the provisions of
----------------------
Section 9(b) above, in the event of termination of an Optionee's consulting
relationship or Continuous Status as an Employee as a result of his total and
permanent disability (as defined in Section 22(e)(3) of the Code), Optionee may,
but only within twelve (12) months from the date of such termination (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised, at any time within twelve (12) months following the
date of death (but in no event later than the expiration date of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent the Optionee was entitled to exercise the
Option at the date of death. To the extent that Optionee was not entitled to
exercise the Option at the date of termination, or if Optionee does not exercise
such Option to the extent so entitled within the time specified herein, the
Option shall terminate.
(e) Rule 16b-3. Options granted to persons subject to Section 16(b)
----------
of the Exchange Act must comply with Rule 16b-3 and shall contain such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
(f) Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares, an Option previously granted, based on
such terms and conditions as the Administrator shall establish and communicate
to the Optionee at the time that such offer is made.
10. Non-Transferability of Options. The Option may not be sold, pledged,
------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee. The terms of the Option shall
be binding upon the executors, administrators, heirs, successors and assigns of
the Optionee.
-8-
<PAGE>
11. Stock Purchase Rights.
---------------------
(a) Rights to Purchase. Stock purchase rights may be issued either
------------------
alone, in addition to, or in tandem with other awards granted under the Plan
and/or cash awards made outside of the Plan. After the Administrator determines
that it will offer stock purchase rights under the Plan, it shall advise the
offeree in writing of the terms, conditions and restrictions related to the
offer, including the number of Shares that such person shall be entitled to
purchase, the price to be paid (which price shall not be less than 50% of the
Fair Market Value of the Shares as of the date of the offer), and the time
within which such person must accept such offer, which shall in no event exceed
thirty (30) days from the date upon which the Administrator made the
determination to grant the stock purchase right. The offer shall be accepted by
execution of a Restricted Stock purchase agreement in the form determined by the
Administrator.
(b) Repurchase Option. Unless the Administrator determines
-----------------
otherwise, the Restricted Stock purchase agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the purchaser's employment with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock purchase agreement shall be the original price paid by the
purchaser and may be paid by cancellation of any indebtedness of the purchaser
to the Company. The repurchase option shall lapse at such rate as the Committee
may determine.
(c) Other Provisions. The Restricted Stock purchase agreement shall
----------------
contain such other terms, provisions and conditions not inconsistent with the
Plan as may be determined by the Administrator in its sole discretion. In
addition, the provisions of Restricted Stock purchase agreements need not be the
same with respect to each purchaser.
(d) Rights as a Shareholder. Once the stock purchase right is
-----------------------
exercised, the purchaser shall have the rights equivalent to those of a
shareholder, and shall be a shareholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
will be made for a dividend or other right for which the record date is prior to
the date the stock purchase right is exercised, except as provided in Section 13
of the Plan.
12. Stock Withholding to Satisfy Withholding Tax Obligations. At the
--------------------------------------------------------
discretion of the Administrator, Optionees may satisfy withholding obligations
as provided in this paragraph. When an Optionee incurs tax liability in
connection with an Option or stock purchase right, which tax liability is
subject to tax withholding under applicable tax laws, and the Optionee is
obligated to pay the Company an amount required to be withheld under applicable
tax laws, the Optionee may satisfy the withholding tax obligation by electing to
have the Company withhold
-9-
<PAGE>
from the Shares to be issued upon exercise of the Option, or the Shares to be
issued in connection with the stock purchase right, if any, that number of
Shares having a Fair Market Value equal to the amount required to be withheld.
The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined (the "Tax Date").
All elections by an Optionee to have Shares withheld for this purpose
shall be made in writing in a form acceptable to the Administrator and shall be
subject to the following restrictions:
(a) the election must be made on or prior to the applicable Tax Date;
(b) once made, the election shall be irrevocable as to the particular
Shares of the Option or Right as to which the election is made;
(c) all elections shall be subject to the consent or disapproval of
the Administrator;
(d) if the Optionee is subject to Rule 16b-3, the election must
comply with the applicable provisions of Rule 16b-3 and shall be subject to such
additional conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to
Plan transactions.
In the event the election to have Shares withheld is made by an
Optionee and the Tax Date is deferred under Section 83 of the Code because no
election is filed under Section 83(b) of the Code, the Optionee shall receive
the full number of Shares with respect to which the Option or stock purchase
right is exercised but such Optionee shall be unconditionally obligated to
tender back to the Company the proper number of Shares on the Tax Date.
13. Adjustments Upon Changes in Capitalization or Merger. Subject to any
----------------------------------------------------
required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason
-10-
<PAGE>
thereof shall be made with respect to, the number or price of shares of Common
Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the
Company, the Board shall notify the Optionee at least fifteen (15) days prior to
such proposed action. To the extent it has not been previously exercised, the
Option will terminate immediately prior to the consummation of such proposed
action. In the event of a merger or consolidation of the Company with or into
another corporation or the sale of all or substantially all of the Company's
assets (hereinafter, a "merger"), the Option shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation. In the event that such successor
corporation does not agree to assume the Option or to substitute an equivalent
option, the Board shall, in lieu of such assumption or substitution, provide for
the Optionee to have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which the Option would not otherwise be
exercisable. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger, the Board shall notify the
Optionee that the Option shall be fully exercisable for a period of fifteen (15)
days from the date of such notice, and the Option will terminate upon the
expiration of such period. For the purposes of this paragraph, the Option shall
be considered assumed if, following the merger, the Option or right confers the
right to purchase, for each Share of stock subject to the Option immediately
prior to the merger, the consideration (whether stock, cash, or other securities
or property) received in the merger by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger was not solely common stock of the
successor corporation or its Parent, the Board may, with the consent of the
successor corporation and the participant, provide for the consideration to be
received upon the exercise of the Option, for each Share of stock subject to the
Option, to be solely common stock of the successor corporation or its Parent
equal in Fair Market Value to the per share consideration received by holders of
Common Stock in the merger or sale of assets.
14. Time of Granting Options. The date of grant of an Option shall, for
------------------------
all purposes, be the date on which the Administrator makes the determination
granting such Option, or such other date as is determined by the Board. Notice
of the determination shall be given to each Employee or Consultant to whom an
Option is so granted within a reasonable time after the date of such grant.
15. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend or discontinue the Plan, but no amendment, alteration, suspension
or discontinuation shall be made which would impair the rights of any Optionee
under any grant theretofore made, without his or her consent. In addition, to
the extent necessary and desirable to comply with Rule 16b-3 under the Exchange
Act or with Section 422 of the Code (or any other applicable law or regulation,
including the requirements of the NASD or an established stock exchange), the
-11-
<PAGE>
Company shall obtain shareholder approval of any Plan amendment in such a manner
and to such a degree as required.
(b) Effect of Amendment or Termination. Any such amendment or
----------------------------------
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
16. Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act of
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the Shares may
then be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned relevant provisions of law.
17. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall
relieve the Company of any liability in respect of the failure to issue or sell
such Shares as to which such requisite authority shall not have been obtained.
18. Agreements. Options and stock purchase rights shall be evidenced by
----------
written agreements in such form as the Board shall approve from time to time.
19. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the degree and manner required under applicable state and federal law.
-12-
<PAGE>
20. Information to Optionees. The Company shall provide to each Optionee,
------------------------
during the period for which such Optionee has one or more Options outstanding,
copies of all annual reports and other information which are provided to all
shareholders of the Company. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information.
* * * * * * * *
-13-
<PAGE>
EXHIBIT C
<PAGE>
PAGE 1
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (c) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1301 Definitions.
In this part:
(1) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action, or the surviving or acquiring corporation by merger or share
exchange of that issuer.
(2) "Dissenter" means a shareholder who is entitled to dissent from corporate
action under section 30-1-1302, Idaho Code, and who exercises that right when
and in the manner required by sections 30-1-1320 through 30-1-1328, Idaho Code.
(3) "Fair value," with respect to a dissenter's shares, means the value of the
shares immediately before the effectuation of the corporate action to which the
dissenter objects, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.
(4) "Interest" means interest from the effective date of the corporate action
until the date of payment, at the average rate currently paid by the corporation
on its principal bank loans or, if none, at a rate that is fair and equitable
under all the circumstances.
(5) "Record shareholder" means the person in whose name shares are registered
in the records of the corporation or the beneficial owner of shares to the
extent of the rights granted by a nominee certificate on file with a
corporation.
(6) "Beneficial shareholder" means the person who is a beneficial owner of
shares held in a voting trust or by a nominee as the record shareholder.
(7) "Shareholder" means the record shareholder or the beneficial shareholder.
[I.C., (S) 30-1-1301, as added by 1997, ch. 366 (S) 2.p. 1080.]
Sections 30-1-1301 -- 30-1-1331 (Part 13) are referred to it (S) 30-1-1106.
Official Comment
Section 1301 contains specialized definitions applicable only to part 13.
(1) The definition of "corporation" in section 1301(1) includes successor or
acquiring corporation in mergers or share exchanges within the scope of that
definition. In these transactions, the obligations of the disappearing or
acquired corporations must be assumed by the successor or acquiring corporation
and they are thus included within the definition of "corporation."
(2) The definition of "dissenter" in section 1301(2) is phrased in terms of a
"shareholder," a term that is itself specially defined in section 1301(7). The
definition of "shareholder" for purposes of part 13 differs from the
<PAGE>
PAGE 2
definition of that term used elsewhere in the Model Act. Section 140 defines
"shareholder" as used elsewhere in the Act to include only "record
shareholders" as defined in section 1301(5). Section 1301(7), on the other hand,
defines "shareholder" to include not only "record shareholders" but "beneficial
shareholders", a term that is itself defined in section 1301(6). The specially
defined terms "record shareholder" and "beneficial shareholder" appear
primarily in section 1303, which establishes the manner in which beneficial
shareholders, and record shareholders who are acting as nominees for more than
one beneficial shareholder, establish dissenters right. The broadest definition
of "shareholder" is used generally throughout the balance of part 13 in order to
permit beneficial shareholders to take advantage of the provisions of this part
as provided in section 1303.
The definition of "dissenter" in section 1301(2) is also limiting, since only
a shareholder who has performed all the conditions imposed on him by this part
in order to obtain payment for his shares is a "dissenter." Under this
definition, a shareholder who initially objects but fails to perform any of
these conditions within the times specified by this chapter loses his status as
"dissenter" under this section.
(3) The definition of "fair value" in section 1301(3) leaves to the parties
(and ultimately to the courts) the details by which "fair value" is to be
determined within the broad outlines of the definition. This definition thus
leaves untouched the accumulated case law about market value, value based on
prior sales, capitalized earnings value, and asset value. It specifically
preserves the former language excluding appreciation and depreciation in
anticipation of the proposed corporate action, but permits an exception for
equitable considerations. The purpose of this exception ("unless exclusion
would be inequitable") is to permit consideration of factors similar to those
approved by the Supreme Court of Delaware in Weinberger v. UOP, Inc., 457 A.2d
701 (Del.1983), a case in which the court found that the transaction did not
involve fair dealing or fair price: "In our view this includes the elements of
rescissory damages if the Chancellor considers them susceptible of proof and a
remedy appropriate to all the issues of fairness before him." Consideration of
appreciation or depreciation which might result from other corporate actions is
permitted; these effects in the past have often been reflected either in market
value or capitalized earnings value.
"Fair value" is to be determine immediately before the effectuation of the
corporate action, instead of the date of the shareholder's vote, as is the case
under most state statues that address the issue. This comports with the plan of
this part to preserve the dissenter's prior rights as a shareholder until the
effective date of the corporate action, rather than leaving him in a twilight
zone where he has lost his former rights, but has not yet gained his new ones.
(4) The definition of "interest" in section 1301(4) is included to make
interest computations under this part more realistic. The right to receive
interest is based on the elementary consideration that the corporation has the
use of the dissenter's money, and the dissenter has no use of it, from the
effective date of the corporate action until the date of payment. The
definition also requires the adjustment of rates to accommodate radical changes
in prevailing rates like those seen in the late 1970s and early 1980s and that
may be seen again in the future. The specification of the rate currently paid by
the corporation provides a prima facie standard which should facilitate
voluntary settlements. The date from which interest runs has been changed from
the date of the shareholders' vote to the effective date of the corporate
action, in conformity with the change of the valuation date in section 1301(3).
New Model Act part 13 completely reorganizes the provisions of the prior Model
Act previously contained in old I.C.(SS) 30-1-80 and 81. The substance of this
new part 13 is based almost entirely on the prior provisions, but what appeared
in two sections is here reorganized into the fourteen sections of part 13.
Specifically with respect to definitions, new Model Acts (S) 1301's first four
definitions are taken from old I.C. (S) 30-1-81(a) with only stylistic changes.
The last three definitions, however, are new. They were added to clarify the
intent of the part and also to integrate these definitions with those of part 1
and with the provisions in the new section 1303.
<PAGE>
PAGE 3
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1302 Right to dissent.
(1) A shareholder is entitled to dissent from, and obtain payment of the
fair value of his shares in the event of, any of the following corporate
actions:
(a) Consummation of a plan of merger to which the corporation is a party:
(i) If shareholder approval is required for the merger by section 30-1-
1103, Idaho Code, or the articles of incorporation and the shareholder is
entitled to vote on the merger; or
(ii) If the corporation is a subsidiary that is merged with its parent under
section 30-1-1104, Idaho Code;
(b) Consummation of a plan of share exchange to which the corporation is a
party as the corporation whose shares will be acquired, if the shareholder is
entitled to vote on the plan;
(c) Consummation of a sale or exchange of all, or substantially all, of the
property of the corporation other than in the usual and regular course of
business, if the shareholder is entitled to vote on the sale or exchange,
including a sale in dissolution, but not including a sale pursuant to court
order or a sale for cash pursuant to a plan by which all or substantially all of
the net proceeds of the sale will be distributed to the shareholders within one
(1) year after the date of sale;
(d) An amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenter's shares because it:
(i) Alters or abolishes a preferential right of the shares;
(ii) Creates, alters or abolishes a right in respect of redemption, including
a provision respecting a sinking fund for the redemption or repurchase, of the
shares;
(iii) Alters or abolishes a preemptive right of the holder of the shares to
acquire shares or other securities;
(iv) Excludes or limits the right of the shares to vote on any matter, or to
cumulate votes, other than a limitation by dilution through issuance of shares
or other securities with similar voting rights; or
(v) Reduces the number of shares owned by the shareholder to a fraction of
a share if the fractional share so created is to be acquired for cash under
section 30-1-604, Idaho Code; or
(e) Any corporate action taken pursuant to a shareholder vote to the extent
the articles of incorporation, bylaws, or a resolution of the board of
directors provides that voting or nonvoting shareholders are entitled to
dissent and obtain payment for their shares.
<PAGE>
PAGE 4
(2) A shareholder entitled to dissent and obtain payment for his shares
under this part may not challenge the corporate action creating his entitlement
unless the action is unlawful or fraudulent with respect to the shareholder or
the corporation.
(3) This section does not apply to the holders of shares of any class or
series if the shares of the class or series are redeemable securities issued by
a registered investment company as defined pursuant to the investment company
act of 1940 (15 U.S.C. 80a-15 U.S.C. 80a-64).
(4) Unless the articles of incorporation of the corporation provide
otherwise, this section does not apply to the holders of shares of a class or
series if the shares of the class or series were registered on a national
securities exchange, were listed on the national market systems of the national
association of securities dealers automated quotation system or were held of
record by at least two thousand (2,000) shareholders on the date fixed to
determine the shareholders entitled to vote on the proposed corporate action.
[I.C., (S) 30-1-1302, as added by 1997, ch. 366 (S) 2, p. 1080.]
This section is referred to in (SS) 30-1-1321 and 30-1-1372.
Official Comment
1. TRANSACTIONS GIVING RISE TO DISSENTERS' RIGHTS. Section 1302(1)
establishes the scope of a shareholder's right to dissent (and his resulting
right to obtain payment for his shares) by defining the transactions with
respect to which a right to dissent exists. These transactions are:
(a) A plan of merger if the shareholder (i) is entitled to vote on the
merger under section 1103 or pursuant to provisions in the articles of
incorporation, or (ii) is a shareholder of a subsidiary that is merged with a
parent under section 1104. The right to vote on a merger under section 1103
extends to corporation whose separate existence disappears in the merger and to
the surviving corporation if the number of its outstanding shares is increased
by more than 20 percent as a result of the merger.
(b) A share exchange under section 1102 if the corporation is a party
whose shares are being acquired by the plan and the shareholder is entitled to
vote on the exchange.
(c) A sale or exchange of all or substantially all of the property of the
corporation not in the usual course of business under section 1202 if the
shareholder is entitled to vote on the sale or exchange. Section 1302(1)(c)
generally grants dissenters' rights in connection with sales in the process of
dissolution but excludes them in connection with sales by court order and sales
for cash that require substantially all the proceeds to be distributed to the
shareholders within one year. The inclusion of sales in dissolution is designed
to ensure that the right to dissent cannot be avoided by characterizing sales as
made in the process of dissolution long before distribution is made. An
exception is provided for sales for cash pursuant to a plan that provides for
distribution within one year. These transactions are unlikely to be unfair to
minority shareholders since majority and minority are being treated in precisely
the same way and all shareholders will ultimately receive cash for their shares.
A sale other than for cash gives rise to a right of dissent since property
sometimes cannot be converted into cash until long after receipt and a minority
shareholder should not be compelled to assume the risk of delays or market
declines. Similarly, a plan that provides for a prompt distribution of the
property received gives rise to the right of dissent since the minority
shareholder should not be compelled to accept for his shares different
securities or other property that may not be readily marketable.
The exclusion of court-ordered sales from the dissenter's right is based on
the view that court review and approval ensures that an independent appraisal of
the fairness of the transaction has been made.
(d) Amendments to articles of incorporation that impair the shareholders'
rights as shareholders in any of the enumerated ways. The reasons for granting a
right of dissent in these situations are similar to those for granting such
rights in cases of merger and transfer of assets. The grant of these rights
increases the security of investors by allowing them to escape when the nature
of their investment rights is fundamentally altered or they are compelled to
accept cash for their investment in an amount established by the corporation.
The grant also enhances the freedom of the majority to make changes, because the
existence of an escape hatch makes fair and reasonable a change that might be
unfair if it forced a fundamental change of rights upon unwilling investors
<PAGE>
PAGE 5
without giving them a reasonable alternative.
(e) Any corporate action to the extent the articles, bylaws, or a
resolution of the board of directors grant a right of dissent. Corporations may
wish to grant on a voluntary basis dissenters rights in connection with
important transactions (e.g., those submitted for shareholder approval). The
grant may be to nonvoting shareholders in connection with transactions that give
rise to dissenters' rights with respect to voting shareholders. The grant of
dissenters' rights may add to the attractiveness of preferred shares, and may
satisfy shareholders who would, in the absence of dissenters' rights, sue to
enjoin the transaction. Also, in situations where the existence of dissenters'
rights may otherwise be disputed, the voluntary offer of those rights under this
section will avoid a dispute.
Generally, only shareholders who are entitled to vote on the transaction
are entitled to assert dissenters rights with respect to the transaction. The
right to vote may be based on the articles of incorporation or other provisions
of the Model Act. For example, a class of nonvoting shares may nevertheless be
entitled to vote (either as a separate voting group or as part of the general
voting group) on an amendment to the articles of incorporation that affects them
as provided in one of the ways set forth in section 1004; such a class is
entitled to assert dissenters' rights if the transaction also falls within
section 1302. On the other hand, such a class does not have the right to vote on
a sale of substantially all the corporation's assets not in the ordinary course
of business, and therefore that class is not entitled to assert dissenters'
rights with respect to that sale. One exception to this principle is the merger
of a subsidiary into its parent under section 1104 in which minority
shareholders of the subsidiary have the right to assert dissenters' rights even
though they have no right to vote.
2. EXCLUSIVITY OF DISSENTERS' RIGHTS. Section 1302(2) basically adopts
the New York formula as to exclusivity of the dissenters' remedy of this part.
The remedy is the exclusive remedy unless the transaction is "unlawful" or
"fraudulent." The theory underlying this section is as follows: when a majority
of shareholders has approved a corporate change, the corporation should be
permitted to proceed even if a minority considers the change unwise or
disadvantageous, and persuades a court that this is correct. Since dissenting
shareholders can obtain the fair value of their shares, they are protected from
pecuniary loss. Thus in general terms an exclusivity principle is justified.
But the prospect that shareholders may be "paid off" does not justify the
corporation in proceeding unlawfully or fraudulently. If the corporation
attempts an action in violation of the corporation law on voting, in violation
of clauses in articles of incorporation prohibiting it, by deception of
shareholders, or in violation of a fiduciary duty--to take some examples--the
court's freedom to intervene should be unaffected by the presence or absence of
dissenters' rights under this part. Because of the variety of situations in
which unlawfulness and fraud may appear, this section makes no attempt to
specify particular illustrations. Rather, it is designed to recognize and
preserve the principles that have developed in the case law of Delaware, New
York and other states with regard to the effect of dissenters' rights on other
remedies of dissent shareholders. See Weinberger v. UOP, Inc., 457 A.2d 701
(Dcl. 1983)(appraisal remedy may not be adequate "where fraud,
misrepresentation, self-dealing, deliberate waste of corporate assets, or gross
palpable overreaching are involved"). See also Vorenberg, "Exclusiveness of the
Dissenting Stockholders' Appraisal Right, "77 HARV. L. REV. 1189 (1964).
New Model Act (S) 1302(1) is based on prior I.C. (S) 30-1-80(a) and (c);
new section 1302(2) is based on prior (S)80(d). Only minor substantive and
stylistic changes are made in both new subsections (1) and (2).
New subsection (1) does involve amendment to make it clear that only
shareholders who were entitled to vote are entitled to dissenters' rights.
Further, new subsection (1)(d)(v) was added to extend dissenters rights to an
articles amendment that involved a "cash out" effectuated through the device of
a reverse share split.
The 1997 revision added new subsections (3) and (4) to the Official Text on
the theory that the market provides a remedy for dissenting shareholders of the
companies described therein.
<PAGE>
PAGE 6
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1303 Dissent by nominees and beneficial owners.
(1) A record shareholder may assert dissenters' rights as to fewer than
all the shares registered in his name only if he dissents with respect to all
shares beneficially owned by any one (1) person and notifies the corporation in
writing of the name and address of each person on whose behalf he asserts
dissenters rights. The rights of a partial dissenter under this subsection are
determined as if the shares as to which he dissents and his other shares were
registered in the names of different shareholders.
(2) A beneficial shareholder may assert dissenters' rights as to shares
held on his behalf only if:
(a) He submits to the corporation the record shareholder's written consent
to the dissent not later than the time the beneficial shareholder asserts
dissenters' rights; and
(b) He does so with respect to all shares of which he is the beneficial
shareholder or over which he has power to direct the vote.
[I.C., (S) 30-1-1303, as added by 1997, ch. 366 (S)2, p. 1080.]
Official Comment
Section 1303 addresses the relationship between dissenters' rights and the
widespread practice of nominee or street name ownership of publicly held shares.
Generally, a shareholder must dissent with respect to all the shares he owns
or over which he has power to direct the vote. If a record shareholder is a
nominee for several beneficial shareholders, however, some of whom wish to
dissent and some of whom do not, section 1303(1) permits the record shareholder
to dissent with respect to a portion of the shares owned by him but only with
respect to all the shares beneficially owned by a single person. This limitation
is necessary to prevent speculative abuse by a single beneficial shareholder who
is not fundamentally opposed to the proposed corporate action but who may wish
to gamble, as to some of his shares, on the possibility of a high payment to
dissenters.
Section 1303(1) also requires a record shareholder who dissents with
respect to a portion of the shares held by him to notify the corporation of the
name and address of the beneficial owner on whose behalf he has dissented.
Section 1303(2) permits a beneficial shareholder to assert dissenters'
rights directly if he submits the record shareholder's written consent.
Generally, corporations treat the record shareholder as the owner of shares, and
a beneficial shareholder is entitled to assert dissenters' rights only as set
forth in this section. It would be foreign to the premises underlying nominee
and street name ownership to require these record shareholders to forward
demands and participate in litigation on behalf of their clients. In order to
make dissenters rights effective without burdening record shareholders,
beneficial shareholders should be allowed to assert their own claims as provided
in this subsection. The beneficial shareholder is required to submit a written
consent by the record shareholder to his assertion of dissenters' rights to
verify the beneficial shareholder's entitlement and to permit the protection of
any security interest in the shares. In practice, a broker's customer who
receives a forwarded notice of proposed corporate action and who wishes to
dissent may request the broker to supply him with the name of the record
shareholder (which may be a house nominee or a nominee of the Depository Trust
Company), and a
<PAGE>
PAGE 7
form of consent signed by the record shareholder. From that point forward, the
corporation must deal with the beneficial shareholder.
New Model Act (S) 1303 is based on prior I.C. (S) 30-1-80(b), with
stylistic changes. The three new definitions added to section 1301 ("record
shareholder," "beneficial shareholder," and "shareholder") led to several
clarifying changes in the language of section 1303.
<PAGE>
Page 8
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenter's Rights
Copyright(C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1320 Notice of dissenters' rights.
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is submitted to a vote at a shareholders' meeting, the
meeting notice must state that shareholders are or may be entitled to assert
dissenters' rights under this part and be accompanied by a copy of this part.
(2) If corporate action creating dissenters' rights under section 30-1-1302,
Idaho Code, is taken without a vote of shareholders, the corporation shall
notify in writing all shareholders entitled to assert dissenters rights that the
action was taken and send them the dissenters' notice described in section
30-1-1322, Idaho Code.
[I.C.,(S) 30-1-1320, as added by 1997, ch. 366 (S) 2,p. 1080.]
Sections 30-1-1320 -- 30-1-1328 are referred to in (S) 30-1-1331,
Sections 30-1-1320 -- 30-1-1328 are referred to in 30-1-1301.
Official Comment
Section 1320(1) requires the corporation to notify record shareholders of the
existence of dissenters rights before the vote is taken on the corporate action.
This notice provides the reassurance to investors that the right to dissent is
intended to provide because many shareholders have no idea what rights of
dissent they may have or how to assert them. If the corporation is uncertain
whether or not the shareholders have dissenters rights, it may comply with this
notice requirement by stating that the shareholders "may have" dissenters
rights.
A similar requirement of notice is expressly required by proxy rules, by the
dissenters rights statutes of several states, and possibly under more general
disclosure requirements of federal and state securities laws. Section 1320(2)
provides that notice be given after the action is taken in situations where the
action is validly taken without a vote of shareholders, e.g., in a merger of a
subsidiary into its parent under section 1104. This notice may be combined with
the dissenters' notice required by section 1322.
New Model Act (S) 1320(1) is based on prior I.C. (S) 30-1-81(b), and section
1320(2) is based on the second sentence of old I.C. (S) 30-1-81(d). Both new
subsections include stylistic and clarifying changes.
<PAGE>
PAGE 9
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1321 Notice of intent to demand payment.
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is submitted to a vote at a shareholders' meeting, a
shareholder who wishes to assert dissenters' rights:
(a) Must deliver to the corporation before the vote is taken written
notice of his intent to demand payment for his shares if the proposed action is
effectuated; and
(b) Must not vote his shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1)
of this section is not entitled to payment for his shares under this part.
[I.C., (S) 30-1-1321, as added by 1997, ch. 366 (S) 2, p. 1080.]
Official Comment
If a shareholder's vote is called for, section 1321(1) requires the
shareholder to give notice of his intent to demand payment before the vote on
the corporate action is taken. This notice enables other voters to determine how
much of a cash payment may be required. It also serves to limit the number of
persons to whom the corporation must give further notice, including the
technical details of depositing share certificates. This subsection has no
application to actions taken without a shareholder vote.
In order to be and remain a dissenter eligible to demand payment for his
shares, the section requires that a shareholder must not only give the notice
required by this section but must also vote against, or abstain from voting on,
the proposal.
Prior to the adoption of this new Model Act (S) 1321, Idaho and Ohio were
the only jurisdictions that did not require the shareholder to notify the
corporation of her intent to dissent before the shareholders' meeting or before
the vote on the particular action is taken. In the words of the Idaho bar
committee at the time of the 1979 revision, "...this requirement unduly limited
dissenting rights. Many shareholders are not sufficiently informed of corporate
action and dissenting rights to properly give such a notice prior to the vote on
the issue." So new Model Act (S) 1321, subsection (1)(a) changes prior Idaho
law. The 1997 revisers determined that Idaho should adopt this provision in
keeping with all other jurisdictions, except Ohio.
Subsection (1)(b), on the other hand, simply restates the prior requirement
that Idaho shares with all jurisdictions.
<PAGE>
PAGE 10
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1322 Dissenters' notice.
(1) If proposed corporate action creating dissenters' rights under section
30-1-1302, Idaho Code, is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders who satisfied the
requirements of section 30-1-1321, Idaho Code.
(2) The dissenters' notice must be sent no later than ten (10) days after
the corporate action was taken, and must:
(a) State where the payment demand must be sent and where and when
certificates for certificated shares must be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the proposed
corporate action and requires that the person asserting dissenters rights
certify whether or not he acquired beneficial ownership of the shares before
that date;
(d) Set a date by which the corporation must receive the payment demand,
which date may not be fewer than thirty (30) nor more than sixty (60) days after
the date the notice in subsection (1) of this section is delivered; and
(e) Be accompanied by a copy of this part.
[I.C., (S) 30-1-1322, as added by 1997, ch. 366 (S) 2, p. 1080.]
This section is referred to in (S)(S) 30-1-1326 and 30-1-1320.
Official Comment
The basic purpose of section 1322 is to require the corporation to tell all
actual or potential dissenters what they must do in order to take advantage of
their right of dissent. The requirements of what this notice (called a
"dissenters' notice") must contain are spelled out in detail to ensure that this
notice serves this basic purpose.
In the case of an action that is submitted to the vote of shareholders, the
dissenters' notice must be sent only to those persons who gave notice of their
intention to dissent under this section 1321 and who refrained from voting
in favor of the proposed actions. In the case of a transaction not involving a
vote by shareholders, the dissenters' notice must be sent to all persons who are
eligible to dissent and demand payment. In either case the dissenters' notice
must be sent within 10 days after the corporate action is taken and must be
accompanied by a copy of this part.
The notice must contain or be accompanied by a form which a person
asserting dissenters rights may use to complete the demand for payment under
section 1323. The form must specify the date by which it must be received by the
corporation, which date must be at least 30 days after the effective date of the
notice of how to
<PAGE>
PAGE 11
demand payment.
The dissenters' notice must also specify where and when share certificates
must be deposited, or, in the case of uncertificated shares, when restrictions
on transfer will become effective under section 1324. The date for deposit of
share certificates may not be set at a date earlier than the date for receiving
the demand for payment.
Section 1322(2)(c) requires the corporation to specify the date of the
first announcement to news media or to shareholders of the terms of the proposed
corporate action. This is the critical date for determining the rights of
shareholder-transferees: persons who became shareholders prior to that date are
entitled to the full right to dissent and obtain payment for their shares, while
persons who became shareholders on or after that date are entitled only to the
more limited rights provided by section 1327. See the Official Comments to
sections 1323 and 1327. It is appropriate for the corporation to furnish this
critical date since it knows when information relating to the transaction was
publicly released. The date selected should be the date the terms were
announced, not the earlier date when consideration of the proposed transaction
may have been announced.
Under prior I.C. (S) 30-1-81(d), the required notice went to all
shareholders who did not vote in favor of the proposed action. New Model Act (S)
1322(1) would require notice only to those shareholders who themselves noticed
the corporation under section 1321(1)(a). Again, our existing law is more
"shareholder friendly." But only Ohio remains so friendly and the 1997 revisers
decided to opt for uniformity here. New subsection (2) largely tracks prior I.C.
(S) 30-1-81(d), with the following minor changes:
(1) specification that the notice must go out within ten (10) days after
the corporate action at issue;
(2) additional detail in subsection (2)(c) requiring certain information
be provided on the form for demanding payment; and
(3) an outside limit of sixty (60) days within which the payment demand
must be received.
<PAGE>
PAGE 12
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1323 Duty to demand payment.
(1) A shareholder sent a dissenters' notice described in section 30-1-
1322, Idaho Code, must demand payment, certify whether he acquired beneficial
ownership of the shares before the date required to be set forth in the
dissenters' notice pursuant to section 30-1-1322(2)(c), Idaho Code, and, with
respect to any certificated shares, deposit his certificates in accordance with
the terms of the notice.
(2) The shareholder who demands payment and, with respect to any
certificated shares, deposits his share certificates under subsection (1) of
this section retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
(3) A shareholder who does not demand payment or deposit his share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for his shares under this part.
[I.C., (S) 30-1-1323, as added by 1997, ch. 366 (S) 2, p. 1080.]
This section is referred to in (S) 30-1-1325.
Official Comment
The demand for payment required by section 1323 is the definitive statement
by the dissenter. In the case of a transaction involving a vote by shareholders,
it is a confirmation of the 'intention' expressed earlier; in the case of any
other transaction, it is the person's first statement of position. In either
event, the filing of these demands informs the corporation of the extent of the
potential cash drain if it proceeds with the proposed corporate action. The
demand for payment must include a certificate as to whether the date on which
the dissenter acquired ownership of the shares was before (or on or after) the
announcement date. See section 1322(2)(c). This information permits the issuer
to detect acquisitions made for speculative or obstructive purposes and to
exercise its right under section 1327 to defer payment of compensation for these
shares.
Section 1323(1) also requires a person who files a demand for payment to
deposit his share certificates as directed by the corporation in its dissenters'
notice. The deposit of share certificates is necessary to prevent dissenters
from giving themselves a 30-day option to take payment if the market price of
the shares goes down, but sell their shares on the open market if the price goes
up. If this kind of speculation were possible, all sophisticated investors might
be expected to file demands that they would not intend to carry through unless
the price should fall. If the shares are not represented by certificates, the
corporation can prevent speculation by restricting their transfer, as authorized
by section 1324.
With respect to certificated shares, this provision differs from many
statutes in that the certificates are 'deposited' for retention, rather than
"submitted for notation." This change assumes that the corporation will retain
the certificates unless it fails to effectuate the proposed corporate action; it
thus avoids the need of sending the certificates back to the shareholders, only
to be surrendered again when payment is made. In most cases, payment will be
made promptly, and the shuttling of certificates back and forth is unnecessary.
A person who fails to file the demand for payment or does not deposit his
share certificates as required by
<PAGE>
PAGE 13
section 1323(1) loses his status as a dissenter entitled to payment for his
shares. But a person who fails to certify whether he acquired his shares before
(or on or after) the announcement date does not lose his right to dissent; if he
does not thereafter establish that he acquired his shares before the
announcement date, the corporation may treat him as an after-acquiring
shareholder under section 1327.
A shareholder who deposits his shares retains all other rights of a shareholder
until those rights are modified by effectuation of the proposed corporate
action. See section 1323(2).
New Model Act (S) 1323, subsection (1) makes express what was implicit in prior
I.C (S) 30-1-81(e)'s first sentence, namely the requirement that the shareholder
file a formal demand for payment. Subsection (1) also requires that the
shareholder deposit certificates and certify when he obtained ownership of the
shares, both as contemplated in other provisions of part 13.
New subsection (2) is based on prior I.C. (S) 30-1-81(e)'s first sentence, with
stylistic changes.
We have added to the Official Text in subsections (1) and (2) the references to
"certificated shares."
<PAGE>
PAGE 14
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1324 Share restrictions.
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under section 30-1-1326, Idaho
Code.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are
cancelled or modified by the taking of the proposed corporate action.
[I.C., (S) 30-1-1324, as added by 1997, ch 366 (S) 2,p. 1080.]
Official Comment
Section 1324 deals with uncertificated shares in the dissent process. Section
1323(1) requires certificated shares to be deposited as directed by the
corporation in its dissenters' notice; the restrictions on transfer of
uncertificated shares provided by this section impose an analogous restriction
on uncertificated shares for the same reasons. See the Official Comment to
section 1323.
Section 1324(2) makes express that the restriction on transfer of shares
provided by this section does not affect any other rights of the shareholder
until these rights are modified by the corporate action.
New Model Act (S) 1324 is based on prior I.C. (S) 30-1-81(e)'s second and
third sentences, with stylistic changes. The first sentence in prior I.C. (S)
30-1-81(e) is relocated as new section 1323(3).
<PAGE>
PAGE 15
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1325 Payment.
(1) Except as provided in section 30-1-1327, Idaho Code, as soon as the
proposed corporate action is taken, or upon receipt of a payment demand, the
corporation shall pay each dissenter who complied with section 30-1-1323, Idaho
Code, the amount the corporation estimates to be the fair value of his shares,
plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than sixteen (16) months before the date of payment, an income
statement for that year, a statement of changes in shareholders' equity for that
year, and the latest available interim financial statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under section
30-1-1328, Idaho Code; and
(e) A copy of this part.
[I.C., (S) 30-1-1325, as added by 1997, ch. 366 (S) 2. p. 1080.]
This section is referred to in (S) 30-1-1327 and 30-1-1328,
Official Comment
Section 1325 changes the relative balance between corporation and
dissenting shareholders by requiring immediate payment by the corporation upon
the completion of the transaction or (if the transaction did not need
shareholder approval and has been completed) upon receipt of the demand for
payment. The corporation may not wait for a final agreement on value before
making payment, and the shareholder has the immediate use of the amount
determined by the corporation to represent fair value without waiting for the
conclusion of appraisal proceedings.
This obligation to make immediate payment is based on the view that since
the person's rights as a shareholder are terminated with the completion of the
transaction, he should have immediate use of the money to which the corporation
agrees it has no further claim. A difference of opinion over the total amount to
be paid should not delay payment of the amount that is undisputed.
Since the shareholder must decide whether or not to accept the payment in
full satisfaction, he must be furnished at this time with the financial
information specified in section 1325(2), with a reminder of his further rights
and liabilities, and with a copy of this part.
New Model Act (S) 1325 is based on prior I.C. (S) 30-1-81(f)(3), with
stylistic changes. Subsection (2)(c) is new,
<PAGE>
PAGE 16
ID ST s 30-1-1325
the idea being that provision of such information is appropriate when payment
is made.
<PAGE>
PAGE 17
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1326 Failure to take action.
(1) If the corporation does not take the proposed action within sixty (60)
days after the date set for demanding payment and depositing share certificates,
the corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under section 30-1-1322, Idaho Code, and repeat the payment
demand procedure.
[I.C., (S) 30-1-1326, as added by 1997, ch. 336 (S) 2, p. 1080.]
This section is referred to in (S) 30-1-1324.
Official Comment
Section 1326 essentially grants the corporation 60 days after the payment
demand date to complete the transaction and make payment for the shares as
required by section 1325. If the corporation is unable to complete the
corporate action within 60 days, it must release the shares, and give a new
notice when it is ready to repeat the cycle. This requirement prevents the
corporation from holding the dissenter indefinitely in a position where he has
no possibility of realizing on his shares either by obtaining payment from the
corporation or by selling them. If the transaction has been effected but the
corporation fails to make payment as required by this part, it is subject to the
sanctions of section 1331(2).
Section 1326(2) makes it clear that the corporation at any time after
returning the deposited shares may send a new dissenters' notice under section
1322 and repeat the procedure.
New Model Act (S) 1326 corresponds directly to and is based on prior I.C (S)
30-1-81(f)(1) and (2), with stylistic changes. There is a slight change in that
whereas old section 81(f)(1) referred to both failing to take the corporate
action and failing to make payment as the triggering events, new section 1326
refers only to failing to take the corporate action. The idea seems to be that
the operative act triggering this section should be simply the failure to take
the corporate action.
<PAGE>
PAGE 18
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1327 After-acquired shares.
(1) A corporation may elect to withhold payment required by section
30-1-1325, Idaho Code, from a dissenter unless he was the beneficial owner of
the shares before the date set forth in the dissenters' notice as the date of
the first announcement to news media or to shareholders of the terms of the
proposed corporate action.
(2) To the extent the corporation elects to withhold payment under subsection
(1) of this section, after taking the proposed corporate action, it shall
estimate the fair value of the shares, plus accrued interest, and shall pay this
amount to each dissenter who agrees to accept it in full satisfaction of his
demand. The corporation shall send with its offer a statement of its estimate of
the fair value of the shares, an explanation of how the interest was
calculated, and a statement of this dissenter's rights to demand payment under
section 30-1-1328, Idaho Code.
[I.C., (S) 30-1-1327, as added by 1997, ch. 366 (S) 2.p. 1080.]
This section is referred to in (S) 30-1-1325.
Official Comment
Section 1327 provides for separate treatment of shares acquired on or after
the date of public announcement of the proposed corporation action; this date is
specified by the corporation in its dissenters' notice under section 1322. At
the corporation's option, holders of shares acquired on or after this date are
not entitled to immediate payment under section 1325; rather, they may receive
only an offer of payment which is conditioned on their agreement to accept it in
full satisfaction of their claim. If the right of unconditional immediate
payment were granted as to all after-acquired shares, speculators and others
might be tempted to buy shares merely for the purpose of dissenting. Since the
function of dissenters' rights is to protect investors against unforeseen
changes, there is no need to give equally favorable treatment to purchasers who
knew or should have known about the proposed changes.
Corporations are given discretion whether to apply section 1327 to
after-acquired shares. Considerations of simplicity and harmony may prompt the
corporation to make immediate payment for shares acquired on or after the
specified date as well as for preacquired shares.
The date used as a cut-off for determining the application of this section is
when "the terms" of the transaction are first announced to the news media or
shareholders. The cut-off should not be set at an earlier date, such as when the
first public statement that the corporate action was under consideration was
made, because the goal of this section is to prevent use of dissenters' rights
as a speculative device after the terms of the transaction are announced. See
the Official Comment to section 1322.
A dissenter under this section may accept the offered payment in full
satisfaction; if he does not, he is entitled to demand a judicial determination
of the amount to which he is entitled under sections 1328 and 1330. He is then
entitled to payment of the amount so determined at the termination of the
proceeding.
New Model Act(S) 1327 is based on prior I.C. (S) 30-1-81(j)(1), with the
usual stylistic changes. The changes make it clearer that the special
unfavorable treatment of after-acquired shares is voluntary with the corporation
and applicable to those who acquired the shares on the date of the announcement
as well as thereafter.
<PAGE>
PAGE 19
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1328 Procedure if shareholder dissatisfied with payment or offer.
(1) A dissenter may notify the corporation in writing of his own estimate of
the fair value of his shares and amount of interest due, and demand payment of
his estimate, less any payment under section 30-1-1325, Idaho Code, or reject
the corporation's offer under section 30-1-1327, Idaho Code, and demand payment
of the fair value of his shares and interest due, if:
(a) The dissenter believes that the amount paid under section 30-1-1325, Idaho
Code, or offered under section 30-1-1327, Idaho Code, is less than the fair
value of his shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under section 30-1-1325, Idaho Code,
within sixty (60) days after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions imposed
on uncertified shares within sixty (60) days after the date set for demanding
payment.
(2) A dissenter waives his right to demand payment under this section unless
he notifies the corporation of his demand in writing under subsection (1) of
this section within thirty (30) days after the corporation made or offered
payment for his shares.
[I.C., (S) 30-1-1328, as added by 1997, ch. 336 (S) 2,p. 1080.]
This section is referred to in (S) (S) 30-1-1330 and 30-1-1331.
Official Comment
Section 1328 also departs significantly from the prior law of dissenters
rights.
The dissenter who is not content with the corporation's remittance must state
in writing the amount he is willing to accept. A dissenter who acquired his
shares after public announcement of the transaction (section 1327) and is
dissatisfied with the corporation's offer must also state in writing the amount
he is willing to accept. A dissenter cannot, by remaining silent, force the
corporation into the expense and delay of a judicial appraisal. Furthermore, if
his supplemental demand is unreasonable, he runs the risk of being assessed
litigation expenses under section 1331. The provisions are designed to encourage
settlement without a judicial proceeding.
A dissenter to whom the corporation has made payment (or who has been offered
payment under section 1327) must make his supplemental demand within 30 days
after receipt for the payment (or offer of payment) in order to permit the
corporation to make an early decision on initiating appraisal proceedings. If he
fails to do so, he loses the right to demand additional payment under section
1328(2).
If the corporation, having failed to make payment, also fails to return the
certificates previously deposited or release the restrictions on transfer of
uncertified securities within 60 days, the shareholder may treat the shares as
purchased by the corporation and demand payment of the full amount claimed under
this section. See section
<PAGE>
ID ST s 30-1-1328 PAGE 20
1330(1). This provision creates no hardship for the corporation since, if it
cannot complete the transaction within 60 days, it may return the certificates
(or release the restrictions on uncertified shares) and start the process over
again at any time.
New Model Act (S) 1328 is based prior I.C (SS) 30-1-81(g) and (j)(2), with of
course stylistic changes. "Technical" changes have been made in new subsection
(1) to assure its applicability upon either the failure to make payment if the
action was taken or the failure to return the shares if the action was not
taken.
<PAGE>
PAGE 21
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenter's Rights
Copyright(C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1330 Court action to determine share value.
(1) If a demand for payment under section 30-1-1328, Idaho Code, remains
unsettled, the corporation shall commence a proceeding within sixty (60) days
after receiving the payment demand and petition the court to determine the fair
value of the shares and accrued interest. If the corporation does not commence
the proceeding within the sixty-day period, it shall pay each dissenter whose
demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the Idaho district court
of the county where a corporation's principal office or, if none in this state,
its registered office is located. If the corporation is a foreign corporation
without a registered office in this state, it shall commence the proceeding in
the county in this state where the registered office of the domestic corporation
merged with or whose shares were acquired by the foreign corporation was
located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding, as in an
action against their shares, and all parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the court in which the proceeding is commenced under
subsection (2) of this section is plenary and exclusive. The court may appoint
one (1) or more persons as appraisers to receive evidence and recommend decision
on the question of fair value. The appraisers have the powers described in the
order appointing them, or in any amendment to it. The dissenters are entitled to
the same discovery rights as parties in other civil proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgement:
(a) For the amount, if any, by which the court finds the fair value of his
shares, plus interest, exceeds the amount paid by the corporation; or
(b) For the fair value, plus accrued interest, of his after-acquired shares
for which the corporation elected to withhold payment under section 30-1-1327,
Idaho Code.
[.I.C., (S) 30-1-1330, as added by 1997, ch. 366 (S) 2,p. 1080.]
Official Comment
Section 1330 retains the concept of judicial appraisal as the ultimate means
of determining fair value. The proceeding is to be commenced by the corporation
within 60 days after receiving a demand for payment under section 1328. Section
1330(1) makes this time period jurisdictional; if the petition is not commenced
within this period the corporation must pay the additional amounts demanded by
the shareholders under section 1328. See the Official Comment to that section.
Each shareholder may sue directly for this amount, if necessary, and in an
appropriate case may be entitled to charge the corporation with the costs of
suit.
<PAGE>
PAGE 22
All demands for payment made under section 1328 are to be resolved in a
single proceeding brought in the county where the corporation's principal
office is located or, if none, in other specified counties. All shareholders
making section 1328 demands must be made parties, with service by publication
authorized if necessary. Appraisers may be appointed within the discretion of
the court. The final judgement establishes not only the fair value of the shares
in the abstract but also determines how much each shareholder who made a section
1328 demand should actually receive.
If the corporation fails to commence a judicial proceeding to establish the
fair value of the shares as required by this section, it must pay the full
amount claimed under this section.
New Model Act (S) 1330 is based on prior I.C. (S) 30-1-81(h), with both the
usual stylistic changes and at least one minor substantive change. A minor
substantive revision is made with respect to the designated court in subsection
(2). Under prior I.C. (S) 30-1-81(h)(2), the "appropriate" court is the district
court in the county where the registered office is located. Under new
subsection (2), this is changed to the county of the principal office, unless
there is none. We have seen similar changes throughout the new Model Act in
other sections involving judicial proceedings involving internal corporate
affairs.
<PAGE>
PAGE 23
IDAHO CODE
TITLE 30. CORPORATIONS
CHAPTER 1. GENERAL BUSINESS CORPORATIONS
Part 13. Dissenters' Rights
Copyright (C) 1948-1997 by Michie, a division of Reed Elsevier Inc. and Reed
Elsevier Properties Inc. All rights reserved.
Current through End of 1997 Reg. Sess.
30-1-1331 Court costs and counsel fees.
(1) The court in an appraisal proceeding commenced under section 30-1-1330,
Idaho Code, shall determine all costs of the proceeding, including the
reasonable compensation and expenses of appraisers appointed by the court. The
court shall assess the costs against the corporation, except that the court may
assess costs against all or some of the dissenters, in amounts the court finds
equitable, to the extent the court finds the dissenters acted arbitrarily,
vexatiously, or not in good faith in demanding payment under section 30-1-1328,
Idaho Code.
(2) The court may also assess the fees and expenses of counsel and experts for
the respective parties, in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the court
finds the corporation did not substantially comply with the requirements of
sections 30-1-1320 through 30-1-1328, Idaho Code; or
(b) Against either the corporation or a dissenter, in favor of any other party,
if the court finds that the party against whom the fees and expenses are
assessed acted arbitrarily, vexatiously, or not in good faith with respect to
the rights provided by this part.
(3) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to these counsel reasonable fees to be paid out of the amounts awarded to
dissenters who were benefited.
[I.C., (S) 30-1-1331, as added by 1997, ch. 366 (S) 2, p. 1080.]
Official Comment
Section 1331 provides that generally the costs of the appraisal proceeding
should be assessed against the corporation. But the court is authorized to
assess these costs, in whole or in part, against the dissenters if it concludes
they acted arbitrarily, vexatiously, or not in good faith in making the section
1328 demand for additional payment. Similarly, counsel fees may be charged
against the corporation or against dissenters upon a finding of a failure to
comply in good faith with the requirements of this part. Individual dissenters,
in turn, can be called upon to pay counsel fees for other dissenters if the
court finds that the services were of substantial benefit to the other
dissenters.
The purpose of all these grants of discretion with respect to costs and
counsel fees is to increase the incentives of both sides to proceed in good
faith under this part to costs and counsel fees is to increase the incentives of
both sides to proceed in good faith under this part to attempt to resolve their
disagreement without the need of a formal judicial appraisal of the value of
shares.
New Model Act (S) 1331 is based on our prior I.C.(S) 30-1-81(i), with
the usual stylistic revisions.
I.C.(S) 30-1-1331
<PAGE>
PROXY
NAVA LEISURE USA, INC.
SOLICITED BY THE BOARD OF DIRECTORS
OF NAVA LEISURE USA, INC.
The undersigned hereby appoints Matthew Ott, Deworth Williams and each of
them with full power of substitution, to vote all shares of Common Stock, par
value $.0005 per share, of Nava Leisure USA, Inc. that the undersigned is
entitled to vote at the Special Meeting of Shareholders thereof to be held on
January 18, 1999 and at any adjournments and postponements thereof, as
follows:
Any executed proxy which does not designate a vote for any item shall be
deemed to grant authority for any item not designated and will be voted "FOR"
----
any such item.
ALL SHARES WILL BE VOTED AS DIRECTED HEREIN AND, UNLESS OTHERWISE DIRECTED,
WILL BE VOTED "FOR" ALL ITEMS AND "FOR THE ELECTION OF ALL NOMINEES TO THE
----
BOARD OF DIRECTORS. YOU MAY REVOKE THIS PROXY AT ANY TIME PRIOR TO A VOTE
THEREON.
PLEASE MARK YOUR VOTES BY PLACING AN "X" IN THE APPROPRIATE BOX IN EACH ITEM.
---
1. To consider and vote upon a proposal to acquire Senesco, Inc. ("Senesco"),
a New Jersey corporation, through the merger of Senesco with and into Nava
Leisure Acquisition Corp. ("Acquisition Corp."), a wholly-owned subsidiary
of the Company (the "Merger"). In consideration for the agreement of the
Shareholders of Senesco to enter into the Merger, the Company will issue
1,700,000 post-Reverse Split shares of the Company's authorized but
previously unissued Common Stock, on a pro rata, one share-for-one share
--- ----
basis to the shareholders of Senesco as per the terms more completely
described in the accompanying Proxy Statement, Letter of Intent dated
October 2, 1998 between the Company and Senesco (the "Letter of Intent")
and Merger Agreement and Plan of Merger dated October 9, 1998 and amended
as of November ______, 1998 among the Company, Senesco and Acquisition
Corp.
FOR ___ AGAINST ___ ABSTAIN ___
2. To consider and vote upon the proposal to effect a three-for-one reverse
stock split with respect to the Company's outstanding Common Stock;
FOR ___ AGAINST ___ ABSTAIN ___
<PAGE>
3. To consider and vote upon a proposal to amend the Articles of Incorporation
of the Company to change the name of the Company to "Senesco Technologies,
Inc." or to a similar name to be approved by the shareholders, in order to
more accurately describe the new business of the Company;
FOR ___ AGAINST ___ ABSTAIN ___
4. (a) To elect the following nominees as Directors of the Company:
Phillippe Escaravage
FOR ___ AGAINST ___ WITHHELD ___
Christopher Forbes
FOR ___ AGAINST ___ WITHHELD ___
Steven Katz
FOR ___ AGAINST ___ WITHHELD ___
(b) To increase the number of members of the Board of Directors from three
(3) members to five (5) members;
FOR ___ AGAINST ___ ABSTAIN ___
5. To consider and vote upon the proposal to amend the By-laws of the Company
to create two classes of directors; Class A to consist of four (4)
directors elected to a one-year term and Class B to consist of one (1)
director appointed to a two-year term;
FOR ___ AGAINST ___ ABSTAIN ___
6. To consider and vote upon the reincorporation of the Company in the State
of Delaware;
FOR ___ AGAINST ___ ABSTAIN ___
7. To ratify the terms of the Bridge Loan, providing up to $500,000 in
financing to support expansion of its operations in the interim period
prior to the completion of a public or private offering of securities,
such bridge financing to be evidenced by a promissory note
bearing interest at an annual rate equal to the prime rate plus 2%;
FOR ___ AGAINST ___ ABSTAIN ___
2
<PAGE>
8. Adoption of the Stock Option Plan;
FOR ___ AGAINST ___ ABSTAIN ___
9. To appoint Goldstein Golub & Kessler & Co., P.C. as auditors of the Company
for the fiscal year ending June 30, 1999;
FOR ___ AGAINST ___ ABSTAIN ___
10. To consider and vote upon any and all other business that may properly come
before the Special Meeting of Shareholders;
FOR ___ AGAINST ___ ABSTAIN ___
SIGNATURE(S) ________________________ DATE __________
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
NAVA LEISURE USA, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
3
