<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended December 31, 1996
-------------------------------------------------
/ / Transition report under Section 13 or 15(d) of the Exchange Act
Commission file number 1-9431
-----------------------
ESCAGENETICS CORPORATION
- - --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 94-3012230
- - --------------------------------------------------------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
Suite 605, 1075 Bellevue Way NE, Bellevue, WA 98004
- - --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(206) 901-3595
- - --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
824 Bransten Road, San Carlos, CA 94070
- - --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days Yes No X
--- ---
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes No X
----- -----
The number of shares outstanding of each of the issuer's classes of common
stock was 73,402,516 shares of common stock, par value $.0001 per share,
outstanding as at February 12, 1997.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
An Order Finally Approving First Amended Disclosure Statement (as
Supplemented by Disclosure Supplement) and Confirming Third Amended Plan of
Reorganization (the "Plan") with respect to ESCAgenetics Corporation (the
"Company") was entered by the United States Bankruptcy Court for the Northern
District of California (the "Court") on July 10, 1996 and supplemented by order
dated July 15, 1996. The Plan became effective on August 22, 1996.
The Plan provided for the distribution of the Company's cash assets to its
creditors. The Company retained its intellectual property and continued in
business following consummation of the Plan. Pursuant to the Plan, all
creditors of the Company, with the exception of Ultra, were paid in cash. The
Plan provided for Ultra to be paid partly in stock and partly in cash.
On August 22, 1996, also in accordance with the Plan, the Bylaws of the
Company were amended to reduce the size of the Company's Board of Directors to
two members; Michelle Kline and Kristi La-Band, who are employees of an
affiliate of Ultra, became the sole directors of the Company; and Michelle Kline
became president, vice president, secretary and treasurer of the Company. On
October 10, 1996, in accordance with the Plan, the Company amended its
Certificate of Incorporation to eliminate staggered terms for members of its
Board of Directors.
As of August 21, 1996, there were 7,342,516 shares of common stock of the
Company outstanding held by 434 holders of record. On October 10, 1996, in
accordance with the Plan, the Company amended its Certificate of Incorporation
to increase the number of authorized shares of Common Stock from 12 million to
100 million. On October 25, 1996, also in accordance with the Plan, the Company
issued to Ultra 66,060,000 shares of its Common Stock. After such issuance, the
total number of shares of the Company's Common Stock outstanding was 73,402,516.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On December 16, 1996, Ultra executed a stockholder consent for the purpose
of amending and restating the Certificate of Incorporation of the Company and
amending and restating the Bylaws of the Company, each as set forth in exhibits
attached to a notice to stockholders dated December 6, 1996. The stockholder
consent, and the amendment and restatement of the Bylaws, became effective on
January 20, 1997. A certificate setting forth the amendments to and
<PAGE>
restatement of the Certificate of Incorporation approved by the stockholder has
not yet been filed with the state of Delaware.
ITEM 5. OTHER INFORMATION.
The Company engaged Deloitte & Touche LLP on November 29, 1996 as the
Company's independent accountants to report on the Company's financial
statements commencing with the fiscal year ended March 31, 1995. The decision to
retain Deloitte & Touche LLP was approved by the Company's Board of Directors.
As reported in the Company's Form 8-K dated January 31, 1996, Ernst & Young
LLP acted as the Company's independent accountants with regard to each of the
fiscal years in the three-year period ended March 31, 1994 and resigned due to
the filing of a Chapter 11 bankruptcy petition by the Company.
On December 27, 1996, the Company contributed to the capital of its
wholly-owned subsidiary, Potato Products International, Ltd., a Delaware
corporation ("Potato Products") all of its assets, other than its common
stock of PHYTOpharmaceuticals, Inc., a California corporation, SRE
ESCAgenetics Corporation, a California corporation, and Potato Products, and
its cash and cash equivalents. Subsequent to such capital contribution, the
Company sold all of its common stock of Potato Products to an affiliate of
Ultra , at a price of $87.50 per share, for an aggregate price of $175,000,
which was paid on January 31, 1997.
On November 1, 1996, the Company changed its principal place of business to
Suite 605, 1075 Bellevue Way N.E., Bellevue, Washington 98004.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
2 Third Amended Plan of Reorganization
3.1 Certificate of Incorporation
3.2 Bylaws
(b) No reports on Form 8-K have been filed during the quarter for which
this report is filed.
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: February 13, 1997 ESCAGENETICS CORPORATION
By /s/ Michelle Kline
---------------------------------------
Michelle Kline
President and Treasurer
(Principal Executive Officer and
Principal Financial Officer)
<PAGE>
PART I - ITEM 1 - FINANCIAL STATEMENTS
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
August 22, 1996 December 31,
(fresh start date) 1996
------------------ --------------
<S> <C> <C>
Current assets:
Cash on hand $ 159,000 $ 195,000
Receivable from sale
of Potato Products International, Ltd. 175,000
Receivable from disposition of assets 158,000
True Potato Seed inventory 124,000
------------------ -------------
Total assets $ 441,000 $ 370,000
------------------ -------------
------------------ -------------
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
August 22, 1996 December 31,
(fresh start date) 1996
------------------ -------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 14,000
Due to pre-petition creditors $ 317,000 192,000
Due to GFL Ultra Fund, Ltd. 135,000
------------------ -------------
Total liabilities 317,000 341,000
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Shareholders' equity:
Common stock 7,000 7,000
Additional paid-in capital 117,000 117,000
Retained earnings (95,000)
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Total shareholders' equity 124,000 29,000
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Total liabilities and shareholders' equity $ 441,000 $ 370,000
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</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Period from
August 22, 1996
(fresh start date) For the Quarter
through ended
December 31, 1996 December 31, 1996
----------------- -----------------
<S> <C> <C>
Revenues:
Gain on sale of Potato Products International, Ltd. $ 58,000 $ 58,000
Miscellaneous 3,000 3,000
----------------- -----------------
Total revenues 61,000 61,000
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Operating expenses:
Accounting and legal 82,000 77,000
General and administrative 44,000 34,000
Consulting 30,000 23,000
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Total expenses 156,000 134,000
----------------- -----------------
Net loss $ (95,000) $ (73,000)
----------------- -----------------
----------------- -----------------
Net loss per share $ (0.00) $ (0.00)
----------------- -----------------
----------------- -----------------
Weighted average common stock outstanding 73,402,516 73,402,516
----------------- -----------------
----------------- -----------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ESCAGENETICS CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Period from
August 22, 1996
(fresh start date) For the Quarter
through ended
December 31, 1996 December 31, 1996
-------------------- --------------------
<S> <C> <C>
Cash flows used for operating activities:
Net loss $ (95,000) $ (73,000)
Adjustments to reconcile net loss to cash
flows used in operating activities:
(Increase) decrease in other current assets 107,000 (52,000)
Decrease in accounts payable and amounts due
to pre-petition creditors (111,000) (9,000)
-------------------- --------------------
Net cash used in operating activities (99,000) (134,000)
-------------------- --------------------
Cash flows provided by financing activities:
Advances from GFL Ultra Fund, Ltd. 135,000 105,000
-------------------- --------------------
Net cash provided by financing activities 135,000 105,000
-------------------- --------------------
Net increase in cash 36,000 (29,000)
Cash - beginning 159,000 224,000
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Cash - ending $ 195,000 $ 195,000
-------------------- --------------------
-------------------- --------------------
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
ESCAGENETICS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND FOR THE PERIOD
FROM AUGUST 22, 1996 (FRESH START DATE) TO DECEMBER 31, 1996
1. Unaudited information
The consolidated financial statements for the three months ended December 31,
1996 and for the period from August 22, 1996 (fresh start date) to December 31,
1996 are unaudited and reflect all adjustments which are, in the opinion of
management, necessary for a fair presentation of the financial position and
operating results for the interim periods. The consolidated financial
statements should be read in conjunction with management's discussion and
analysis or plan of operation contained herein.
The Company did not file an Annual Report to Stockholders or an Annual Report on
Form 10-K for the year ended March 31, 1996.
2. Summary of significant accounting policies
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of ESCAgenetics
Corporation and its wholly and majority owned subsidiaries, TPS Products
Company, ESCA Chile LTDA, PHYTOpharmaceuticals, Inc. and SRE ESCAgenetics
Corporation (the "Company") after elimination of all significant
intercompany accounts and transactions. On October 9, 1996, TPS Products
Company changed its name to Potato Products International, Ltd.
OPERATIONS
Formed in 1986, the Company was organized to develop and commercialize
high-value, plant derived products for the agricultural and pharmaceutical
markets. In January 1995, the Company scaled back its business activities
and became largely a dormant business. In January 1996, the Company filed a
bankruptcy petition for protection under Chapter 11 of the U.S. Bankruptcy
Code.
The Company proposed an amended plan of reorganization (the "Amended Plan
of Reorganization") that was conditionally confirmed by the Bankruptcy
Court on July 10, 1996 and became effective on August 22, 1996. Under the
Amended Plan of Reorganization, GFL Ultra Fund, Ltd. ("Ultra"), a creditor
holding approximately 59.5% of the Company's unsecured claims, received 90%
of the Company's common stock and the right to 25% of the cash available to
unsecured creditors. The remaining 10% of the Company's common stock
remained owned by its previous shareholders
<PAGE>
The Company does not plan to continue the business activities that it
previously conducted. It plans to pursue a business combination or other
strategic transaction. No candidate for such a transaction has been
identified.
FRESH START REPORTING
Paragraph 36 of AICPA Statement of Position 90-7 requires that the Company
use "fresh start" reporting in connection with its bankruptcy filing and
Ultra's acquisition of 90% of the Company's outstanding shares of common
stock. The Company's balance sheet as of August 22, 1996, the effective
date of the Plan of Reorganization, has been adjusted to reflect the
current value of the Company's assets, liabilities and shareholders' equity
as of that date. Fresh start reporting requires that purchase accounting
principles be applied. This means that the operating statements of the
"old" Company are not included in the financial statements of the "new"
Company; that the "purchase price" (current value) must be allocated to the
assets acquired and the liabilities assumed; and that retained earnings are
fixed at zero. Consequently, these consolidated financial statements are
not comparable and should not be compared to the Company's consolidated
financial statements for any period prior to August 22, 1996.
The current value was determined based on the costs Ultra incurred and the
amount of cash from the unsecured creditor pool that it gave up in order to
receive 90% of the Company's common stock. This value for 90% of the
outstanding common stock was used to compute the value of 100% of the
outstanding common stock of approximately $124,000 which was recorded as
shareholders' equity in the Company's balance sheet as of August 22, 1996.
This value was assigned to the Company's only significant remaining
tangible asset, the inventory of true potato seed.
Additionally, the "new" Company assumed the obligation to pay all proceeds
from liquidations of assets generated prior to August 22, 1996, less
administrative costs of the bankruptcy to the unsecured creditors of the
"old" Company. Cash on hand, receivable from disposition of assets, and
due to pre-petition creditors on the balance sheet at August 22, 1996 and
December 31, 1996 represent this obligation and related assets from which
it will be funded. Pre-petition creditors are divided into three
categories 1) convenience claims, 2) general unsecured claims, and 3)
Ultra. The convenience claims were unsecured claims approved by the
Bankruptcy Court in the amount of $2,000 or less and were paid in full on
September 13, 1996. General unsecured claims approved by the Bankruptcy
Court totaled approximately $548,000 and are expected to be paid before the
Company's fiscal year end on March 31, 1997 at a rate of approximately 24%.
The remaining balance due to pre-petition creditors at December 31, 1996,
reflects the amount of cash to be paid with respect to final administrative
claims, the general unsecured claims and the Ultra claim, in final
settlement of the Bankruptcy proceeding.
<PAGE>
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results and values could differ from those
estimates.
CASH ON HAND
Cash on hand at August 22, 1996 and December 31, 1996 primarily represents
cash held to pay pre-petition creditors and is held in interest bearing and
non-interest bearing demand deposit accounts at a single financial
institution.
NET LOSS PER SHARE
Net loss per share is calculated on the basis of weighted average number of
common shares outstanding. Common stock equivalents are excluded from the
computation as their effect is antidilutive.
3. Shareholders' equity
COMMON AND PREFERRED STOCK
On October 9, 1996, the Certificate of Incorporation of the Company was
amended to authorize 101,000,000 shares of Common Stock with a par value of
$.0001 per share and 1,000,000 shares of Preferred Stock with a par value
of $.01 per share. This amendment was necessary to facilitate the issuance
of 66,060,000 shares of Common Stock to Ultra as required by the Amended
Plan of Reorganization. Ultra's shares were issued on October 25, 1996,
but are reflected in the consolidated financial statements as issued on
August 22, 1996, in accordance with the Amended Plan of Reorganization.
Including Ultra's shares, there were 73,402,516 shares of Common Stock
issued and outstanding at August 22, 1996 and December 31, 1996. No shares
of Preferred Stock are outstanding.
OPTIONS AND WARRANTS
The Company had several employee and non-employee stock options plans. All
of the plans were terminated prior to the effective date of the Amended
Plan of Reorganization.
At December 31, 1996, the Company had a total of 551,500 warrants
outstanding. These warrants expire at various dates between February 1997
and July 1999 and have exercise prices ranging from $1.75 to $12.50 per
share.
<PAGE>
4. Due to Ultra
As part of the Amended Plan of Reorganization, Ultra agreed to provide the
Company with a line of credit with a minimum amount of $50,000 for
post-reorganization business activities. The loan is convertible into equity at
the rate of 130 shares per dollar at Ultra's option. Ultra has waived its right
to receive interest on the amounts advanced through December 31, 1996.
5. Sale of Potato Products International, Ltd.
On December 27, 1997, ESCAgenetics Corporation sold 100% of the common stock
outstanding of Potato Products International, Ltd. to an affiliate of Ultra for
$175,000 resulting in a gain to the Company of approximately $58,000. Prior to
the sale, ESCAgenetics Corporation transferred to Potato Products International,
Ltd. title to all of its tangible and intangible assets other than cash on hand
and the stock of PHYTOpharmaceuticals, Inc., SRE ESCAgenetics Corporation and
Potato Products International, Ltd. Cash was collected from the sale on January
31, 1997. The Company used the proceeds from the sale to repay amounts owed to
Ultra for cash advances in the amount of approximately $135,000 and will use the
balance of the cash to pay for the costs associated with pursuing a business
combination or other strategic transaction.
6. Income taxes
The Company has accumulated significant net operating loss carryforwards. Due
to the change in the ownership of the Company and the nature of the Company's
operations, the availability of the net operating loss carryforwards to offset
future income is doubtful.
<PAGE>
ESCAGENETICS CORPORATION AND SUBSIDIARIES
10-QSB
FOR THE QUARTER ENDED DECEMBER 31, 1996
Part 1 - Item 2 - Management's Discussion and Analysis or Plan of Operation
The Company
Formed in 1986, the Company was organized to develop and commercialize
high-value, plant derived products for the agricultural and pharmaceutical
markets. The Company actively conducted its business between 1987 and the early
part of 1995 and during this period of active operation, developed tissue
culture vanilla, hybrid true potato seed, oil and date palm plantlets,
high-solids tomatoes, improved cashew planting materials, corn hybrids and
synthetic taxol (an anti-cancer drug). In January 1995, the Company scaled back
its business activities and became largely a dormant business, when it laid off
substantially all of its employees and commenced active efforts to solicit
buyers for the Company's existing technologies. During 1995, the Company
disposed of most of its technology rights including the rights to its corn
hybrids and synthetic taxol programs for approximately $1,050,000. In January
1996, the Company filed a bankruptcy petition for protection under Chapter 11 of
the U.S. Bankruptcy Code. At the time of the bankruptcy filing, the Company
retained rights to certain plant extracts and related patents, its hybrid true
potato seed inventory and related technology and patents and its date palm
inventory and related technology and patents. The Company sold the plant
extracts and related patents and its date palm inventory as part of the
bankruptcy reorganization for approximately $148,000.
The Company proposed a plan of reorganization that called for an orderly
liquidation of its property, and the distribution of the proceeds thereof to
creditors pursuant to the priorities set forth in the Bankruptcy Code and other
applicable law. Any unsold assets were to be abandoned to the Company, donated
to charity, given away to third parties or destroyed and the Company was to
become dormant or dissolved with no compensation to the shareholders.
After meeting with creditors, the Company proposed an amended plan of
reorganization (the "Amended Plan of Reorganization") that was conditionally
confirmed by the Bankruptcy Court on July 10, 1996 and became effective on
August 22, 1996. Under the Amended Plan of Reorganization, GFL Ultra Fund, Ltd.
("Ultra") exchanged approximately $806,000 in convertible debentures, including
accrued interest thereon (which amount represented approximately 59.5% of the
Company's unsecured claims), for 25% of the cash available to unsecured
creditors and 90% of the Company's common stock. The remaining 10% of the
Company's common stock remained owned by its previous shareholders. The Company
has only one class of equity securities outstanding. The Plan of Reorganization
required all directors and officers of the Company to resign and to be replaced
by persons designated by Ultra.
<PAGE>
Future plans
The Company does not plan to continue the business activities that it previously
conducted. It plans to pursue a business combination or other strategic
transaction. No candidate for such a transaction has been identified. The
Company believes its status as a public company may be attractive to a private
company wishing to avoid an initial public offering but there is no guarantee
that a business combination or other strategic transaction will be consummated.
The Company is currently delinquent in its filings with the Securities and
Exchange Commission and is taking steps to correct the delinquency. If the
delinquency cannot be corrected due to excessive cost or for other reasons, the
Company may not be a viable party for a business combination or other
transaction.
Fresh start reporting
Paragraph 36 of AICPA Statement of Position 90-7 requires that the Company use
"fresh start" reporting in connection with its bankruptcy filing and Ultra's
acquisition of 90% of the Company's outstanding shares of common stock. The
Company's balance sheet as of August 22, 1996, the effective date of the Plan
of Reorganization, has been adjusted to reflect the current value of the Company
as of that date. Fresh start reporting requires that purchase accounting
principles be applied. This means that the operating statements of the "old"
Company are not be included in the financial statements of the "new" Company;
that the "purchase price" (current value) must be allocated to the assets
acquired and the liabilities assumed; and that retained earnings are fixed at
zero.
The purchase price was determined based on the costs Ultra incurred and the
amount of cash from the unsecured creditor pool that it gave up in order to
receive 90% of the Company's common stock. This value for 90% of the
outstanding common stock was used to compute the value of 100% of the
outstanding common stock which was recorded as shareholders' equity in the
Company's balance sheet as of August 22, 1996. This value was assigned to the
Company's only significant remaining tangible asset, the inventory of true
potato seed. The Company's Bankruptcy Disclosure Statement placed a value of
$150,000 on the inventory of true potato seed and the related technology and
patents but the Company was unable to find a buyer for the inventory of true
potato seed or the related technology and patents during the Bankruptcy
proceeding at that or any other value.
Additionally, the "new" Company assumed the obligation to pay all liquidation
proceeds generated prior to August 22, 1996, less administrative costs of the
bankruptcy to the unsecured creditors of the "old" Company. Pre-petition
creditors are divided into three categories 1) convenience claims, 2) general
unsecured claims, and 3) Ultra. The Company had no secured creditors. The
convenience claims were unsecured claims approved by the Bankruptcy Court in the
amount of $2,000 or less and were paid in full on September 13, 1996. General
unsecured claims approved by the Bankruptcy Court
<PAGE>
totaled approximately $548,000 and are expected to be paid before the Company's
fiscal year end on March 31, 1997 at a rate of approximately 24%.
Sale of Potato Products International, Ltd.
On December 27, 1997, ESCAgenetics Corporation sold 100% of the common stock
outstanding of its wholly owned subsidiary, Potato Products International, Ltd.
(formerly known as TPS Products Company) to an affiliate of Ultra for $175,000
resulting in a gain to the Company of approximately $58,000. Prior to the sale,
ESCAgenetics Corporation transferred to Potato Products International, Ltd.
title to all of its tangible and intangible assets other than cash on hand and
the stock of PHYTOpharmaceuticals, Inc. (an inactive majority owned subsidiary),
SRE ESCAgenetics Corporation (an inactive wholly owned subsidiary) and Potato
Products International, Ltd. The Company used the proceeds from the sale to
repay amounts owed to Ultra for cash advances in the amount of approximately
$135,000 and will use the balance of the cash to pay for the costs associated
pursuing a business combination or other strategic transaction.
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
2 Third Amended Plan of Reorganization
3.1 Certificate of Incorporation
3.2 Bylaws
<PAGE>
GIBSON, DUNN & CRUTCHER LLP
JONATHAN M. LANDERS, SBN 103501
DESMOND CUSSEN, SBN 154936
One Montgomery Street
Telesis Tower
San Francisco, California 94104-4505
(415) 393-8200
Attorneys for Debtors
ESCAGENETICS CORPORATION
PHYTOPHARMACEUTICALS, INC.
TPS PRODUCTS CO.
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re CASE NOS. 96-3-0312 DM,
96-3-0311 DM, AND 96-3-0313 DM
ESCAGENETICS CORPORATION,
a Delaware Corporation, JOINTLY ADMINISTERED AS CASE NO.
96-3-0312 DM
PHYTOPHARMACEUTICALS, INC.,
a California Corporation CHAPTER 11
TPS PRODUCTS CO.,
a Delaware Corporation
Debtors.
THIRD AMENDED PLAN OF REORGANIZATION
DATED AS OF JUNE 6, 1996
------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS; VARIOUS DATES
Section 1.1. "Administrative Claims" . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. "Allowed Claim" . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. "Bankruptcy Cases". . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.4. "Bankruptcy Code" . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5. "Bankruptcy Court". . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6. "Bankruptcy Rules". . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7. "Business Day". . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8. "Cash Assets" . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.9. "Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.10. "Class" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.11. "Confirmation". . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.12. "Confirmation Date" . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.13. "Confirmation Order". . . . . . . . . . . . . . . . . . . . . . 3
Section 1.14. "Creditor". . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.15. "Debtors" . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.16. "Disbursing Agent". . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.17. "Disputed Claim". . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.18. "Distribution Account". . . . . . . . . . . . . . . . . . . . . 3
Section 1.19. "Effective Date". . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.20. "ESCAChile" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.21. "Escrow Account". . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.22. "Escrow Agreement". . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.23. "Estates" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.24. "Executory Contract". . . . . . . . . . . . . . . . . . . . . . 4
Section 1.25. "Filed" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.26. "Filing Date" . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.27. "Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.28. "Gulf Palms Contract" . . . . . . . . . . . . . . . . . . . . . 4
Section 1.29. "Gulf Palms Litigation" . . . . . . . . . . . . . . . . . . . . 5
Section 1.30. "Interest". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.31. "Landlord". . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.32. "Person". . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.33. "Plan". . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.34. "Priority Claims" . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.35. "Pro Rata Share". . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.36. "Recovery Rights" . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.37. "San Carlos Master Lease" . . . . . . . . . . . . . . . . . . . 6
Section 1.38. "San Jose Greenhouse" . . . . . . . . . . . . . . . . . . . . . 6
Section 1.39. "SAPAD" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.40. "Secured Claim" . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1.41. "San Carlos Subleases". . . . . . . . . . . . . . . . . . . . . 7
Section 1.42. "Tax Claim" . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.43. "Ultra Fund". . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.44. "Unsecured Claim" . . . . . . . . . . . . . . . . . . . . . . . 8
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ARTICLE 2
CLASSIFICATION OF CLAIMS AND INTERESTS
Section 2.1. Classification. . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 2.2. Classes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3
TREATMENT OF ADMINISTRATIVE AND TAX CLAIMS
Section 3.1. Administrative Claims . . . . . . . . . . . . . . . . . . . . . 9
Section 3.2. Tax Claims. . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE 4
TREATMENT OF CLASSES UNDER THE PLAN
Section 4.1. Satisfaction Of Claims. . . . . . . . . . . . . . . . . . . . .10
Section 4.2. Class 1: Priority Claims . . . . . . . . . . . . . . . . . . .10
Section 4.3. Class 2: Secured Claims. . . . . . . . . . . . . . . . . . . .10
Section 4.4. Class 3: Convenience Class Claims. . . . . . . . . . . . . . .10
Section 4.5. Class 4: General Unsecured Claims. . . . . . . . . . . . . . .10
Section 4.6. Class 5: Ultra Fund. . . . . . . . . . . . . . . . . . . . . .11
Section 4.7. Class 6: Interests . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE 5
IMPAIRMENT OR UNIMPAIRMENT OF CLASSES; VOTING
Section 5.1. Unclassified Claims . . . . . . . . . . . . . . . . . . . . . .11
Section 5.2. Classes Not Impaired Under The Plan . . . . . . . . . . . . . .11
Section 5.3. Classes Impaired Under The Plan . . . . . . . . . . . . . . . .11
ARTICLE 6
CRAMDOWN OF NONACCEPTING CLASS
Section 6.1. Cramdown. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE 7
MEANS FOR IMPLEMENTATION OF THE PLAN
Section 7.1. Substantive Consolidation . . . . . . . . . . . . . . . . . . .11
Section 7.2. Disbursing Agent and Distribution Account . . . . . . . . . . .12
Section 7.3. Distribution of Proceeds. . . . . . . . . . . . . . . . . . . .12
Section 7.4. Liquidation of Certain Assets . . . . . . . . . . . . . . . . .13
Section 7.5. Disbursing Agent. . . . . . . . . . . . . . . . . . . . . . . .14
Section 7.6. Status of Debtors after Effective Date. . . . . . . . . . . . .14
Section 7.7. San Carlos Master Lease and San Carlos Subleases. . . . . . . .14
Section 7.8. Gulf Palms and CloneTech. . . . . . . . . . . . . . . . . . . .14
Section 7.9. Recovery Rights . . . . . . . . . . . . . . . . . . . . . . . .15
Section 7.10. Direction To Parties. . . . . . . . . . . . . . . . . . . . . .15
Section 7.11. Provisions For Objections To And Treatment Of Disputed Claims .15
Section 7.12. Estimation Of Disputed Claims And Disputed Interests. . . . . .15
Section 7.13. Manner Of Payments Under The Plan . . . . . . . . . . . . . . .15
Section 7.14. Unclaimed Distributions . . . . . . . . . . . . . . . . . . . .15
Section 7.15. No De Minimis Distributions . . . . . . . . . . . . . . . . . .16
Section 7.16. Tax Reporting and Withholding . . . . . . . . . . . . . . . . .16
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Section 7.17. Stock Authorization and Issuance. . . . . . . . . . . . . . . .16
Section 7.18. New Directors and Officers. . . . . . . . . . . . . . . . . . .16
Section 7.19. Post-Confirmation Loan. . . . . . . . . . . . . . . . . . . . .16
ARTICLE 8
EXECUTORY CONTRACTS
Section 8.1. Rejection Of Executory Contracts. . . . . . . . . . . . . . . .17
Section 8.2. Claims For Damages. . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE 9
RETENTION OF JURISDICTION
Section 9.1. Jurisdiction Of Bankruptcy Court. . . . . . . . . . . . . . . .17
ARTICLE 10
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS
Section 10.1. Conditions To Confirmation. . . . . . . . . . . . . . . . . . .18
Section 10.2. Conditions To Effectiveness . . . . . . . . . . . . . . . . . .19
ARTICLE 11
TITLE TO PROPERTY AND DISCHARGE
Section 11.2. Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE 12
MISCELLANEOUS PROVISIONS
Section 12.1. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 12.2. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 12.3. Right to Withdraw . . . . . . . . . . . . . . . . . . . . . . .19
Section 12.4. Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.5. Construction. . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.6. Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.7. No Interest . . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.8. No Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . .20
Section 12.9. Amounts Of Claims . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.10. No Waiver Of Discharge. . . . . . . . . . . . . . . . . . . . .20
Section 12.11. Integration . . . . . . . . . . . . . . . . . . . . . . . . . .21
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THIRD AMENDED PLAN OF REORGANIZATION
DATED AS OF JUNE 6, 1996
ESCAgenetics Corporation, a Delaware corporation ("ESCA"),
PHYTOpharmaceuticals, Inc., a California corporation and a majority-owned
subsidiary of ESCA ("PPI"), and TPS Products Co., a Delaware corporation and a
wholly-owned subsidiary of ESCA ("TPS"), the Debtors in the above-captioned
Chapter 11 cases, hereby propose the following Third Amended Plan of
Reorganization pursuant to the provisions of Chapter 11 of Title 11 of the
United States Code.
SUMMARY OF PLAN
In brief, the Plan provides for the substantive consolidation of the
Debtors' estates and the distribution of the Cash Assets to Creditors. With the
exception of PPI's inventory of plant extracts which may be sold by the Debtors
prior to the Effective Date, intellectual property will be retained by the
Debtors. GFL Ultra Fund Ltd. ("Ultra Fund") will be paid partly in stock and
partly in cash. All other creditors will be paid in cash. ESCA and PPI
qualify, and have elected to be treated, as small businesses under Bankruptcy
Code section 101(51C), and intend to comply with the provisions of the
Bankruptcy Code governing small businesses. The Debtors believe that TPS also
qualifies as a small business but the Bankruptcy Court has reserved this issue
owing to the existence of an intercompany obligation from TPS to ESCA in the
approximate amount of $5,700,000. The Debtors will continue in business
following the consummation of the Plan. They will continue to develop and
maximize the value of their intellectual property and will seek a merger
partner.
ARTICLE 1
DEFINITIONS; VARIOUS DATES
Unless otherwise provided herein, all terms used herein shall have the
meanings assigned to such terms in Title 11 of the United States Code. For the
purposes of the Plan, the following terms (which appear herein as capitalized
terms) shall have the meanings set forth below.
Section 1.1."ADMINISTRATIVE CLAIMS" means all fees of the U.S. Trustee and
all costs and expenses of administration of the Bankruptcy Cases with priority
under Section 507(a)(1) of the Bankruptcy Code including, without limitation,
costs and expenses allowed under Section 503(b) of the Bankruptcy Code, the
actual and necessary costs and expenses of preserving the estates of the Debtors
and operating the businesses of the Debtors, any indebtedness or obligations
incurred or assumed by the Debtors and any fees or charges assessed against the
estates of the Debtors under 28 U.S.C. Section 1930.
Section 1.2."ALLOWED CLAIM" means a Claim against any of the Debtors to the
extent that:
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(a) the Claim is deemed filed pursuant to Section 1111(a) of the
Bankruptcy Code and no proof of Claim has been timely filed; or
(b) a proof of Claim has been timely filed or is deemed filed
pursuant to Bankruptcy Code Section 1111(a) and either:
(i) the Claim is not a Disputed Claim; or
(ii) the Claim has been allowed by a Final Order (only to the
extent so allowed); or
(c) the Claim is a Tax Claim and the amount of such Claim has been
agreed to by the Debtors or allowed by a Final Order of the Bankruptcy Court; or
(d) the Claim is an Administrative Claim for compensation pursuant to
Sections 330 and 331 of the Bankruptcy Code that has been allowed by the
Bankruptcy Court; or
(e) the Claim is a Claim that is allowed by the terms of the Plan.
Section 1.3. "BANKRUPTCY CASES" means the above-captioned Chapter 11
cases of the Debtors.
Section 1.4. "BANKRUPTCY CODE" means Title 11 of the United States Code,
11 U.S.C. Section 101 ET SEQ., as applicable to the Bankruptcy Cases, together
with all amendments, modifications and replacements as the same exist upon any
relevant date.
Section 1.5. "BANKRUPTCY COURT" means the United States District Court
for the Northern District of California with jurisdiction over the Bankruptcy
Cases and, to the extent of any reference made pursuant to 28 U.S.C. Section
157, the United States Bankruptcy Court for the Northern District of California
or any court having competent jurisdiction to enter the Confirmation Order.
Section 1.6. "BANKRUPTCY RULES" means the Rules of Bankruptcy Procedure,
as amended, and the local rules of the Bankruptcy Court, as applicable to the
Bankruptcy Cases.
Section 1.7. "BUSINESS DAY" means a day other than a Saturday, Sunday or
other day on which commercial banks in San Francisco, California are authorized
or required by law to close.
Section 1.8. "CASH ASSETS" means cash and cash equivalents such as
certificates of deposit, time deposits, savings accounts and similar items.
Section 1.9. "CLAIM" means, with reference to any of the Debtors, (a) a
right to payment (including, without limitation, a guaranty), whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed or
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured; or
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(b) a right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
Section 1.10. "CLASS" means any group of holders of Claims or Interests as
specified in Article 2.
Section 1.11. "CONFIRMATION" means the entry by the Bankruptcy Court of an
order confirming the Plan.
Section 1.12. "CONFIRMATION DATE" means the date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the docket.
Section 1.13. "CONFIRMATION ORDER" means the order of the Bankruptcy Court
confirming the Plan.
Section 1.14. "CREDITOR" means any Person that holds a Claim against any
Debtor that arose or is deemed to have arisen on or before the Filing Date
including, without limitation, Claims of the kind specified in Sections 502(g),
502(h), or 502(i) of the Bankruptcy Code.
Section 1.15. "DEBTORS" means, and is a collective reference to, ESCA, PPI
and TPS.
Section 1.16. "DISBURSING AGENT" means the person appointed by the
President of ESCA, after the Effective Date, to carry out the duties of the
Disbursing Agent as set forth in the Plan.
Section 1.17. "DISPUTED CLAIM" means (a) a Claim that is scheduled as
disputed, contingent or unliquidated in the Debtors' schedules and no proof of
Claim has been timely filed with respect to such Claim, or (b) a Claim with
respect to which any Debtor has filed a timely objection, which has not been
withdrawn on or before any date fixed for filing such objections by the Plan or
by order of the Bankruptcy Court, and has not been denied by a Final Order.
Section 1.18. "DISTRIBUTION ACCOUNT" means the separate, interest-bearing
account to be established at a bank selected by the Disbursing Agent and into
which, among other things, all Cash Assets and all proceeds of the liquidation
of the Debtors' assets shall be deposited on the Effective Date, all as provided
in this Plan.
Section 1.19. "EFFECTIVE DATE" means the first Business Day which is at
least 10 days after the date of entry of the Confirmation Order and on which no
stay of the Confirmation Order is in effect.
Section 1.20. "ESCACHILE" means that certain Chilean corporation which is
located in Osorna, Chile, is wholly-owned by TPS and is engaged in the potato
seed production business.
Section 1.21. "ESCROW ACCOUNT" means the interest-bearing segregated
account which was established by Landlord pursuant to the
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terms of the Escrow Agreement. As of the Filing Date, the Escrow Account
contained the approximate sum of $50,000. All matters relating to the Escrow
Account have been settled pursuant to an agreement which has been entered into
by and between the Landlord and the Debtors. That agreement is dated March 11,
1996, and was approved by order of the Bankruptcy Court dated on or about
March 15, 1996.
Section 1.22. "ESCROW AGREEMENT" means the letter agreement dated June 15,
1995, by and between the Landlord and ESCA, which provides that ESCA shall pay
the following sums to Landlord who, in turn, shall deposit them into the Escrow
Account: (i) a lump sum of $25,000; (ii) $9,571.80, representing a percentage of
the proceeds generated by certain subleases over a limited period of time, and
(iii) $5,000 per month commencing on November 15, 1995. The Escrow Agreement
provides that the monies in the Escrow Account are to be made available to ESCA
in order to restore the premises which it leases pursuant to the San Carlos
Master Lease in accordance with the terms of said lease. All matters relating
to the Escrow Agreement have been settled pursuant to an agreement which has
been entered into by and between the Landlord and the Debtors. That agreement
is dated March 11, 1996, and was approved by order of the Bankruptcy Court dated
on or about March 15, 1996.
Section 1.23. "ESTATES" means the estates for the Debtors created pursuant
to Section 541 of the Bankruptcy Code upon the commencement of the Bankruptcy
Cases, and "Estate" means any single one of such Estates.
Section 1.24. "EXECUTORY CONTRACT" means any executory contract or
unexpired lease, subject to Section 365 of the Bankruptcy Code, between any
Debtor and any other Person or Persons in effect as of the Filing Date.
Section 1.25. "FILED" means filed with the Bankruptcy Court in the
Bankruptcy Cases and served upon: (i) the Office of the U.S. Trustee, 250
Montgomery Street, Suite 1000, San Francisco, CA 94104; (ii) Jonathan M.
Landers, Esq., Gibson, Dunn & Crutcher, One Montgomery Street, 31st Floor,
Telesis Tower, San Francisco, CA 94104; and (iii) such other entity and its
counsel of record, as may be subject to or a party to the matters raised by the
pleading or document that is filed.
Section 1.26. "FILING DATE" means January 26, 1996.
Section 1.27. "FINAL ORDER" means an order or judgment of the Bankruptcy
Court with respect to which no stay is in effect.
Section 1.28. "GULF PALMS CONTRACT" means that certain contract between
Gulf Palms Agricultural Co., a Kuwaiti corporation, and ESCA, dated on or about
March of 1994, pursuant to which ESCA was to develop date palm plants from
tissue cultures and deliver 40,000 date palm plants to Gulf Palms over a two-
year period in exchange for the payment of $680,000. Gulf Palms posted a
$680,000 letter of credit (the "Gulf Palms Letter of Credit") to assure payment
for all plants produced by ESCA. ESCA received a payment of
4
<PAGE>
approximately $204,000 for costs associated with developing the processes and
procedures to clone the date palm plant in large quantities. All matters
relating to the Gulf Palms Contract have been settled. An agreement between
Gulf Palms, CloneTech and ESCA documenting this settlement will shortly be filed
with the Bankruptcy Court and noticed to Creditors.
Section 1.29. "GULF PALMS LITIGATION" means that certain lawsuit commenced
by Gulf Palms Agricultural Co. against ESCA on July 11, 1995. Said lawsuit is
pending in the Superior Court for the County of San Mateo. In brief, Gulf Palms
has asserted various causes of action (including breach of contract) against
ESCA based on ESCA's alleged failure to perform its obligations under the Gulf
Palms Contract. In connection with said litigation, the Superior Court entered
an order on December 27, 1995, granting Gulf Palm's motion for a writ of
possession with respect to all date palm materials for various date palm
varieties which were produced or developed pursuant to ESCA's contract with Gulf
Palms. Gulf Palms took possession of the foregoing date palm materials in
January of 1996. All matters relating to the Gulf Palms Litigation have been
settled. An agreement between Gulf Palms, CloneTech and ESCA documenting this
settlement will shortly be filed with the Bankruptcy Court and noticed to
Creditors.
Section 1.30. "INTEREST" means the legal, equitable and contractual rights
resulting from or appurtenant to being a holder of an equity interest in any of
the Debtors.
Section 1.31. "LANDLORD" means Tanklage Construction Co., Inc. and
Tanklage Properties, Inc.
Section 1.32. "PERSON" means any individual, corporation, general
partnership, limited partnership, association, joint stock company, joint
venture, estate, trust, unincorporated organization, government or any political
subdivision thereof or other entity.
Section 1.33. "PLAN" means this Third Amended Plan of Reorganization, as
altered, modified or amended by the Debtors in accordance with the Bankruptcy
Code, the Bankruptcy Rules, and this Plan.
Section 1.34. "PRIORITY CLAIMS" means all Claims that are entitled to
priority pursuant to Section 507(a) of the Bankruptcy Code and that are not
Administrative Claims or Tax Claims.
Section 1.35. "PRO RATA SHARE" means as to any distribution to be made
under this Plan in respect of any Class of Claims, the allocation of the
aggregate amount of such distribution in accordance with that percentage of the
total of Allowed Claims in such Class that is represented by the Allowed Claim
receiving the distribution.
Section 1.36. "RECOVERY RIGHTS" means all claims, torts, demands, actions
or causes of action of any kind or nature whatsoever, whether known or unknown,
that the Debtors, debtors in possession, or the Debtors' estates may have,
except to the extent
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that such rights, claims, and causes of action are expressly released in this
Plan. The Debtors do not believe that there are any Recovery Rights.
Section 1.37. "SAN CARLOS MASTER LEASE" means collectively the following
two leases:
(a) That certain lease dated May 15, 1981, by and between ESCA (as
lessee and successor-in-interest to International Plant Research Institute) and
Landlord, as amended by (i) that certain Addendum to Lease dated May 15, 1981,
(ii) that certain Addendum to Lease dated May 16, 1981, and (iii) that certain
Addendum to Lease dated October 15, 1981, and pursuant to which ESCA leases from
Landlord certain premises located at 814-838 Bransten Road, San Carlos,
California. The monthly rent currently coming due pursuant to the foregoing
lease totals $15,578.50 and the term of the lease extends until February 14,
1999. The security deposit paid by ESCA to the Landlord under the foregoing
lease and the lease described in subparagraph (b) below totals $1,932.
(b) That certain lease dated January 4, 1979, by and between ESCA (as
lessee and successor-in-interest to International Plant Research Institute) and
Landlord, as amended by (i) that certain Addendum to Lease dated January 9,
1980, (ii) that certain Addendum to Lease dated March 4, 1980, (iii) that
certain Addendum to Lease dated July 3, 1980, (iv) that certain Addendum to
Lease dated September 4, 1980, (v) that certain Addendum to Lease dated
September 18, 1980, (vi) that certain Addendum to Lease dated March 18, 1981,
(vii) that certain Addendum to Lease dated May 15, 1981, (viii) that certain
Addendum to Lease dated October 15, 1981, and (ix) that certain Addendum to
Lease dated May 28, 1982, and pursuant to which ESCA leases from Landlord
certain premises located at 853, 871 and 887 Industrial Road, San Carlos,
California. The monthly rent currently coming due pursuant to the foregoing
lease totals $21,253.39 and the term of the lease extends until February 14,
1999. The security deposit paid by ESCA to the Landlord under the foregoing
lease and the lease described in subparagraph (a) above totals $1,932.
All matters relating to the San Carlos Master Lease have been settled
pursuant to an agreement which has been entered into by and between the Landlord
and the Debtors. That agreement is dated March 11, 1996, and was approved by
order of the Bankruptcy Court dated on or about March 15, 1996.
Section 1.38. "SAN JOSE GREENHOUSE" means that certain greenhouse and
related improvements located at 2050 Fortune Drive, San Jose, California, which
is owned by ESCA. The land underlying the San Jose Greenhouse is owned by
Jacinto S. Siquig and Erlinda Siquig (the "Siquigs") and is leased by ESCA
pursuant to that certain lease dated August 15, 1988, as amended by letter
agreement of August 22, 1988, executed by and between the Siquigs and Sungene
Technologies (predecessor-in-interest to ESCA). The monthly rent coming due
under the lease is $1,600 and the lease expires on July 29, 1997. All matters
relating to the San Jose Greenhouse have been settled pursuant to an agreement
which has been entered into by
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and between the Siquigs and the Debtors. That agreement is dated May 30, 1996,
and is scheduled for hearing before the Bankruptcy Court on June 19, 1996.
Section 1.39. "SAPAD" means the Saudi American Plant Development Limited
Company, a joint venture in Saudi Arabia which ESCA entered into with the I.M.
Boumarah Company, a Saudi Arabian company. Pursuant to the joint venture
agreement, among other things, (a) ESCA agreed to provide the technical know-how
for the production of date palm trees from tissue cultures to I.M. Boumarah, (b)
I.M. Boumarah agreed to sell the date palm trees, and (c) ESCA was to receive
27% of the proceeds from the sales of the trees. ESCA owns 324 shares (a 27%
interest) in SAPAD.
Section 1.40. "SECURED CLAIM" means (a) a Claim secured by a lien on any
of the Debtors' assets, which lien is valid, perfected and enforceable and is
not subject to avoidance under the Bankruptcy Code or other applicable
nonbankruptcy law, but only to the extent that such Claim does not exceed the
value of the assets securing such Claim or (b) a Claim allowed under the Plan as
a Secured Claim.
Section 1.41. "SAN CARLOS SUBLEASES" means collectively the following
subleases of the Bransten Road and Industrial Road premises, which premises are
leased by ESCA pursuant to the San Carlos Master Lease (each of the San Carlos
Subleases was consented to by Landlord):
(a) That certain sublease dated January 19, 1995, by and between
ESCA, as sublessor, and Argonaut Technologies, as sublessee, as amended by that
certain First Amendment to Sublease dated October 9, 1995, pursuant to which
Argonaut subleases from ESCA the premises located at 887D, 887E, 887F and 887G
Industrial Road and 853A, 853I and 853J Industrial Road, San Carlos, California.
The monthly rent currently coming due pursuant to the Argonaut sublease totals
$21,995 and the term of the sublease extends until January 18, 1998 (subject to
a six-month renewal option in favor of Argonaut). The security deposit paid by
Argonaut to ESCA under the Argonaut sublease totals $17,592.50.
(b) That certain sublease dated October 31, 1995, by and between
ESCA, as sublessor, and Servicor, Inc., as sublessee, pursuant to which Servicor
subleases from ESCA a portion of the premises located at 830 Bransten Road, San
Carlos. The monthly rent currently coming due pursuant to the Servicor sublease
totals $10,400 and the term of the sublease extends until February 14, 1999.
The security deposit paid by Servicor to ESCA under the Servicor sublease totals
$10,400.
(c) That certain sublease dated December 6, 1995, by and between
ESCA, as sublessor, and Cellegy Pharmaceuticals Inc., as sublessee, pursuant to
which Cellegy Pharmaceuticals subleases from ESCA the premises located at 871J,
871K and 871L Industrial Road, San Carlos, California. The monthly rent
currently coming due pursuant to the Cellegy Pharmaceuticals sublease totals
$8,992 and the term of the sublease extends until May 31, 1997 (subject to a
three six-month renewal options in favor of Cellegy
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Pharmaceuticals). The security deposit paid by Cellegy Pharmaceuticals to ESCA
under the Cellegy Pharmaceuticals sublease totals $8,992.
All matters relating to the San Carlos Subleases have been settled pursuant
to an agreement which has been entered into by and between the Landlord and the
Debtors. That agreement is dated March 11, 1996, and was approved by order of
the Bankruptcy Court dated on or about March 15, 1996.
Section 1.42. "TAX CLAIM" means a Claim of the kind specified in
Section 507(a)(8) of the Bankruptcy Code.
Section 1.43. "ULTRA FUND" means GFL Ultra Fund Ltd., the holder of a
Claim in the amount of $805,727, based on 6% Convertible Debentures in the face
amount of $750,000, issued by ESCA on October 21, 1994.
Section 1.44. "UNSECURED CLAIM" means a Claim which is neither a Secured
Claim as specified herein nor entitled to priority under the Bankruptcy Code or
the orders of the Bankruptcy Court, including without limitation (i) Claims
arising from the rejection of any Executory Contracts pursuant to Section 365 of
the Bankruptcy Code; (ii) Claims of any governmental unit not entitled to
priority pursuant to Section 507(a)(8) of the Bankruptcy Code; (iii) any Claim
incurred in the ordinary course of business of any of the Debtors prior to the
Filing Date; and (iv) disputed, contingent and/or unliquidated Claims that would
be Unsecured Claims if undisputed, absolute and/or liquidated.
ARTICLE 2
CLASSIFICATION OF CLAIMS AND INTERESTS
Section 2.1. CLASSIFICATION.
(a) Section 2.2 sets forth a designation of Classes of Claims and
Interests. A Claim or Interest is classified in a particular Class only to the
extent that the Claim or Interest qualifies within the description of the Class
and is classified in a different Class to the extent the Claim or Interest
qualifies within the description of that different Class.
(b) In accordance with Section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims and Tax Claims of the kind specified in Sections 507(a)(l)
and 507(a)(8), respectively, have not been classified and are excluded from the
following Classes. There are no Claims under Section 507(a)(2).
Section 2.2. CLASSES. For the purposes of the Plan, those Persons
holding Claims against, or Interests in, the Debtors are grouped as follows in
accordance with Section 1122(a) of the Bankruptcy Code:
(a) CLASS 1: PRIORITY CLAIMS. This Class consists of all Claims
that are not Claims of the type referred to in
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Section 2.1(b) hereof and are entitled to priority pursuant to Section 507(a) of
the Bankruptcy Code.
(b) CLASS 2: SECURED CLAIMS. This Class consists of all Secured
Claims against any of the Debtors.
(c) CLASS 3: CONVENIENCE CLASS. This Class consists of all
Unsecured Claims (i) of $2,000 or less, or (ii) as to which the holder timely
elects, on the ballot for voting on the Plan, to reduce such Unsecured Claim to
$2,000.
(d) CLASS 4: GENERAL UNSECURED CLAIMS. This Class consists of all
general Unsecured Claims not included in Class 3 or Class 5.
(e) CLASS 5: ULTRA FUND. This Class consists of the Claim held by
Ultra Fund.
(f) CLASS 6: INTERESTS. This Class consists of all Interests in any
of the Debtors. Because the holders of the Interests hold Interests in
different Debtors, Class 6 is divided into three subclasses:
Class 6(a): the holders of Interests in ESCA;
Class 6(b): the holders of Interests in PPI; and
Class 6(c): the holders of Interests in TPS
ARTICLE 3
TREATMENT OF ADMINISTRATIVE AND TAX CLAIMS
Section 3.1. ADMINISTRATIVE CLAIMS.
(a) TREATMENT. Each holder of an Allowed Administrative Claim shall
receive, in full satisfaction of such Claim, cash equal to the amount of such
Claim on the later of (i) ten (10) Business Days after the Effective Date and
(ii) the date that is ten Business Days after such Claim becomes an Allowed
Claim, unless such holder shall have agreed to different treatment of such
Claim; provided, however, that Administrative Claims representing obligations
incurred in the ordinary course of business shall be paid or performed by the
Debtors in accordance with the terms and conditions of each agreement relating
thereto. All professional fees alleged to be entitled to Administrative Claim
status are subject to Bankruptcy Court approval and will be paid only after
entry of an appropriate order.
(b) BAR DATE FOR ADMINISTRATIVE CLAIMS. All applications for final
compensation of professional persons for services rendered and for reimbursement
of expenses incurred on or before the Effective Date (including, without
limitation, any compensation requested by any professional or other entity for
making a substantial contribution to the Bankruptcy Cases) and all other
requests for payment of Administrative Claims incurred before the
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Effective Date under Sections 507(a)(1) or 503(b) of the Code (except only for
Claims for trade debt incurred in the ordinary course of business on or after
the Filing Date and Claims under 28 U.S.C. Section 1930) shall be Filed no later
than thirty (30) days after the Confirmation Date. Any such Claim not Filed by
this deadline shall be forever barred and any Creditor who is required to File a
request for payment of such Claim and who does not File such request by the
applicable bar date shall be forever barred from asserting such Claim against
any Debtor, its Estate, or the Distribution Account.
Section 3.2. TAX CLAIMS. Each Allowed Tax Claim of the kind specified in
Section 507(a)(8) of the Bankruptcy Code shall be paid in cash on the later of
(i) ten Business Days after the Effective Date and (ii) the date that is ten
Business Days after such Claim becomes an Allowed Claim. Holders of Tax Claims
shall not receive any payment on account of postpetition interest on, or
penalties (whether postpetition or prepetition) with respect to, or arising in
connection with, such Tax Claims, except as allowed by Final Order. The Plan,
the Confirmation Order and Section 1141(d) of the Bankruptcy Code provide for
the discharge of any such Claims for postpetition interest and/or penalties
(whether postpetition or prepetition).
ARTICLE 4
TREATMENT OF CLASSES UNDER THE PLAN
Section 4.1. SATISFACTION OF CLAIMS. The treatment of and consideration
to be received by holders of Allowed Claims pursuant to this Article 4 shall be
in full satisfaction, release and discharge of their respective Claims against
the Debtors. Holders of Interests in the Debtors shall retain their Interests.
Section 4.2. CLASS 1: PRIORITY CLAIMS. Class 1 Claims that are Allowed
Claims shall be paid in cash in full on the later of ten (10) Business Days
after the Effective Date, or the date that is ten (10) Business Days after such
Claim becomes an Allowed Claim, unless the holder of such a Claim agrees to
different treatment.
Section 4.3. CLASS 2: SECURED CLAIMS. Class 2 Claims that are Allowed
Claims shall be paid in cash in full on the later of ten (10) Business Days
after the Effective Date, or the date that is ten (10) Business Days after such
Claim becomes an Allowed Claim, unless the holder of such a Claim agrees to
different treatment.
Section 4.4. CLASS 3: CONVENIENCE CLASS CLAIMS. Class 3 Claims that are
Allowed Claims shall be paid in cash in full on the later of ten (10) Business
Days after the Effective Date, or on the date that is ten (10) Business Days
after such Claim becomes an Allowed Claim, unless the holder of such a Claim
agrees to different treatment.
Section 4.5. CLASS 4: GENERAL UNSECURED CLAIMS. Each holder of a
Class 4 Claim that is an Allowed Claim shall be paid its Pro Rata Share of 75%
of the Cash Assets remaining in the Distribution
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Account after the payment of Administrative Claims, Tax Claims and Class 1, 2
and 3 Claims.
Section 4.6. CLASS 5: ULTRA FUND. The holder of the Class 5 Claim shall
receive:
(a) 25% of the Cash Assets remaining in the Distribution Account
after payment of Administrative Claims, Tax Claims, and Class 1, 2 and 3 Claims;
and
(b) 66,060,000 shares of common stock of ESCA.
Section 4.7. CLASS 6: INTERESTS. Each Interest holder shall retain its
Interest but shall receive no property or other consideration under the Plan.
ARTICLE 5
IMPAIRMENT OR UNIMPAIRMENT OF CLASSES; VOTING
Section 5.1. UNCLASSIFIED CLAIMS. In accordance with Section 1123(a)(1)
of the Bankruptcy Code, Administrative Claims and Tax Claims are not classified
under the Plan and the holders of such Claims are not entitled to vote on the
Plan.
Section 5.2. CLASSES NOT IMPAIRED UNDER THE PLAN. Classes 1, 2, 3, 6(b)
and 6(c) are not impaired under the Plan and, pursuant to Section 1126(f) of the
Bankruptcy Code, are conclusively deemed to have accepted the Plan and are not
entitled to vote on the Plan.
Section 5.3. CLASSES IMPAIRED UNDER THE PLAN. Classes 4 and 5 are
impaired within the meaning of Section 1124 of the Bankruptcy Code, and the
holders of Claims in each of such Classes shall be entitled to vote on the Plan.
Class 6(a), the holders of Interests in ESCA, will retain their stock in ESCA,
but their stock will be substantially diluted. Class 6(a) is impaired.
Acceptances will not be solicited from Class 6(a), which will be deemed to have
rejected the Plan.
ARTICLE 6
CRAMDOWN OF NONACCEPTING CLASS
Section 6.1. CRAMDOWN. Because Class 6(a) is deemed to have rejected the
Plan, the provisions of Section 1129(b) of the Bankruptcy Code will be invoked
by the Debtors. The Debtors will be required to show that the Plan does not
discriminate unfairly, and that it is fair and equitable, as to each Class that
is impaired and has not accepted the Plan.
ARTICLE 7
MEANS FOR IMPLEMENTATION OF THE PLAN
Section 7.1. SUBSTANTIVE CONSOLIDATION. The Plan contemplates and is
predicated upon the Confirmation Order providing
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for the substantive consolidation of the Debtors' Estates and all Claims against
the Debtors, solely for purposes of the Plan (and not for corporate or tax law
purposes). All Claims, including Administrative Claims, against the Debtors are
classified together notwithstanding that certain of such Claims may be asserted
against only one of the Debtors. Thus, for purposes of this Plan, with respect
to the consolidated Claims, including Administrative Claims, (a) all inter-
Debtor Claims, including but not limited to actions seeking to avoid any
prepetition inter-Debtor transactions, and any Claims for reimbursement,
indemnity, or contribution, by and among the Debtors incurred prior to the
Filing Date will be eliminated; (b) except as otherwise ordered by the
Bankruptcy Court or provided by the Plan, for voting purposes, any obligation of
any Debtor relating to a Claim, including any all guaranties, will be deemed to
be one obligation of all of the Debtors and shall be entitled to one vote; (c)
each and every Claim filed in the individual Bankruptcy Case of any Debtor will
be deemed filed against each of the Debtors, and shall be entitled to a single
satisfaction; and (d) for purposes of determining the availability of the right
of setoff of collectively classified Claims under Section 553 of the Bankruptcy
Code or for purposes of any avoidance action under Sections 544-550 of the
Bankruptcy Code, the Debtors shall be treated as one entity so that, subject to
the other provisions of Section 553 of the Bankruptcy Code, debts of the holder
of a collectively classified Claim due to any Debtor may be set off against the
collectively classified Claim of such holder and no recovery may be had under
Sections 544-550 of the Bankruptcy Code solely based on the identity of the
transferor or transferee as one Debtor rather than another Debtor. The filing
of this Plan shall constitute a motion for substantive consolidation on the
terms set forth in this Section.
Section 7.2. DISBURSING AGENT AND DISTRIBUTION ACCOUNT. On the Effective
Date, the Debtors or the Disbursing Agent shall establish the Distribution
Account. The Debtors or the Disbursing Agent shall deposit the following assets
into the Distribution Account:
(a) CASH ASSETS. On the Effective Date, the Debtors shall deposit
all of their Cash Assets into the Distribution Account (including the proceeds
from the settlement with Gulf Palms and CloneTech).
(b) PROCEEDS OF LIQUIDATION. On the Effective Date, the Disbursing
Agent shall deposit into the Distribution Account all of the net proceeds
received from the liquidation of the Debtors' assets.
Section 7.3. DISTRIBUTION OF PROCEEDS.
(a) On the later of ten (10) Business Days after the Effective Date
or the date that is ten (10) Business Days after the Claim becomes an Allowed
Claim, the Disbursing Agent shall pay all Administrative Claims, Tax Claims,
Class 1 Priority Claims, Class 2 Secured Claims and Class 3 Convenience Class
Claims.
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(b) The Disbursing Agent shall make the first distribution to holders
of Unsecured Claims in Classes 4 and 5 (in accordance with their Pro Rata
Shares) on the sixtieth day after the Effective Date, and after establishing
appropriate reserves for (i) unpaid Administrative Claims, (ii) unpaid Tax
Claims, (iii) unpaid Class 1 Priority Claims, (iv) unpaid Class 2 Secured
Claims, (v) unpaid Class 3 Convenience Class Claims, and (vi) Disputed Claims.
(c) Subsequent distributions shall be made by the Disbursing Agent to
Unsecured Creditors in Class 4 and 5 within 10 days after the end of each
calendar month (commencing with the calendar month after the calendar month in
which the first distribution is made), provided however that (i) no distribution
shall be made at the end of any calendar month if the amount available for
distribution at that time is less than $25,000, and (ii) prior to making any
distribution the Disbursing Agent shall adjust the reserves referred to in
subparagraph (c) above.
(d) For the purposes of making distributions and establishing
reserves hereunder, the Disbursing Agent shall assume that all Disputed Claims
shall be allowed in the full amount claimed.
(e) Distributions shall continue to be made by the Disbursing Agent
to unsecured creditors hereunder until January 15, 1997, when the Disbursing
Agent will make a final distribution of all remaining Cash Assets.
Section 7.4. LIQUIDATION OF CERTAIN ASSETS.
(a) With the exception of the assets referred to in the next sentence
and up until the Effective Date, the Debtors will endeavor to sell their
remaining assets, including PPI's inventory of plant extracts. The Debtors will
not seek to sell TPS itself, its potato seed inventory and the Debtors'
intellectual property (with the exception of PPI's inventory of plant extracts)
which will revert to the Debtors.
(b) Except as expressly provided herein, all assets of the Debtors
which are not sold by the Effective Date will be retained by the Debtors.
(c) On or as soon as practicable after the Confirmation Date, the
Debtors will complete the transfer of certain patents to SamYang Genex Co. As
set forth in the Disclosure Statement, ESCA and PPI sold their taxol related
business to SamYang Genex Co. in September of 1995. As part of that sale ESCA
and PPI assigned two patents to SamYang Genex Co. (Patent No. 5,344,775 with a
title of 'Synthesis of Taxenes in Culture Using Pseudocallus Cells' and Patent
No. 5,279,953 with a title of 'In Vivo Production of Taxenes'). Although the
patent assignment was executed and the patents were assigned prior to the Filing
Date, the patent assignment was not recorded prior to the Filing Date. The
Debtors will take all steps necessary to record the foregoing patent assignment
on or as soon as practicable after the Conformation Date.
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(d) On or as soon as practicable after the Confirmation Date, ESCA
will abandon its shares in SAPAD to I.M. Boumarah, ESCA's joint venture partner
in SAPAD (the Debtors do not believe that ESCA's interest in SAPAD has any
value).
Section 7.5. DISBURSING AGENT.
(a) As soon as practicable after the Effective Date, a Disbursing
Agent shall be appointed by the President of ESCA. The Disbursing Agent's
principal function will be to ensure that payments are made, and assets are
transferred, to Creditors in accordance with the terms of the Plan. The
Disbursing Agent will serve at the pleasure of the President of ESCA.
(b) The Cash Assets (which will be distributed to Creditors) will not
be used to fund the business and nonbankruptcy related legal expenses of the
Debtors after the Effective Date (including the expenses of GFL in consummating
its treatment hereunder). In addition, from and after the Effective Date, if
the Debtors or the Disbursing Agent wish to pay any expense from the Cash
Assets, other than pre-Effective Date expenses incurred by the Debtors which do
not require Court approval for payment, they must obtain bankruptcy court
approval therefor.
(c) Upon completion of all payments from the Distribution Account,
the Disbursing Agent will submit to the Bankruptcy Court, and serve on all
Creditors, a post-confirmation status report reflecting all payments made, and
assets transferred, to Creditors under the Plan.
Section 7.6. STATUS OF DEBTORS AFTER EFFECTIVE DATE. The Debtors will
continue to exist as corporations and to engage in business after the Effective
Date. Specifically, ESCA will: (1) engage in the business of developing and
maximizing the value of its intellectual property and that of its subsidiaries;
and (2) seek a merger partner. The Debtors, on the one hand, and William Koenig
(the current chief executive officer of the Debtors) and/or Raymond Moshy (the
current chairman of the board of the Debtors), on the other hand, may enter into
post-Effective Date contracts, on such terms as those parties may mutually
agree, in order to facilitate the post-Effective Date operations of the Debtors
(including, for example, the claims objection process).
Section 7.7. SAN CARLOS MASTER LEASE AND SAN CARLOS SUBLEASES. The
treatment of the Landlord's Claim and all issues relating to the San Carlos
Master Lease, the San Carlos Subleases, the Escrow Agreement and the Escrow
Account have been settled pursuant to an agreement which has been entered into
by and between the Landlord and the Debtors. That agreement is dated March 11,
1996, and was approved by order of the Bankruptcy Court dated on or about
March 15, 1996. The settlement agreement was previously filed and served on all
creditors and other parties in interest.
Section 7.8. GULF PALMS AND CLONETECH. Gulf Palms Agricultural Co.
("Gulf Palms"), CloneTech, Inc. ("CloneTech") and ESCA have resolved their
dispute regarding the ownership of certain
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date palm materials and the amount of the Claims, if any, which Gulf Palms and
CloneTech are entitled to assert against the Debtors. This dispute has been the
subject of substantial litigation in Bankruptcy Court. The settlement will
shortly be documented in a settlement agreement which will be distributed to
creditors and noticed for hearing. In brief, pursuant to the settlement, (a)
ESCA will relinquish all of its right, title and interest in and to the date
palm materials, (b) CloneTech and Gulf Palms will relinquish all of their claims
against ESCA and will not be entitled to receive any distribution under the
Plan, (c) all pending litigation and motions between and among ESCA, Gulf Palms
and CloneTech will be dismissed, and (d) ESCA will receive a payment of $10,000
(which will be part of the Cash Assets to be distributed to Creditors pursuant
to the terms of the Plan).
Section 7.9. RECOVERY RIGHTS. The Debtors do not believe that there are
any Recovery Rights.
Section 7.10. DIRECTION TO PARTIES. From and after the Effective Date,
the Confirmation Order shall constitute an order directing any necessary party
to execute or deliver or to join in the execution and delivery of any instrument
required to effect a transfer of property dealt with by the Plan, and to perform
any other act that is necessary for the consummation of the Plan, pursuant to
Section 1142(b) of the Bankruptcy Code.
Section 7.11. PROVISIONS FOR OBJECTIONS TO AND TREATMENT OF DISPUTED
CLAIMS. The Debtors shall object to the allowance of Claims filed with the
Bankruptcy Court with respect to which the Debtors dispute liability in whole or
in part. Such objections may be Filed before or within 30 days after the
Confirmation Date. All objections shall either be litigated to Final Order or
compromised and settled by the Debtors. Upon the allowance of a Disputed Claim
by either compromise and settlement or by Final Order, the Disbursing Agent
shall distribute to the holder of such Allowed Claim the distribution to which
such holder shall be then entitled on equal status with its Class, had such
Claim not been disputed.
Section 7.12. ESTIMATION OF DISPUTED CLAIMS AND DISPUTED INTERESTS. Any
Disputed Claim may be estimated by the Bankruptcy Court at any time unless such
Claim has been allowed by the Bankruptcy Court or another court.
Section 7.13. MANNER OF PAYMENTS UNDER THE PLAN. Any cash payment to be
made by the Debtors or the Disbursing Agent pursuant to the Plan may, at the
option of the Debtors or the Disbursing Agent, be made by a check or wire
transfer or as otherwise required or provided in applicable agreements.
Section 7.14. UNCLAIMED DISTRIBUTIONS. All distributions shall be made by
mail to either (a) the latest mailing address filed of record with the
Bankruptcy Court, or (b) if no such mailing address has been so filed, the
mailing address reflected on the Schedules of Assets and Liabilities filed by
the Debtors, unless the holder of the Claim notifies the Debtors of a change of
address at the address shown below:
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Bruce J. Borrus
Graham & James LLP/Riddell Williams, P.S.
1001 Fourth Avenue, Suite 4500
Seattle, WA 98154-1065
If a distribution has not cleared the relevant bank account of the Debtors,
or the Distribution Account, as the case may be, within two (2) months of the
date of mailing, or if the distribution is returned to the Debtors or the
Distribution Account because of an inaccurate mailing address and the Disbursing
Agent is unable to discover the proper mailing address, that distribution shall
be forfeited and shall be deposited into the Distribution Account.
Section 7.15. NO DE MINIMIS DISTRIBUTIONS. No distributions totaling less
than Fifteen Dollars ($15.00) shall be required to be distributed by the Debtors
or the Disbursing Agent to the holder of any Claim entitled to receive
distributions under the Plan, unless specifically requested in writing by such
holder.
Section 7.16. TAX REPORTING AND WITHHOLDING. The Debtors and the
Disbursing Agent may condition any distribution to a Creditor pursuant to this
Plan upon the receipt by the Debtors or the Disbursing Agent, as the case may
be, of any information required for reporting to any taxing authority with
jurisdiction over the Debtors or the Disbursing Agent. In addition, the Debtors
and the Disbursing Agent are hereby authorized and permitted to withhold from
any distribution to a Creditor pursuant to this Plan such amounts as are
necessary to comply with applicable tax law.
Section 7.17. STOCK AUTHORIZATION AND ISSUANCE. Upon the Effective Date,
ESCA's Articles of Incorporation shall be amended to authorize 88,000,000 shares
of common stock in addition to the 12,000,000 shares that are currently
authorized. The total amount of authorized common stock will be 100,000,000
shares. On or as soon as practicable after the Effective Date, ESCA will issue
to Ultra Fund 66,060,000 shares of common stock, so that Ultra Fund will own
ninety percent of the issued and outstanding shares of ESCA.
Section 7.18. NEW DIRECTORS AND OFFICERS. On or as soon as practicable
after the Effective Date, the directors and officers of the Debtors shall be
replaced by: Michelle Kline and Kristi La-Band, who shall serve as directors of
all three of the Debtors; and Michelle Kline, who shall serve as president,
vice-president, treasurer and secretary of all three of the Debtors. The
Articles of Incorporation and By-Laws of the Debtors shall, on the Effective
Date, be amended to provide that the number of directors of each of the Debtors
be two (2), and also to provide that the terms of directors not be staggered.
Section 7.19. POST-CONFIRMATION LOAN. Ultra Fund (or an entity related to
Ultra Fund) shall provide ESCA with a $50,000 line of credit to finance the
Debtors post-confirmation business activities. The loan shall be convertible
into equity at the lender's option. The conversion rate shall be 130 shares per
dollar.
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ARTICLE 8
EXECUTORY CONTRACTS
Section 8.1. REJECTION OF EXECUTORY CONTRACTS. The Debtors will reject,
as of the Effective Date and pursuant to Section 365(b) of the Bankruptcy Code,
all Executory Contracts to which they are a party, including any Executory
Contracts with Imperial Date Gardens and Pioneer Hi-Bred International, Inc., to
the extent not already rejected. The Plan shall be deemed a motion for
authority to reject all Executory Contracts, to the extent not already rejected,
which rejection shall be effective as of the Effective Date.
Section 8.2. CLAIMS FOR DAMAGES. Each Person who is a party to an
Executory Contract rejected pursuant to this Article 8 shall be entitled to
File, not later than thirty (30) days after such rejection, a proof of Claim for
damages alleged to arise from the rejection of the Executory Contract to which
such Person is party. Objections to any proof of Claim shall be Filed by the
Disbursing Agent, as agent for the Estates, not later than thirty (30) days
after such proof of Claim is Filed, and the Bankruptcy Court shall determine any
such objections. Treatment of such Claims under the Plan shall be consistent
with the treatment received by holders of other Claims in the Class into which
such Claims fall.
ARTICLE 9
RETENTION OF JURISDICTION
Section 9.1. JURISDICTION OF BANKRUPTCY COURT. Following the Effective
Date, the Bankruptcy Court will retain jurisdiction of the Bankruptcy Cases for
the following purposes:
(a) To hear and determine any and all pending applications for the
rejection and disaffirmance, assumption or assignment of Executory Contracts or
unexpired leases, any objection to Claims resulting therefrom, and the allowance
of Claims resulting therefrom.
(b) To hear and determine any and all applications, adversary
proceedings, contested matters and other litigated matters pending on the
Confirmation Date.
(c) To ensure that the distributions to holders of Claims are
accomplished as provided herein.
(d) To hear and determine any objections to Claims and to allow or
disallow any Disputed Claim in whole or in part.
(e) To enter and implement such orders as may be appropriate in the
event Confirmation is for any reason stayed, reversed, revoked, modified or
vacated.
(f) To hear and determine all applications for compensation of
professionals and reimbursement of expenses under Section 330 of the Bankruptcy
Code.
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(g) To hear the Debtors' or Disbursing Agent's application, if any,
to modify the Plan in accordance with Section 1127 of the Bankruptcy Code.
After Confirmation, the Debtors may also, so long as it does not adversely
affect the interests of Creditors, institute proceedings in the Bankruptcy Court
to remedy any defect or omission or reconcile any inconsistencies in the Plan,
disclosure statement or the Confirmation Order, in such manner as may be
necessary to carry out the purposes and effects of the Plan.
(h) To hear and determine disputes arising in connection with the
Plan or its implementation.
(i) To construe and to take any action to enforce the Plan and issue
such orders as may be necessary for the implementation, execution and
consummation of the Plan.
(j) To take any action to resolve any disputes arising out of or
relating to any Claim or any Interest; to hear and determine other issues
presented by or arising under the Plan, including claims made by holders of
Claims that are unimpaired hereunder; and to take any action to resolve any
disputes of Creditors with respect to their Claims.
(k) To determine such other matters and for such other purposes as
may be provided in the Confirmation Order.
(l) To hear and determine applications for orders sought pursuant to
Section 7.10 hereof.
(m) To enter a final decree in each of the Bankruptcy Cases.
(n) To hear and determine any other matters not inconsistent with
Chapter 11 of the Bankruptcy Code.
The retention of jurisdiction provided for herein shall be exclusive
with respect to all matters set forth in subparagraphs (a) through (n) hereof so
as to preserve for the Debtors the benefits of the Plan, subject to the
Bankruptcy Court's power under Section 305 of the Bankruptcy Code or 28 U.S.C.
Section 1334(c) to abstain as to all or part of a proceeding.
ARTICLE 10
CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS
Section 10.1. CONDITIONS TO CONFIRMATION. Confirmation of the Plan shall
not occur unless each of the following conditions has occurred or has been
waived in a writing executed by the Debtors:
(a) The Confirmation Date shall occur no later than July 15, 1996.
(b) The Confirmation Order shall be in form and substance acceptable
to the Debtors and Ultra Fund.
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Section 10.2. CONDITIONS TO EFFECTIVENESS. Notwithstanding any other
provision of the Plan or the Confirmation Order, the Effective Date of the Plan
shall not occur unless and until each of the following conditions has occurred
or been waived in a writing executed by the Debtors:
(a) The Confirmation Order shall have become a Final Order; and
(b) The Effective Date shall occur no later than July 29, 1996.
ARTICLE 11
TITLE TO PROPERTY AND DISCHARGE
Section 11.2. DISCHARGE. The Plan does not provide for the liquidation of
all or substantially all of the property of the estate and the Debtors will
engage in business after consummation of the Plan. The Confirmation of the Plan
discharges the Debtors from any debt that arose before the Confirmation Date,
and any debt of a kind specified in section 502(g), 502(h), or 502(i) of the
Code, whether or not:
(i) a proof of the claim based on such debt is filed or deemed filed
under section 501 of the Code;
(ii) such claim is allowed under section 502 of the Code; or
(iii) the holder of such claim has accepted the Plan.
ARTICLE 12
MISCELLANEOUS PROVISIONS
Section 12.1. GOVERNING LAW. Except to the extent the Bankruptcy Code or
Bankruptcy Rules are applicable, the rights and obligations arising under the
Plan shall be governed by, and construed and enforced in accordance with, the
laws of the State of California, without giving effect to the principles of
conflicts of law thereof.
Section 12.2. HEADINGS. The headings of the Articles, sections and
paragraphs of the Plan are intended as an aid to the reader and should be
considered as an aid to interpretation.
Section 12.3. RIGHT TO WITHDRAW. The Debtors reserve the right to revoke
and/or withdraw the Plan prior to the Confirmation Date. If the Debtors revoke
or withdraw the Plan, the Plan shall be null and void and, in such event,
nothing contained herein shall be deemed to constitute a waiver or release of
any Claims by or against the Debtors or any other Person or to prejudice in any
manner the rights of the Debtors or any other Person.
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Section 12.4. TIME. In computing any period of time prescribed or allowed
by the Plan, the day of the act, event, or default from which the designated
period of time begins to run shall not be included. The last day of the period
so computed shall be included, unless it is not a Business Day, or, when the act
to be done is the Filing of a paper in court, a day on which weather or other
conditions have made the clerk's office inaccessible, in which event the period
runs until the end of the next day which is not one of the aforementioned days.
When the period of time prescribed or allowed is less than 11 days, intermediate
days that are not Business Days shall be excluded in the computation.
Section 12.5. CONSTRUCTION. The rules of construction set forth in
Section 102 of the Bankruptcy Code shall apply to the construction of the Plan.
Section 12.6. AMENDMENTS. The Plan may be amended, modified or
supplemented by the Debtors before or after the Confirmation Date without
additional disclosure pursuant to Section 1125 of the Bankruptcy Code and in the
manner provided for by Section 1127 of the Bankruptcy Code or as otherwise
permitted by law, except as the Bankruptcy Court may otherwise order.
Section 12.7. NO INTEREST. Except as expressly stated in the Plan, or
allowed by the Bankruptcy Court, no interest, penalty or late charge is to be
allowed on any Claim subsequent to the Filing Date.
Section 12.8. NO ATTORNEYS' FEES. No attorneys' fees will be paid with
respect to any Claim except as specified herein or as allowed by a Final Order
of the Bankruptcy Court.
Section 12.9. AMOUNTS OF CLAIMS. All references to Claims and amounts of
Claims refer to the amount of the Claim allowed by Final Order by the Bankruptcy
Court or by the Plan. The Debtors and other interested parties reserve the
right, both before and after Confirmation, to object to Claims so as to have the
Bankruptcy Court determine the allowed amount of such Claim.
Section 12.10. NO WAIVER OF DISCHARGE. Except as otherwise specifically
provided herein, nothing in the Plan shall be deemed to waive, limit or restrict
in any way the discharge granted upon Confirmation of the Plan in Section 1141
of the Bankruptcy Code.
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Section 12.11. INTEGRATION. The provisions of the Plan and the
Confirmation Order supersede any and all prior agreements, documents,
understandings, written or otherwise, in respect of any Claim against or
Interest in the Debtors, and the treatment or satisfaction thereof. All such
prior agreements, documents or understandings are merged herein, and no party,
Creditor or Interest holder may hereafter pursue or prosecute any Claim or
demand arising out of or pertaining to such superseded agreements, documents or
understandings.
DATED: June 6 , 1996
---
ESCAGENETICS CORPORATION
By: /s/ William J. Koenig
------------------------------
Name: William J. Koenig
Title: President and
Chief Executive Officer
PHYTOPHARMACEUTICALS, INC.
By: /s/ William J. Koenig
------------------------------
Name: William J. Koenig
Title: President and
Chief Executive Officer
TPS PRODUCTS CO.
By: /s/ William J. Koenig
------------------------------
Name: William J. Koenig
Title: President and
Chief Executive Officer
PRESENTED BY:
GIBSON, DUNN & CRUTCHER
JONATHAN M. LANDERS
DESMOND CUSSEN
One Montgomery Street
Telesis Tower
San Francisco, California 94104-4505
By: /s/ Desmond J. Cussen
------------------------------
Desmond J. Cussen
Date: June 6 , 1996
---
Attorneys for Debtors
ESCAGENETICS CORPORATION
PHYTOPHARMACEUTICALS, INC.
TPS PRODUCTS CO.
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CERTIFICATE OF INCORPORATION
OF
ESCAGENETICS CORPORATION
* * * * * * *
FIRST. The name of the corporation is ESCAGENETICS CORPORATION.
SECOND. The address of its registered office in the State of Delaware is
229 South State Street, Dover, Delaware 19901. The name of its registered agent
at such address is United States Corporation Company.
THIRD. The nature of the business or purposes to be conducted or promoted
is to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware.
FOURTH. The total number of shares of all classes of capital stock
which the corporation shall have authority to issue is One Hundred and One
Million (101,000,000) shares, comprised of One Hundred Million (100,000,000)
shares of Common Stock with a par value of One-One Hundredth of One Cent
($.0001) per share (the "Common Stock") and One Million (1,000,000) shares of
Preferred Stock with a par value of One Cent ($.01) per share (the "Preferred
Stock").
A description of the respective classes of stock and a statement of the
designations, preferences, voting powers (or no voting powers), relative,
participating, optional or other special rights and privileges and the
qualifications, limitations and restrictions of the Preferred Stock and Common
Stock are as follows:
A. PREFERRED STOCK
The Preferred Stock may be issued in one or more series at such time
or times and for such consideration or considerations as the board of directors
may determine. Each series shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes. Except as may be
expressly provided in this Certificate of Incorporation, including any
certificate of designations for a series of Preferred Stock, different series of
Preferred Stock shall not be construed to constitute different classes of shares
for the purpose of voting by classes.
The board of directors is expressly authorized, subject to the
limitations prescribed by law and the provisions of this Certificate of
Incorporation,
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to provide for the issuance of all or any shares of the Preferred Stock in one
or more series, each with such designations, preferences, voting powers (or no
voting powers), relative, participating, optional or other special rights and
privileges and such qualifications, limitations or restrictions thereof as shall
be stated in the resolution or resolutions adopted by the board of directors to
create such series, and a certificate of designations setting forth a copy of
said resolution or resolutions shall be filed in accordance with the General
Corporation Law of the State of Delaware. The authority of the board of
directors with respect to each such series shall include without limitation of
the foregoing the right to specify the number of shares of each such series and
to authorize an increase or decrease in such number of shares and the right to
provide that the shares of each such series may be: (i) subject to redemption
at such time or times and at such price or prices; (ii) entitled to receive
dividends (which may be cumulative or non-cumulative) at such rates, on such
conditions, and at such times, and payable in preference to, or in such relation
to, the dividends payable on any other class or classes or any other series;
(iii) entitled to such rights upon the dissolution of, or upon any distribution
of the assets of, the corporation; (iv) convertible into, or exchangeable for,
shares of any other class or classes of stock, or of any other series of the
same or any other class or classes of stock of the corporation at such price or
prices or at such rates of exchange, and with such adjustments, if any; (v)
entitled to the benefit of such limitations, if any, on the issuance of
additional shares of such series or shares of any other series of Preferred
Stock; or (vi) entitled to such other preferences, powers, qualifications,
rights and privileges, all as the board of directors may deem advisable and as
are not inconsistent with law and the provisions of this Certificate of
Incorporation.
B. COMMON STOCK
1. RELATIVE RIGHTS OF PREFERRED STOCK AND COMMON STOCK. All
preferences, voting powers, relative, participating, optional or other special
rights and privileges, and qualifications, limitations, or restrictions of the
Common Stock are expressly made subject and subordinate to those that may be
fixed with respect to any shares of the Preferred Stock.
2. VOTING RIGHTS. Except as otherwise required by law or this
Certificate of Incorporation, including any certificate of designations for a
series of Preferred Stock, each holder of Common Stock shall have one vote in
respect of each share of stock held by him of record on the books of the
corporation for the election of directors and on all matters submitted to a vote
of stockholders of the corporation.
3. DIVIDENDS. Subject to the preferential rights of the Preferred
Stock, the holders of shares of Common Stock shall be entitled to receive, when
and if declared by the board of directors, out of the assets of the corporation
which
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are by law available therefor, dividends payable either in cash, in property or
in shares of capital stock.
4. DISSOLUTION, LIQUIDATION OR WINDING UP. In the event of any
dissolution, liquidation or winding up of the affairs of the corporation, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of the Preferred Stock, holders of Common Stock shall be
entitled, unless otherwise provided by law or this Certificate of Incorporation,
including any certificate of designations for a series of Preferred Stock, to
receive all of the remaining assets of the corporation of whatever kind
available for distribution to stockholders ratably in proportion to the number
of shares of Common Stock held by them respectively.
FIFTH. The name and mailing address of the sole incorporator is as
follows:
Name Mailing Address
---- ---------------
Martina W. Knee Heller, Ehrman, White & McAuliffe
525 University Avenue, Suite 1100
Palo Alto, California 94301
SIXTH. The corporation is to have perpetual existence.
SEVENTH. In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware:
A. The board of directors of the corporation is expressly authorized:
(i) To make, alter or repeal the by-laws of the corporation.
(ii) To authorize and cause to be executed mortgages and liens upon
the real and personal property of the corporation.
(iii) To set apart out of any of the funds of the corporation
available for dividends a reserve or reserves for any proper purpose and to
abolish any such reserve in the manner in which it was created.
(iv) By a majority of the whole board, to designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member of any
committee. The by-laws may provide that in the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to sit at the
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meeting in place of any such absent or disqualified member. Any such committee,
to the extent provided by the resolution of the board of directors, or in the
by-laws of the corporation, shall have and may exercise all the powers and
authority of the board of directors in the management of the business and
affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers which may require it; but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation
(except that a committee may, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of stock adopted by the board
of directors as provided in Section 151(a) of the General Corporation Law of the
State of Delaware, fix any of the preferences or rights of such shares relating
to dividends, redemption, dissolution, any distribution of assets of the
corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the corporation), adopting an agreement of merger or
consolidation under Sections 251 or 252 of the General Corporation Law of the
State of Delaware, recommending to the stockholders the sale, lease or exchange,
of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the by-laws of the corporation; and,
unless the resolution or by-laws expressly so provide, no such committee shall
have the power or authority to declare a dividend, to authorize the issuance of
stock, or to adopt a certificate of ownership and merger pursuant to Section 253
of the General Corporation Law of the State of Delaware.
(v) When and as authorized by the stockholders in accordance with
statute, to sell, lease or exchange all or substantially all of the property and
assets of the corporation, including its good will and its corporate franchises,
upon such terms and conditions and for such consideration, which may consist in
whole or in part of money or property including shares of stock in, and/or other
securities of, any other corporation or corporations, as its board of directors
shall deem expedient and for the best interests of the corporation.
B. (i) Election of directors need not be by written ballot unless
the By-Laws of the corporation shall so provide.
(ii) Except as otherwise provided pursuant to the
provisions of Article FOURTH hereof relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under specified
circumstances, the number of directors of the corporation shall be fixed from
time to time by or pursuant to the By-Laws of the corporation.
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(iii) Advance notice of nominations for the election of
directors at any annual or special meeting of stockholders, other than by the
Board of Directors or a duly authorized committee thereof or any authorized
officer of the corporation to whom the Board of Directors or such committee
shall have delegated such authority, and certain information and representations
concerning the person or persons making such nomination and the nominee or
nominees, shall be given to the corporation in the manner provided in the
By-Laws.
(iv) To the extent not covered by the rules and regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), advance notice of any
stockholder proposal to be considered by the stockholders at any annual or
special meeting of stockholders, and certain information relating to the
proposal and the stockholder making such proposal, shall be given to the
corporation in the manner provided in the By-Laws.
(v) Except as otherwise provided pursuant to the provisions
of Article FOURTH hereof relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation to elect directors under specified circumstances, newly
created directorships resulting from any increase in the authorized number of
directors and any vacancies on the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause
shall be filled by a majority vote of the directors then in office, and
directors so chosen shall hold office for a term expiring at the next Annual
Meeting of Stockholders. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any incumbent director.
(vi) Subject to the rights of the holders of any class or
series of stock having a preference over the Common Stock as to dividends or
upon liquidation to elect directors under specified circumstances, any director
or directors may be removed from office at any time, but only for cause and only
by the affirmative vote of the holders of at least 66-2/3% of the voting power
of the then outstanding shares of capital stock of the corporation entitled to
vote generally in the election of directors voting together as a single class.
(vii) Any action required or permitted to be taken by the
holders of the shares of capital stock of the corporation entitled to vote on
any given matter may be effected at a duly called annual or special meeting of
such holders or by consent in writing by such holders; provided, that the
actions to be taken pursuant to
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any such written consent shall not become effective until 45 days after a
notice, complying in form and content with Regulations 14A or 14C under the
Exchange Act, shall have been delivered to all stockholders of record as of a
date no more than 60 days and not less than 10 days before the date of such
consent.
(viii) Notwithstanding any other provisions of this Certificate
of Incorporation (excepting Section B(ix) hereof) or the By-Laws of the
corporation, and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or the By-Laws of the
corporation, the affirmative vote of the holders of 75% or more of the voting
power of the then outstanding shares of capital stock of the corporation
entitled to vote on such matters, voting together as a single class, shall be
required to amend, repeal or adopt any provision in this Certificate of
Incorporation or By-Laws inconsistent with this Section B.
(ix) Subsections (ii) through (ix), inclusive, of this Section
B shall terminate and be of no further force and effect after the fifth
annual meeting of the stockholders subsequent to the annual meeting at which
this amendment to Section B, subsection (ix) was adopted; provided, that such
provisions shall remain in effect, uninterrupted, if the holders of 50% or
more of the voting power of the then outstanding shares of capital stock of
the corporation entitled to vote on such matters, voting together as a single
class, shall, at such meeting, vote to reaffirm the provisions of this
Section B, either for a determinable period of time or indefinitely, with no
period of time stated.
4. The foregoing amendments have been approved by the Board of
Directors of this Corporation.
5. These amendments were approved by the required vote of the
shareholders of the Corporation and were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware. The Corporation has one class of stock, the holders of which are
entitled to vote with respect to the amendment. The Corporation presently has
3,638,727 shares of common stock outstanding. The number of shares of stock
voted in favor of the amendment equaled or exceeded the vote required and a
percentage vote of more than 50% of the aggregate outstanding shares of common
stock was required for the approval of the amendment.
C. The books of the corporation may be kept at such place within or
without the State of Delaware as the by-laws of the corporation may provide or
as may be designated from time to time by the board of directors of the
corporation.
EIGHTH. Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section
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291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
the provisions of Section 279 of Title 8 of the Delaware Code, order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three-
fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
NINTH. A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Delaware General Corporation Law is amended hereafter
to authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the corporation
shall be eliminated or limited to the fullest extent permitted by the Delaware
General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the stockholders
of the corporation shall not adversely affect any right or protection of a
director of the corporation existing at the time of such repeal or modification.
TENTH.
A. RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative ("proceeding"), by reason of the fact
that he or she or a person of whom he or she is the legal representative, is or
was a director or officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation as a director or officer, employee or
agent of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be
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indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended, (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than said Law permitted the Corporation to provide prior
to such amendment) against all expenses, liability and loss including attorneys'
fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to
be paid in settlement) reasonably incurred or suffered by such person in
connection therewith and such indemnification shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of his or her heirs, executors and administrators; PROVIDED, HOWEVER,
that the Corporation shall indemnify any such person seeking indemnity in
connection with an action, suit or proceeding (or part thereof) initiated by
such person only if such action, suit or proceeding (or part thereof) was
authorized by the board of directors of the Corporation. Such right shall be a
contract right and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of its final
disposition; PROVIDED, HOWEVER, that the payment of such expenses incurred by a
director or officer of the Corporation in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of such
proceeding, shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such director or officer, to repay all amounts
so advanced if it should be determined ultimately that such director or officer
is not entitled to be indemnified under this Section or otherwise.
B. RIGHT OF CLAIMANT TO BRING SUIT
If a claim under Paragraph A of Article TENTH is not paid in full
by the Corporation within ninety (90) days after a written claim has been
received by the Corporation, the claimant may at any time thereafter bring
suit against the Corporation to recover the unpaid amount of the claim and,
if successful in whole or in party, the claimant shall be entitled to be paid
also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition
where the required undertaking, if any, has been tendered to this
Corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of
the Corporation (including its Board of Directors, independent legal counsel,
or its stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct
set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including
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its Board of Directors, independent legal counsel, or its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that claimant has not met the
applicable standard of conduct.
C. NON-EXCLUSIVITY OF RIGHTS
The rights conferred on any person by Paragraphs A and B of Article
TENTH shall not be exclusive of any other right which such persons may have or
hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
D. INSURANCE
The Corporation may maintain insurance, at its expense, to protect
itself and any such director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
ELEVENTH. The corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon a stockholder
herein are granted subject to this reservation.
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AMENDED AND RESTATED BYLAWS
OF
ESCAGENETICS CORPORATION
ARTICLE I
STOCKHOLDERS' MEETINGS
(1) MEETING PLACE: All meetings of the stockholders shall be held
at the principal office of the corporation, or at such other place as shall be
determined from time to time by the Board of Directors, and the place at which
any such meeting shall be held shall be stated in the notice and call of the
meeting.
(2) ANNUAL MEETING TIME: The annual meeting of the stockholders
for the election of directors and for the transaction of such other business as
may properly come before the meeting, shall be held each year on a day and at a
time to be set by the Board of Directors. The time and place of holding any
annual meeting may be changed by resolution of the Board of Directors, provided
that notification of such change shall meet the notice requirements pursuant to
Section (6) hereof. If the annual meeting is not held on the date designated
therefor, the Board shall cause the meeting to be held as soon thereafter as may
be convenient.
(3) BUSINESS CONDUCTED AT ANNUAL MEETING:
(a) At an annual meeting of stockholders, an item of
business may be conducted, and a proposal may be considered and acted upon, only
if such item or proposal is brought before the meeting (i) by, or at the
direction of, the Board of Directors, or (ii) by any stockholder of the
corporation who is entitled to vote at the meeting and who complies with the
procedures set forth in the remainder of this Section (3). This Section (3)
shall not apply to matters of procedure.
(b) For an item of business or proposal to be brought
before an annual meeting by a stockholder, the stockholder must have given
timely notice thereof in writing to the Secretary of the corporation. To be
timely, a stockholder's notice must be delivered to, or mailed and received at,
the principal office of the corporation not less than seventy (70) days prior to
the date scheduled for the meeting (regardless of any postponements, deferrals
or adjournments of that meeting to a later date), or, if notice or public
disclosure of the date scheduled for the meeting is not given or made at least
eighty (80) days prior thereto, not more than ten (10) days following the day on
which notice of the date scheduled for the meeting is mailed or the day on which
disclosure of that date is made, whichever is earlier.
(c) A stockholder's notice to the Secretary under
subsection (b) hereof shall set forth, as to each item of business or proposal
the stockholder intends to bring before the meeting (i) a brief description of
the item of business or proposal and the reasons for bringing it before the
meeting, (ii) the name and address, as they appear on the corporation's books,
of the stockholder and of any other stockholders that the stockholder knows or
anticipates will support the item of business or proposal, (iii) the number and
class of shares of stock of the corporation that are beneficially owned on the
date of such notice by the stockholder and by any such other stockholders, and
(iv) any financial interest of the stockholder or any such other stockholders in
such item of business or proposal.
(d) The Board of Directors, or a designated committee
thereof, may reject a stockholder's notice that is not timely given in
accordance with the terms of subsection (b) hereof. If the Board of Directors,
or a designated committee thereof, determines that the information provided in
a stockholder's notice does not satisfy the requirements of subsection (c)
hereof in any material respect, the Secretary of the corporation shall notify
the stockholder of the deficiency in the notice. The stockholder shall have an
opportunity to cure the
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deficiency by providing additional information to the Secretary within such
period of time, not to exceed five (5) days from the date such deficiency notice
is given to the stockholder, as the Board of Directors or such committee shall
reasonably determine. If the deficiency is not cured within such period, or if
the Board of Directors or such committee determines that the additional
information provided by the stockholder, together with information previously
provided, does not satisfy the requirements of subsection (c) hereof in any
material respect, then the Board of Directors or such committee may reject the
stockholder's notice.
(e) Notwithstanding the procedures set forth in
subsection (d) hereof, if a stockholder desires to bring an item of business or
proposal before an annual meeting, and neither the Board of Directors nor any
committee thereof has made a prior determination of whether the stockholder has
complied with the procedures set forth in this Section (3) in connection with
such item of business or proposal, then the chairman of the meeting shall
determine and declare at the meeting whether the stockholder has so complied. If
the chairman determines that the stockholder has so complied, then the chairman
shall so state and ballots shall be provided for use at the meeting with respect
to such item of business or proposal. If the chairman determines that the
stockholder has not so complied, then, unless the chairman, in his sole and
absolute discretion, determines to waive such compliance, the chairman shall
state that the stockholder has not so complied and the item of business or
proposal shall not be brought before the meeting.
(f) This Section (3) shall not prevent the consideration
and approval or disapproval at the annual meeting of reports of officers,
directors and committees of the Board of Directors, but, in connection with such
reports, no item of business may be conducted, and no proposal may be considered
and acted upon, unless there has been compliance with the procedures set forth
in this Section (3) in connection therewith.
(4) ANNUAL MEETING - ORDER OF BUSINESS: At the annual meeting of
stockholders, the order of business shall be as follows unless otherwise
determined by the presiding officer:
(a) Calling the meeting to order.
(b) Proof of notice of meeting (or filing waiver) and proxy
report.
(c) Reading of minutes of last annual meeting.
(d) Reports of officers.
(e) Reports of committees.
(f) Confirmation of selection of independent accountants.
(g) Election of directors.
(h) Miscellaneous business.
(5) SPECIAL MEETINGS:
(a) Special meetings of the stockholders for any purpose or
purposes may be called by the Chairman of the Board, the President, the Board of
Directors, or the holder or holders of not less than twenty-five percent (25%)
of all shares entitled to vote at the meeting
(b) Subject to the requirements of Section (4) of Article
III if the purpose of the special meeting is the election of directors, if a
special meeting is called by any person or person other than the Board of
Directors, the Chairman of the Board or the President, the request shall be in
writing, specifying the time of such meeting and the general nature of the
business proposed to be transacted, and shall be delivered personally or sent by
registered mail or by telegraphic or other facsimile transmission to the
Chairman of the Board, the President, any Vice President, or the Secretary of
the corporation. No business may be transacted at such special meeting
otherwise than specified in such notice. The officer receiving the request
shall cause notice to be promptly given to the stockholders entitled to vote, in
accordance with the provisions of Section (6) hereof, that a meeting will be
held not less than thirty-five (35) nor more than sixty (60) days after the
receipt of the request. If the notice is not given within twenty (20) days
after the receipt of the request, the person or persons
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requesting the meeting may give the notice. Nothing contained in this
subsection (b) shall be construed as limiting, fixing, or affecting the time
when a meeting of stockholders called by action of the Board of Directors may be
held.
(6) NOTICE OF MEETINGS:
(a) Except as otherwise provided by law or the Certificate
of Incorporation, written notice of the place, date, and time of the annual
meeting of stockholders shall be given at least ten (10) days, and not more than
sixty (60) days, prior to the meeting to each stockholder of record entitled to
vote at such meeting.
(b) Except as otherwise provided by law or the Certificate
of Incorporation, written notice of the place, date, time, and purpose of each
special meeting of stockholders shall be given at least ten (10) days, and not
more than sixty (60) days, prior to the meeting to each stockholder of record
entitled to vote at such meeting.
(7) VOTING LIST: At least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, shall be made, arranged in alphabetical
order, with the address of and number of shares held by each stockholder. This
list shall be kept open at such meeting for the inspection of any stockholder
and shall also be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of ten days
prior to such meeting either at a place within the city where the meeting is to
be held, which place shall be specified in the notice of the meeting, or, if not
so specified, at the place where the meeting is to be held.
(8) QUORUM: Except as otherwise provided by law, the Certificate
of Incorporation or these Bylaws, a quorum shall exist at any meeting of
stockholders if a majority of the votes entitled to be cast is represented in
person or by proxy. Any shares, the voting of which at said meeting has been
enjoined, or which for any reason cannot be lawfully voted at such meeting,
shall not be counted to determine a quorum at such meeting. If less than a
majority of the outstanding shares entitled to vote are represented at a
meeting, a majority of the shares so represented may adjourn the meeting from
time to time without further notice. If a quorum is present or represented at a
reconvened meeting following such an adjournment, any business may be transacted
that might have been transacted at the meeting as originally called. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. If the adjournment is for more than
thirty (30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. In the case of any
meeting of stockholders that is adjourned more than once because of the failure
of a quorum to attend, those who attend the third convening of such meeting,
although less than a quorum, shall nevertheless constitute a quorum for the
purpose of electing directors, provided that the percentage of votes represented
at the third convening of such meeting shall not be less than one-third of the
votes entitled to be cast.
(9) MANNER OF ACTING: If a quorum is present, the affirmative vote
of the majority of the votes represented at the meeting and entitled to be cast
on the subject matter shall be the act of the stockholders, unless the vote of a
greater number is required by these Bylaws, the Certificate of Incorporation, or
the General Corporation Law of Delaware.
(10) VOTING OF SHARES: Except as otherwise provided in these Bylaws
or to the extent that voting rights of the shares of any class or classes are
limited or denied by the Certificate of Incorporation, each stockholder, on each
matter submitted to a vote at a meeting of stockholders, shall have one vote for
each share of stock registered in his or her name in the books of the
corporation. Stockholders of this corporation shall not have the right to
cumulate votes with respect to elections of directors in the manner prescribed
by Title 8, Section 214, of the General Corporation Law of Delaware.
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(11) BENEFICIAL OWNERS:
(a) If shares or other securities having voting power stand
of record in the names of two (2) or more persons, whether fiduciaries, members
of a partnership, joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary relationship
respecting the same shares, unless the Secretary is given written notice to the
contrary and is furnished with a copy of the instrument or order appointing them
or creating the relationship wherein it is so provided, their acts with respect
to voting shall have the following effect: (a) if only one (1) votes, his act
binds all; (b) if more than one (1) votes, the act of the majority so voting
binds all; (c) if more than one (1) votes, but the vote is evenly split on any
particular matter each faction may vote the securities in question
proportionally, or may apply to the Delaware Court of Chancery for relief as
provided in the General Corporation Law of Delaware, Section 217(b). If the
instrument filed with the Secretary shows that any such tenancy is held in
unequal interests, a majority or even-split for the purpose of this
subsection (a) shall be a majority or even-split in interest.
(b) Persons holding stock in a fiduciary capacity shall be
entitled to vote the shares so held. Persons whose stock is pledged shall be
entitled to vote, unless in the transfer by the pledgor on the books of the
corporation he has expressly empowered the pledgee to vote thereon, in which
case only the pledgee, or his proxy, may represent such stock and vote thereon.
(12) FIXING OF RECORD DATE:
(a) For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders, or any adjournment thereof,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board, for such determination of stockholders, such date to be not more than
sixty (60) days and not less than ten (10) days prior to the date of such
meeting. If no record date is fixed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board, and which date shall not be more than ten (10) days after the date
upon which the resolution fixing the record date is adopted by the Board. If no
record date has been fixed by the Board, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by law, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the corporation by delivery to its
registered office in Delaware, its principal place of business, or an officer or
agent of the corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the corporation's
registered office in Delaware shall be by hand or by certified or registered
mail, return receipt requested. If no record date has been fixed by the Board
and prior action by the Board is required by law, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the day on which the
Board adopts the resolution taking such prior action.
(c) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion, or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the
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resolution fixing the record date is adopted, and which record date shall be not
more than sixty (60) days prior to such action. If no record date is fixed, the
record date for determining stockholders for any such purpose shall be at the
close of business on the day on which the Board adopts the resolution relating
thereto.
(13) PROXIES: A stockholder may vote either in person or by proxy
executed in writing by the stockholder or his or her duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
corporation before or at the time of the meeting. A proxy shall become invalid
three years after the date of its execution, unless otherwise provided in the
proxy. A proxy with respect to a specified meeting shall entitle the holder
thereof to vote at any reconvened meeting following adjournment of such meeting
but shall not be valid after the final adjournment thereof.
(14) ACTION BY STOCKHOLDERS WITHOUT A MEETING:
(a) Any action required or which may be taken at a meeting
of stockholders of the corporation may be taken without a meeting, without prior
notice and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted.
(b) Every written consent shall bear the date of signature
of each stockholder who signs the consent, and no written consent shall be
effective to take the corporate action referred to therein unless, within sixty
(60) days of the earliest dated consent delivered to the corporation in the
manner herein required, written consents signed by a sufficient number of
stockholders to take action are delivered to the corporation by delivery to its
registered office in the State of Delaware, its principal place of business or
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested.
(15) WAIVER OF NOTICE: A waiver of any notice required to be given
any stockholder, signed by the person or persons entitled to such notice,
whether before or after the time stated therein for the meeting, shall be
equivalent to the giving of such notice. The attendance of a stockholder at a
meeting shall constitute a waiver of notice of such meeting, except when a
stockholder attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Any stockholder so waiving shall be bound
by the proceedings of any such meeting in all respects as if due notice thereof
had been given.
(16) ACTION OF STOCKHOLDERS BY COMMUNICATIONS EQUIPMENT:
Stockholders may participate in a meeting of stockholders by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence in person at a meeting.
ARTICLE II
STOCK
(1) ISSUANCE OF SHARES: No shares of the corporation shall be
issued unless authorized by the Board of Directors, which authorization shall
include the maximum number of shares to be issued and the consideration to be
received for each share.
(2) CERTIFICATES: All shares of the corporation shall be
represented by certificates in such form, not inconsistent with the Certificate
of Incorporation, as the Board of Directors may from time to time
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prescribe. Certificates of stock shall be issued in numerical order and shall
be signed by the President or any Vice President and the Secretary or an
Assistant Secretary, and may be sealed with the seal of the corporation or a
facsimile thereof. The signatures of such officers may be facsimiles if the
certificate is manually signed on behalf of a transfer agent, or registered by a
registrar, other than the corporation itself or an employee of the corporation.
If an officer who has signed or whose facsimile signature has been placed upon
such certificate ceases to be such officer before the certificate is issued, it
may be issued by the corporation with the same effect as if the person were an
officer on the date of issue. All certificates shall include conspicuous
written notice of any restrictions which may be imposed on the transferability
of such shares.
Each certificate of stock shall state:
(a) that the corporation is organized under the laws of the
State of Delaware;
(b) the name of the person to whom issued; and
(c) the number and class of shares and the designation of
the series, if any, which such certificate represents.
(3) STOCK RECORDS: The stock transfer books shall be kept at the
principal place of business of the corporation or at the office of the transfer
agent or registrar of the corporation. The name and address of the person to
whom the shares represented thereby are issued, together with the class, number
of shares and date of issue, shall be entered on the stock transfer books of the
corporation.
(4) LEGENDS AND RESTRICTIONS ON TRANSFER: As long as the
corporation is authorized to issue more than one class of stock or more than one
series of any class, the powers, designations, preferences, and relative,
participating, optional, or other special rights of each class of stock or
series thereof and the qualifications, limitations, or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in
Section 202 of Title 8, General Corporation Law of Delaware, in lieu of the
foregoing requirements, there may be set forth on the face or back of the
certificate which the corporation shall issue to represent such class or series
of stock, a statement that the corporation will furnish without charge to each
stockholder who so requests the powers, designations, preferences, and relative,
participating, optional, or other special rights of each class of stock or
series thereof and the qualifications, limitations, or restrictions of such
preferences and/or rights.
Except to the extent that the corporation has obtained an opinion of
counsel acceptable to the corporation that transfer restrictions are not
required under applicable securities laws, all certificates representing shares
of the corporation shall bear a reference to the legend on the face and the
following legend on the reverse of the certificate:
"The securities evidenced by this certificate have not been
registered under the Securities Act of 1933 or any applicable
state law, and no interest therein may be sold, distributed,
assigned, offered, pledged, or otherwise transferred unless there
is an effective registration statement under such Act and
applicable state securities laws covering any such transaction
involving said securities or (b) this corporation receives an
opinion of legal counsel for the holder of these securities
(concurred in by legal counsel for this corporation) stating that
such transaction is exempt from registration or this corporation
otherwise satisfies itself that such transaction is exempt from
registration."
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(5) TRANSFERS: Transfers of stock shall be made only upon the
stock transfer books of the corporation pursuant to authorization or document of
transfer made by the holder of record thereof or by his or her legal
representative, who shall furnish proper evidence of authority to transfer, or
by his or her attorney-in-fact authorized by power of attorney duly executed and
filed with the Secretary of the corporation. All certificates surrendered to
the corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificates for a like number of shares shall have been
surrendered and canceled.
(6) REGISTERED OWNER: Registered stockholders shall be treated by
the corporation as the holders in fact of the stock standing in their respective
names and the corporation shall not be bound to recognize any equitable or other
claim to or interest in any share on the part of any other person, whether or
not it shall have express or other notice thereof, except as expressly provided
below or by the laws of the State of Delaware. The Board of Directors may adopt
by resolution a procedure whereby a stockholder of the corporation may certify
in writing to the corporation that all or a portion of the shares registered in
the name of such stockholder are held for the account of a specified person or
persons. The resolution shall set forth:
(a) The classification of stockholder who may certify;
(b) The purpose or purposes for which the certification may
be made;
(c) The form of certification and information to be
contained therein;
(d) If the certification is with respect to a record date
or closing of the stock transfer books, the date within
which the certification must be received by the
corporation; and
(e) Such other provisions with respect to the procedure as
are deemed necessary or desirable.
Upon receipt by the corporation of a certification complying with the
procedure, the persons specified in the certification shall be deemed, for the
purpose or purposes set forth in the certification, to be the holders of record
of the number of shares specified in place of the stockholder making the
certification.
(7) MUTILATED, LOST OR DESTROYED CERTIFICATES: In case of any
mutilation, loss or destruction of any certificate of stock, another may be
issued in its place upon proof of such mutilation, loss or destruction or
receipt of an affidavit of such fact. The Board of Directors may impose
conditions on such issuance and may require the giving of a satisfactory bond or
indemnity to the corporation in such sum as they might determine or establish
such other procedures as they deem necessary.
(8) FRACTIONAL SHARES OR SCRIP: The corporation may: (a) issue
fractions of a share which shall entitle the holder to exercise voting rights,
to receive dividends thereon, and to participate in any of the assets of the
corporation in the event of liquidation; (b) arrange for the disposition of
fractional interests by those entitled thereto; (c) pay in cash the fair value
of fractions of a share as of the time when those entitled to receive such
shares are determined; or (d) issue scrip in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip aggregating a full share.
ARTICLE III
BOARD OF DIRECTORS
(1) NUMBER AND POWERS: The management of all the affairs, property
and interests of the corporation shall be vested in a Board of Directors. The
Board of Directors shall initially consist of two (2) persons who shall be
elected for a term of one year, and shall hold office until their successors are
elected and
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qualified. Directors need not be stockholders or residents of the State of
Delaware. In addition to the powers and authorities expressly conferred upon
the Board of Directors by these Bylaws and the Certificate of Incorporation, the
Board may exercise all such powers of the corporation and do all such lawful
acts as are not by statute or by the Certificate of Incorporation or by these
Bylaws directed or required to be exercised or done by the stockholders.
(2) CHANGE OF NUMBER: Notwithstanding the power and authority of
the Board of Directors to amend these Bylaws, including, without limitation,
provisions relating to the number of directors, the number of directors may at
any time be increased or decreased by a vote of the majority of the voting stock
issued and outstanding, at any regular or special meeting of stockholders, if
the notice of such meeting contains a statement of the proposed increase or
decrease; and, in case of any such increase, the Board of Directors or the
stockholders at any regular or special meeting held before the Board of
Directors takes action, shall have power to elect such additional directors, to
hold office until the next annual meeting of the stockholders and until their
successors are elected and qualified.
(3) ELECTION AND TERM OF OFFICE: At each annual meeting of
stockholders, the stockholders shall elect directors. Directors may also be
elected at a special meeting of stockholders called specifically for that
purpose. Each director so elected shall hold office until the next annual
meeting of stockholders and until his successor shall have been elected and
qualified.
(4) NOMINATIONS FOR DIRECTORS:
(a) Nominations of candidates for election as directors at
an annual or special meeting of stockholders may only be made (i) by, or at the
direction of, the Board of Directors, or (ii) by any stockholder of the
corporation who is entitled to vote at the meeting and who complies with the
procedures set forth in the remainder of this Section (4).
(b) If a stockholder proposes to nominate one or more
candidates for election as directors at an annual or special meeting, the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation. To be timely, a stockholder's notice must be delivered to, or
mailed and received at, the principal office of the corporation not less than
seventy (70) days prior to the date scheduled for the meeting (regardless of any
postponements, deferrals or adjournments of that meeting to a later date), or,
if notice or public disclosure of the date scheduled for the meeting is not
given or made at least eighty (80) days prior thereto, not more than ten (10)
days following the day on which notice of the date scheduled for the meeting is
mailed or the day on which disclosure of that date is made, whichever is
earlier.
(c) A stockholder's notice to the Secretary under
subsection (b) hereof shall set forth, as to each person whom the stockholder
proposes to nominate for election as a director (i) the name, age, business
address and residence address of such person, (ii) the principal occupation or
employment of such person, (iii) the number and class of shares of stock of the
corporation that are beneficially owned on the date of such notice by such
person, and (iv) if the corporation at such time has any security registered
pursuant to Section 12 of the Exchange Act, any other information relating to
such person required to be disclosed in solicitations of proxies with respect to
nominees for election as directors pursuant to Regulation 14A under the Exchange
Act, including but not limited to information required to be disclosed by
Schedule 14A of Regulation 14A, and any other information that the stockholder
would be required to file with the Securities and Exchange Commission in
connection with the stockholder's nomination of such person as a candidate for
director or the stockholder's opposition to any candidate for director nominated
by, or at the direction of, the Board of Directors. In addition to the above
information, a stockholder's notice to the Secretary under subsection (b) hereof
shall (A) set forth (i) the name and address, as they appear on the
corporation's books, of the stockholder and of any other stockholders that the
stockholder knows or anticipates will support any candidate or candidates
nominated by the stockholder, and (ii) the number and class of shares of stock
of the corporation that are
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beneficially owned on the date of such notice by the stockholder and by any such
other stockholders, and (B) be accompanied by a written statement, signed and
acknowledged by each candidate nominated by the stockholder, that the candidate
agrees to be so nominated and to serve as a director of the corporation if
elected at the meeting.
(d) The Board of Directors, or a designated committee
thereof, may reject any stockholder's nomination of one or more candidates for
election as directors if the nomination is not made pursuant to a stockholder's
notice timely given in accordance with the terms of subsection (b) hereof. If
the Board of Directors, or a designated committee thereof, determines that the
information provided in a stockholder's notice does not satisfy the requirements
of subsection (c) hereof in any material respect, the Secretary of the
corporation shall notify the stockholder of the deficiency in the notice. The
stockholder shall have an opportunity to cure the deficiency by providing
additional information to the Secretary within such period of time, not to
exceed five (5) days from the date such deficiency notice is given to the
stockholder, as the Board of Directors or such committee shall reasonably
determine. If the deficiency is not cured within such period, or if the Board of
Directors or such committee determines that the additional information provided
by the stockholder, together with information previously provided, does not
satisfy the requirements of subsection (c) hereof in any material respect, then
the Board of Directors or such committee may reject the stockholder's notice.
(e) Notwithstanding the procedures set forth in
subsection (d) hereof, if a stockholder proposes to nominate one or more
candidates for election as directors at an annual or special meeting, and
neither the Board of Directors nor any committee thereof has made a prior
determination of whether the stockholder has complied with the procedures set
forth in this Section (4) in connection with such nomination, then the chairman
of the meeting shall determine and declare at the meeting whether the
stockholder has so complied. If the chairman determines that the stockholder has
so complied, then the chairman shall so state and ballots shall be provided for
use at the meeting with respect to such nomination. If the chairman determines
that the stockholder has not so complied, then, unless the chairman, in his sole
and absolute discretion, determines to waive such compliance, the chairman shall
state that the stockholder has not so complied and the defective nomination
shall be disregarded.
(5) VACANCIES: All vacancies in the Board of Directors, whether
caused by resignation, death or otherwise, may, except as otherwise provided in
the Certificate of Incorporation, be filled by the affirmative vote of a
majority of the remaining directors attending a regular or special meeting
called for that purpose, even though less than a quorum of the Board of
Directors be present, or by a sole remaining director, or by the stockholders at
any regular or special meeting held prior to the filling of such vacancies by
the Board of Directors as above provided. A director thus elected to fill any
vacancy shall hold office for the unexpired portion of the term of the director
whose place shall be vacant and until his successor is elected and qualified.
Any directorship to be filled by reason of an increase in the number of
directors may be filled by the Board of Directors for a term of office
continuing only until the next election of directors by the stockholders.
(6) RESIGNATION: Any director may resign at any time by delivering
written notice to the Chairman of the Board, the President, the Secretary, or
the Board, or to the registered office of the corporation in Delaware. Any such
resignation shall take effect at the time specified therein, or if the time is
not specified, upon delivery thereof and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
(7) REMOVAL OF DIRECTORS: At a meeting of stockholders called
expressly for that purpose, subject to any limitations imposed by law or the
Certificate of Incorporation, the entire Board of Directors, or any member
thereof, may be removed by a vote of the holders of a majority of shares then
entitled to vote at an election of such directors. However, if any stockholders
have the right to cumulate their votes in the election of certain directors, if
less than the entire Board is to be removed, no such director may be removed
without cause if the votes cast against his or her removal would be sufficient
to elect him or her if then cumulatively voted at
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an election of the entire Board, or, if there be classes of directors, at an
election of the class of directors of which he or she is a part.
(8) REGULAR MEETINGS: Regular meetings of the Board of Directors
or any committee may be held without notice at the principal office of the
corporation or at such other place or places, either within or without the State
of Delaware, as the Board of Directors or such committee, as the case may be,
may from time to time designate. The annual meeting of the Board of Directors
shall be held without notice immediately after the adjournment of the annual
meeting of stockholders.
(9) SPECIAL MEETINGS:
(a) Special meetings of the Board of Directors may be
called at any time by the Chairman of the Board, the President, the Secretary,
or by any one or more directors, to be held at the principal office of the
corporation or at such other place or places as the Board of Directors or the
person or persons calling such meeting may from time to time designate. Written
notice of the time and place of all special meetings of the Board of Directors
shall be given at least one (1) day before the date of the meeting.
(b) Special meetings of any committee may be called at any
time by such person or persons and with such notice as shall be specified for
such committee by the Board of Directors, or in the absence of such
specification, in the manner and with the notice required for special meetings
of the Board of Directors.
(10) QUORUM:
(a) Except as provided in subsection (b) hereof or in the
Certificate of Incorporation, a majority of the whole Board of Directors shall
be necessary at all meetings to constitute a quorum for the transaction of
business, but, if less than a majority are present at a meeting, a majority of
the directors present may adjourn the meeting from time to time without further
notice.
(b) At each meeting of the Board at which a quorum is
present, the act of a majority of the directors present at the meeting shall be
the act of the Board of Directors, unless the vote of a greater number is
required by these Bylaws, the Certificate of Incorporation, or the General
Corporation Law of Delaware.
(c) Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes a contract or transaction between the
corporation and one or more of its directors or officers, or between the
corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest.
(11) WAIVER OF NOTICE: Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director attends
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Whenever any notice is required to be given to any director under the
provisions of these Bylaws, the Certificate of Incorporation, or the General
Corporation Law of Delaware, a waiver of notice signed by the director or
directors entitled to such notice, whether before or after the time stated for
the meeting, shall be equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors or any committee appointed by the Board need be
specified in the waiver of notice of such meeting.
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(12) REGISTERING DISSENT: A director who is present at a meeting of
the Board of Directors at which action on a corporate matter is taken shall be
presumed to have assented to such action unless his or her dissent shall be
entered in the minutes of the meeting, or unless he or she shall file his or her
written dissent to such action with the person acting as the secretary of the
meeting, before the adjournment thereof, or shall forward such dissent by
registered mail to the Secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
(13) EXECUTIVE AND OTHER COMMITTEES: The Board of Directors, by
resolution adopted by a majority of the full Board of Directors, may designate
from among its members an Executive Committee and one or more other standing or
special committees. The Executive Committee shall have and may exercise all the
authority of the Board of Directors, and other standing or special committees
may be invested with such powers, subject to such conditions, as the Board of
Directors shall see fit; PROVIDED THAT, notwithstanding the above, no committee
of the Board of Directors shall have the authority to amend the Certificate of
Incorporation (except that a committee may, to the extent authorized in the
resolution or resolutions providing for the issuance of shares of stock adopted
by the Board of Directors as provided in the Certificate of Incorporation and by
law, fix the designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), adopt an agreement of merger or consolidation under Section 251 or
252 of the General Corporation Law of Delaware, recommend to the stockholders
the sale, lease, or exchange of all or substantially all of the corporation's
property and assets, recommend to the stockholders a dissolution of the
corporation or a revocation of a dissolution, amend the Bylaws of the
corporation, declare a dividend, authorize the issuance of stock, or adopt a
certificate of ownership and merger pursuant to Section 253 of the General
Corporation Law of Delaware. All committees so appointed shall keep regular
minutes of their meetings and shall cause them to be recorded in books kept for
that purpose in the office of the corporation and shall report the same to the
Board of Directors at its next meeting. The designation of any such committee
and the delegation of authority thereto shall not relieve the Board of
Directors, or any member thereof, of any responsibility imposed by law.
(14) REMUNERATION: By resolution of the Board of Directors, a fixed
sum and attendance fee, together with expenses of attendance, if any, may be
allowed the directors who are not salaried by the corporation for their services
and for attendance at each regular or special meeting of such Board; provided,
that nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of standing or special committees may be allowed like
compensation for attending committee meetings.
(15) LOANS AND GUARANTEES: The corporation may lend money to, or
guarantee any obligation of, or otherwise assist any officer or other employee
of the corporation or of its subsidiary, including any officer or employee who
is a director of the corporation or of its subsidiary, whenever, in the judgment
of the directors, such loan, guaranty, or assistance may reasonably be expected
to benefit the corporation. The loan, guaranty, or other assistance may be with
or without interest, and may be unsecured or secured in such manner as the Board
of Directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation.
(16) ACTION BY DIRECTORS WITHOUT A MEETING: Any action required or
permitted to be taken at a meeting of the directors, or of a committee thereof,
may be taken without a meeting if a consent in writing, setting forth the action
so taken or to be taken, shall be signed by all of the directors, or all of the
members of the committee, as the case may be, and filed with the minutes of the
proceedings of such board or committee. Such consent shall have the same effect
as a unanimous vote.
(17) ACTION OF DIRECTORS BY COMMUNICATIONS EQUIPMENT: Any action
required or which may be taken at a meeting of directors, or of a committee
thereof, may be taken by means of a conference telephone
11
<PAGE>
or similar communications equipment by means of which all persons participating
in the meeting can hear each other at the same time. Participation by such
means shall constitute presence in person at a meeting.
ARTICLE IV
OFFICERS
(1) DESIGNATIONS: The officers of the corporation shall be a
Chairman of the Board, a President, one or more Vice-Presidents (one or more of
whom may be Executive Vice-Presidents), a Secretary and a Chief Financial
Officer or Treasurer, and such Assistant Secretaries, Assistant Treasurers and
other officers and agents as the Board may designate, who shall be elected for
one year by the directors at their first meeting after the annual meeting of
stockholders, and who shall hold office until their successors are elected and
qualified. Any two or more offices may be held by the same person.
(2) THE CHAIRMAN OF THE BOARD: The Chairman of the Board (if such
an officer be appointed) shall be a director and shall perform such duties as
shall be assigned to him or her by the Board of Directors and in any employment
agreement. The Chairman shall be the chief executive officer of the corporation
and, subject to the control of the Board and the Executive Committee (if one be
established), shall supervise and control all of the assets, business, and
affairs of the corporation. The Chairman shall preside at all meetings of the
stockholders and at all meetings of the Board. The Chairman may sign
certificates for shares of the corporation, deeds, mortgages, bonds, contracts,
or other instruments, except when the signing and execution thereof have been
expressly delegated by the Board or by these Bylaws to some other officer or
agent of the corporation or are otherwise required by law to be signed or
executed by some other officer or in some other manner. If there is no
President or if the President dies or becomes unable to act, the Chairman shall
also serve as the Chief Executive Officer and shall perform the duties of the
President, except as may be limited by resolution of the Board of Directors,
with all the powers of and subject to all the restrictions upon the President.
(3) THE PRESIDENT: The President shall be the chief operating
officer of the corporation, and, if no Chairman of the Board has been appointed,
shall also be the chief executive officer of the corporation and a director.
The President may sign deeds, mortgages, bonds, contracts, or other instruments,
except when the signing and execution thereof have been expressly delegated by
the Board or by these Bylaws to some other officer or agent of the corporation
or are otherwise required by law to be signed or executed by some other officer
or in some other manner. The President shall vote the shares owned by the
corporation in other corporations, domestic or foreign, unless otherwise
prescribed by law or resolution of the Board. In general, the President shall
perform all such duties as shall be assigned to him or her by the Board and in
any employment agreement, subject at all times, however, to the direction and
supervision of the Board of Directors. In the absence of the Chairman of the
Board, the President, if a director, shall preside over all meetings of the
stockholders and over all meetings of the Board of Directors. The President
shall have the authority to appoint one or more Assistant Secretaries and
Assistant Treasurers, as he or she deems necessary.
(4) THE VICE PRESIDENTS: If no Chairman of the Board has been
appointed, in the absence or disability of the President, the Vice Presidents,
if any, in order of their rank as fixed by the Board of Directors or, if not
ranked, a Vice President designated by the Board shall perform all the duties of
the President and when so acting shall have all the powers of, and be subject to
all the restrictions upon, the President; provided that no such Vice President
shall assume the authority to preside as Chairman of meetings of the Board
unless such Vice President is a member of the Board. The Vice Presidents shall
have such other powers and perform such other duties as from time to time may be
respectively prescribed for them by the Board, these Bylaws, the President, or
the Chairman of the Board (if one be appointed).
(5) THE SECRETARY: The Secretary shall:
12
<PAGE>
(a) have responsibility for preparing minutes of meetings
of the stockholders and the Board of Directors and for authenticating records of
the corporation;
(b) see that all notices (except as otherwise provided in
these Bylaws) are duly given in accordance with the provisions of these Bylaws
and as required by law;
(c) be custodian of the corporate records and seal of the
corporation, if one be adopted;
(d) keep a register of the post office address of each
stockholder and director;
(e) sign certificates for shares of the corporation;
(f) have general charge of the stock transfer books of the
corporation;
(g) when required by law or authorized by resolution of the
Board of Directors, sign with the President, or other officer authorized by the
President or the Board, deeds, mortgages, bonds, contracts, or other
instruments; and
(h) in general, perform all duties incident to the office
of Secretary and such other duties as from time to time may be assigned by the
President or the Board of Directors.
In the absence of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
(6) THE CHIEF FINANCIAL OFFICER OR TREASURER: If required by the
Board of Directors, the Chief Financial Officer or Treasurer shall give a bond
for the faithful discharge of his duties in such sum and with such surety or
sureties as the Board shall determine. The Chief Financial Officer or Treasurer
shall:
(a) have charge and custody of and be responsible for all
funds and securities of the corporation;
(b) receive and give receipts for moneys due and payable to
the corporation from any source whatsoever and deposit all such moneys in the
name of the corporation in banks, trust companies, or other depositories
selected in accordance with the provisions of these Bylaws; and
(c) in general, perform all of the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
by the President or the Board of Directors.
In the absence of the Chief Financial Officer or Treasurer, an Assistant
Treasurer may perform the duties of the Chief Financial Officer or Treasurer.
(7) DELEGATION: In the case of absence or inability to act of any
officer of the corporation and of any person herein authorized to act in his
place, the Board of Directors may from time to time delegate the powers or
duties of such officer to any other officer or any director or other person whom
it may select.
(8) OTHER OFFICERS AND AGENTS: One or more Vice Presidents and
such other officers and assistant officers as may be deemed necessary or
advisable may be appointed by the Board of Directors or, to the extent provided
in Section (3) hereof, by the President. Such other officers and assistant
officers shall hold office for such periods, have such authorities, and perform
such duties as are provided in these Bylaws or as may be provided by resolution
of the Board. Any officer may be assigned by the Board any additional title
that the
13
<PAGE>
Board deems appropriate. The Board may delegate to any officer or agent the
power to appoint any such assistant officers or agents and to prescribe their
respective terms of office, authorities, and duties.
(9) VACANCIES: Vacancies in any office arising from any cause may
be filled by the Board of Directors at any regular or special meeting of the
Board. The appointee shall hold office for the unexpired term and until his
successor is duly selected and qualified.
(10) RESIGNATION: Any officer may resign at any time by delivering
written notice to the Chairman of the Board, the President, the Secretary, or
the Board of Directors. Any such resignation shall take effect at the time
specified therein, or if the time is not specified, upon delivery thereof and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.
(11) TERM AND REMOVAL: The officers of the corporation shall hold
office until their successors are appointed and qualified. Any officer or agent
may be removed by the Board with or without cause. An officer empowered to
appoint another officer or assistant officer also has the power to remove any
officer he or she would have the power to appoint whenever in his or her
judgment the best interests of the corporation would be served thereby. The
removal of an officer or agent shall be without prejudice to the contract
rights, if any, of the corporation or the person so removed. Appointment of an
officer or agent shall not of itself create contract rights.
(12) BONDS: The Board of Directors may, by resolution, require any
and all of the officers to give bonds to the corporation, with sufficient surety
or sureties, conditioned for the faithful performance of the duties of their
respective offices, and to comply with such other conditions as may from time to
time be required by the Board of Directors.
(13) SALARIES: The salaries of all officers and agents of the
corporation shall be fixed from time to time by the Board of Directors or by any
person or persons to whom the Board has delegated such authority. No officer
shall be prevented from receiving such salary by reason of the fact that such
officer is also a director of the corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
(1) The Board of Directors may authorize any officer or officers,
agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, except where
otherwise provided by law or these Bylaws. Such authority may be general or
confined to specific instances.
(2) No loans shall be contracted on behalf of the corporation and
no evidences of indebtedness shall be issued in its name unless authorized or
ratified by a resolution of the Board. Such authority may be general or
confined to specific instances. The corporation may lend money to, or guarantee
any obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty, or assistance may reasonably be expected to
benefit the corporation.
(3) All checks, drafts, or other orders for the payment of money,
notes, or other evidences of indebtedness issued in the name of the corporation
shall be signed by such officer or officers, or agent or agents, of the
corporation and in such manner as is from time to time determined by resolution
of the Board.
14
<PAGE>
(4) All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies, or other depositories as the Board may elect.
(5) No contract or transaction between the corporation and one or
more of its directors or officers, or between the corporation and any other
corporation, partnership, association, or other organization in which one or
more of its directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the director or officer is present at or participates in the meeting of the
Board of Directors or committee thereof which authorizes the contract or
transaction, or solely because his or her or their votes are counted for such
purpose, if:
(a) The material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum; or
(b) The material facts as to his or her relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(c) The contract or transaction is fair as to the
corporation as of the time it is authorized, approved, or ratified, by the Board
of Directors, a committee thereof, or the stockholders.
ARTICLE VI
DIVIDENDS AND FINANCE
(1) DIVIDENDS: Dividends may be declared by the Board of Directors
and paid out of the annual net profits of the corporation, or out of its net
assets in excess of its capital, subject to the conditions and limitations
imposed by the Certificate of Incorporation and the laws of the State of
Delaware.
(2) RESERVES: Before making any distribution of profits, there may
be set aside out of the net profits of the corporation such sum or sums as the
directors from time to time in their absolute discretion deem expedient as a
reserve fund to meet contingencies, or for equalizing dividends, or for
maintaining any property of the corporation, or for any other purposes. Any
profits of any year not distributed as dividends shall be deemed to have been
thus set apart until otherwise disposed of by the Board of Directors.
(3) DEPOSITORIES: The moneys of the corporation shall be deposited
in the name of the corporation in such bank or banks or trust company or trust
companies as the Board of Directors shall designate, and shall be drawn out only
by instrument signed by such persons and in such manner as may be determined by
resolution of the Board of Directors.
ARTICLE VII
NOTICES
(1) Whenever, under any provisions of these Bylaws, notice is
required to be given to any stockholder, unless provided otherwise in these
Bylaws, it shall be given in writing, timely and duly deposited in the United
States mail, postage prepaid, and addressed to his last known post office
address as shown by the stock record of the corporation or its transfer agent.
15
<PAGE>
(2) Any notice required to be given to any director may be given by
the method stated in Section (1) hereof, or by facsimile, telex or telegram,
except that such notice other than one which is delivered personally shall be
sent to such address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known post office
address of such director.
(3) If no address of a stockholder or director be known, notice may
be sent to the principal place of business of the corporation.
(4) An affidavit of mailing, executed by a duly authorized and
competent employee of the corporation or its transfer agent appointed with
respect to the class of stock affected, specifying the name and address or the
names and addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given, and the time
and method of giving the same, shall be conclusive evidence of the statements
therein contained.
(5) All notices given by mail, as above provided, shall be deemed
to have been given as at the time of mailing and all notices given by facsimile,
telex or telegram shall be deemed to have been given as of the sending time
recorded at time of transmission.
(6) It shall not be necessary that the same method of giving notice
be employed in respect of all directors, but one permissible method may be
employed in respect of any one or more, and any other permissible method or
methods may be employed in respect of any other or others.
(7) The period or limitation of time within which any stockholder
may exercise any option or right, or enjoy any privilege or benefit, or be
required to act, or within which any director may exercise any power or right,
or enjoy any privilege, pursuant to any notice sent him in the manner above
provided, shall not be affected or extended in any manner by the failure of such
stockholder or such director to receive such notice.
(8) Whenever notice is required to be given, under any provision of
law or of the Certificate of Incorporation or Bylaws of the corporation, to any
person with whom communication is unlawful, the giving of such notice to such
person shall not be required and there shall be no duty to apply to any
governmental authority or agency for a license or permit to give such notice to
such person. Any action or meeting which shall be taken or held without notice
to any such person with whom communication is unlawful shall have the same force
and effect as if such notice had been duly given. In the event that the action
taken by the corporation is such as to require the filing of a certificate under
any provision of the General Corporation Law of Delaware, the certificate shall
state, if such is the fact and if notice is required, that notice was given to
all persons entitled to receive notice except such persons with whom
communication is unlawful.
(9) Whenever notice is required to be given, under any provision of
law or the Certificate of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings, and all
notices of meetings or of the taking of action by written consent without a
meeting to such person during the period between such two consecutive annual
meetings, or (ii) all, and at least two, payments (if sent by first class mail)
of dividends or interest on securities during a twelve month period, have been
mailed addressed to such person at his address as shown on the records of the
corporation and have been returned undeliverable, the giving of such notice to
such person shall not be required. Any action or meeting which shall be taken
or held without notice to such person shall have the same force and effect as if
such notice had been duly given. If any such person shall deliver to the
corporation a written notice setting forth his then current address, the
requirement that notice be given to such person shall be reinstated. In the
event that the action taken by the corporation is such as to require the filing
of a certificate under any provision of the General Corporation Law of Delaware,
the certificate need not state that notice was not given to persons to whom
notice was not required to be given pursuant to this paragraph.
16
<PAGE>
ARTICLE VIII
SEAL
The corporate seal of the corporation shall be in such form and bear
such inscription as may be adopted by resolution of the Board of Directors, or
by usage of the officers on behalf of the corporation. Said seal may be used by
causing it or a facsimile thereof to be impressed, affixed or reproduced.
ARTICLE IX
INDEMNIFICATION OF OFFICERS, DIRECTORS,
EMPLOYEES AND AGENTS
(1) The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or proceeding if he
or she acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner in which he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that his
or her conduct was unlawful.
(2) The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection with the defense or settlement of such action, suit or
proceeding if he or she acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his or her duty to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action, suit or proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
(3) To the extent that a director, officer, employee or agent of
the corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Sections (1) and (2) hereof, or in
defense of any claim, issue or matter therein, he or she shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him or her in connection therewith.
(4) Any indemnification under Sections (1) or (2) hereof (unless
ordered by a court) shall be made by the corporation only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he or she has
met the applicable
17
<PAGE>
standard of conduct set forth in Sections (1) or (2) hereof. Such determination
shall be made (a) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or proceeding,
or (b) if such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (c) by the stockholders.
(5) Expenses (including attorneys' fees) incurred by an officer or
director in defending a civil or criminal action, suit or proceeding may be paid
by the corporation in advance of the final disposition of such action, suit or
proceeding as authorized in the manner provided in Section (4) hereof upon
receipt of an undertaking by or on behalf of such officer or director to repay
such amount if it should be ultimately determined that such person is not
entitled to be indemnified by the corporation as authorized in this Article or
otherwise. Such expenses incurred by other employees and agents shall be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
(6) The indemnification and advancement of expenses provided by or
granted pursuant to the other Sections of this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors, or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. The indemnification powers of
the corporation shall be as broad as is allowed under applicable law.
(7) Upon the majority vote of a quorum of the Board of Directors,
the corporation may purchase and maintain insurance on behalf of any person who
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director, officer, trustee,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him or her and incurred
by him or her in any such capacity, or arising out of his or her status as such,
whether or not the corporation shall have indemnified him or her against such
liability under the provisions of this Article.
ARTICLE X
BOOKS AND RECORDS
The corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its stockholders and Board
of Directors, and shall keep at its registered office or principal place of
business, or at the office of its transfer agent or registrar, a record of its
stockholders, giving the names and addresses of all stockholders and the number
and class of the shares held by each. Any books, records, and minutes may be in
written form or any other form capable of being converted into written form
within a reasonable time.
ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed by the affirmative
vote of a majority of the voting stock issued and outstanding at any regular or
special meeting of the stockholders. The Board of Directors shall have power to
make, alter, amend and repeal the Bylaws of this corporation, unless the
stockholders in adopting, amending or repealing a particular Bylaw have provided
expressly that the Board of Directors may not amend or repeal that Bylaw. Any
such Bylaws made or adopted by the Board of Directors, or any alteration,
amendment or repeal of the Bylaws by the Board of Directors, may be changed or
repealed by the holders of a majority of the stock entitled to vote at any
stockholders' meeting.
18
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