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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
SEPTEMBER 22, 1999
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Date of Report (Date of earliest event reported)
eVENTURES GROUP, INC.
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(Exact name of registrant as specified in its charter)
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DELAWARE 33-19435 75-2233445
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
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ONE EVERTRUST PLAZA, 8TH FLOOR, JERSEY CITY, NEW JERSEY 07302
(Address of principal executive offices) (Zip Code)
201-200-5515
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(Registrant's telephone number, including area code)
ADINA, INC., 6959 ARAPAHO ROAD, SUITE 122, DALLAS, TEXAS 75248
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 1. CHANGE IN CONTROL OF REGISTRANT
On September 22, 1999, our company, eVentures Group, Inc. (formerly
known as Adina, Inc.), consummated the acquisition of all of the outstanding
shares of AxisTel Communications, Inc., ("AxisTel"), approximately two-thirds of
the outstanding shares of e.Volve Technology Group, Inc., ("e.Volve"), and
approximately 17% of the outstanding shares of i2v2.com, Inc. ("i2v2.com")
pursuant to the terms of an Agreement and Plan of Reorganization dated September
22, 1999 (the "Reorganization Agreement"). At the closing under the
Reorganization Agreement, the following events occurred:
o Mick Y. Wettreich ("Wettreich") sold 8.5 million shares of our common
stock owned by him to participants in the reorganization.
o IEO Investments Limited ("IEOIL"), Infinity Emerging Subsidiary
Limited ("IESL") and Infinity Investors Limited ("IIL") purchased an
aggregate of 8.225 million of the 8.5 million shares of common stock
sold by Wettreich pursuant to the Reorganization Agreement.
o IEO Holdings Limited ("IEOH") was merged into one of our subsidiaries
formed to acquire IEOH. As a result of the merger, the two
shareholders of IEOH (IEOIL and IESL) received an aggregate of
14,562,193 shares of our common stock. Immediately prior to the
reorganization, IEOH owned a one-third equity interest plus warrants
and debentures in e.Volve, a 50% equity interest in AxisTel (prior to
the exercise of management options) and an approximate seventeen
percent (17%) equity interest in i2v2.com.
o The remaining shareholders of AxisTel contributed to us their stock in
AxisTel in exchange for 6,381,000 shares of common stock. The
principal shareholders of AxisTel (Samuel L. Litwin, Mitchell A.
Arthur and Michael Fiscus) each received 2 million shares of our
common stock in the reorganization in exchange for their respective
approximate one-sixth ownership interests in AxisTel (prior to the
exercise of management options). Immediately prior to the
reorganization, some employees of AxisTel elected to exercise their
options to acquire shares in AxisTel, which were exchanged for an
aggregate of 381,000 shares of our common stock in the reorganization.
o IIL contributed to us a one-third equity interest plus warrants and
debentures in e.Volve in exchange for 5,682,807 shares of our common
stock.
IEOIL, IESL and IIL (collectively, the "Infinity Entities") are
investment funds whose assets are managed by HW Capital, L.P. and HW Partners,
L.P., affiliates of the Lamar Hunt family of Dallas, Texas. Immediately prior to
the reorganization, Wettreich owned 10,145,830 shares of the 10,330,610 shares
of our common stock outstanding and was our controlling shareholder. Following
the reorganization and prior to the private placement of our common or preferred
stock as contemplated by the Reorganization Agreement, the Infinity Entities
owned 28.5 million of the approximate 37 million shares of our common stock
outstanding, or approximately 77% of our outstanding shares.
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Upon the consummation of the reorganization, Daniel Wettreich resigned
as our sole director and appointed the following five (5) persons to serve on
our board of directors:
Fred A. Vierra, 67, is our Chairman of the Board. He was Chief
Executive Officer of Tele-Communications International, Inc., the international
arm of Tele-Communications, Inc. ("TCI"), from 1994 to 1997. He was also Vice
Chairman of the Board of Directors until November 1998. Prior to joining TCI,
Mr. Vierra was President and Chief Operating Officer of United Artists
Entertainment Company ("UAEC"), where he was in charge of all day-to-day
operations and ongoing strategies for the corporation. In this position, Mr.
Vierra also directed the activities of both UAEC's cable television and theater
division presidents. He also served as President of United Cable Television
Corporation, which was merged into UAEC in 1989. Mr. Vierra began his career in
the cable industry as Executive Vice President, Investment Banking, for Daniels
& Associates, the leading financial services company for the cable industry. Mr.
Vierra has served on the Boards of Turner Broadcasting, Discovery Channel,
Princes Holdings Ltd., Australas Media Ltd., Torneos y Competencias S.A.,
Tele-Communications International, Inc., and Telewest plc. Currently, Mr. Vierra
is Chairman of the Board of VeloCom Inc. and a Board member of Flextech plc,
Formus Communications, Inc., and Jones International Networks, Ltd.
Clark K. Hunt, 34, is a manager of HW Capital, L.P. and related
investment advisory companies. Prior to co-founding these entities, Mr. Hunt was
an analyst at Goldman, Sachs & Co. in New York and Los Angeles. At Goldman
Sachs, he participated in financing transactions with an aggregate value in
excess of $1 billion. These transactions included mergers, acquisitions, initial
public offerings, cross-currency swaps and leveraged buy-outs. Mr. Hunt attended
Southern Methodist University, where he graduated first in his class with a
Bachelor of Business Administration and was a two-time recipient of the
University's highest academic award, the Provost Award for Outstanding Scholar.
Since returning to Dallas, Mr. Hunt has built a money-management firm that
oversees and actively manages assets for a diverse clientele.
Barrett N. Wissman, 37, is a manager of HW Partners, L.P., HW Capital,
L.P. and related investment advisory companies. Prior to co-founding these
entities, Mr. Wissman served as Chief Executive Officer of Athena Products
Corporation, a manufacturer and marketer of chemicals, fertilizers and household
consumer products and its subsidiaries and affiliates (collectively, "The Athena
Group") and oversaw all aspects of Athena's operations, including
administration, finance, marketing and production. Mr. Wissman ultimately
orchestrated the sale of the assets of The Athena Group, including the licensing
of several of Athena's manufacturing processes and trademarks. From 1985 to 1987
Mr. Wissman was an analyst at Lazard Freres & Co., L.L.C. in the areas of
international mergers and acquisitions and international project finance. Mr.
Wissman holds Bachelor of Arts degrees, cum laude, in economics and political
science from Yale University and a Master of Arts degree in music from Southern
Methodist University.
Mark R. Graham, 41, has been a private investor based in Philadelphia,
Pennsylvania since 1997. Mr. Graham co-founded Drake Goodwin & Graham, a private
equity investment firm, in 1992 and served as a director until 1997. Prior to
co-founding Drake Goodwin & Graham, Mr. Graham was employed with Morgan Stanley
in its Mergers & Acquisitions department, serving as an associate and thereafter
as a Vice President from 1987 to 1992. Mr.
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Graham served as an associate with E.F. Hutton LBO Inc., the leveraged buyout
group of E.F. Hutton & Co. from 1984 to 1987. From 1983 to 1984, Mr. Graham was
an associate attorney with Bracewell & Patterson, Houston, Texas. Mr. Graham
received a Bachelor of Arts in History cum laude from the University of Michigan
and a Juris Doctor degree from Georgetown University Law Center.
Olaf Guerrand-Hermes, 35, has been investing privately in Europe and in
the United States since the early 1990s. He is a Managing Partner at Blue Growth
Capital, LLC, an investment partnership. Prior to organizing Blue Growth
Capital, Mr. Guerrand-Hermes was Managing Director of International Equities at
The Athena Group, a private international investment management company. At The
Athena Group, Mr. Guerrand-Hermes was primarily responsible for international
projects as well as raising equity capital for proposed investments. Prior to
joining The Athena Group, Mr. Guerrand-Hermes was Vice President at Nomura
Securities International, Inc., specializing in structured finance products such
as commercial mortgage backed securities. In addition to his experience in the
field of finance, Mr. Guerrand-Hermes was an associate with Sullivan & Cromwell,
a New York law firm, where he was involved in a variety of international
transactions, including public offerings and private placements in the United
States by European and other foreign companies and governments. Mr.
Guerrand-Hermes is a member of the New York bar, a graduate of New York
University School of Law and holds two masters from the University of
PanthTon-Assas (Paris II) in Paris, France. Mr. Guerrand-Hermes is a member of
the board of directors of various companies including HermFsSelier.
Upon the consummation of the reorganization, Daniel Wettreich also
resigned as our president, and the following persons were appointed as our
officers:
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Fred Vierra - Chairman of the Board
Barrett Wissman - President and Chief Executive Officer
Stuart Chasanoff - Vice President of Business Development, General
Counsel and Secretary
John Stevens Robling, Jr. - Vice President and Chief Financial Officer
Samuel Litwin - Managing Director of Communications Holdings
Mitchell Arthur - Managing Director of Communications Holdings
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ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
Pursuant to the Reorganization Agreement, we acquired all of the
outstanding shares of AxisTel, approximately two-thirds of the outstanding
shares of e.Volve, and approximately 17% of the outstanding shares of i2v2.com.
We acquired these assets and businesses in the transactions described in Item 1.
We issued an aggregate of 26,626,000 shares of our common stock to acquire these
assets from the persons identified in Item 1. Prior to the reorganization, the
Infinity Entities (through IEOH and IIL) collectively held approximately 67% of
the shares plus warrants and debentures in e.Volve and 50% of the shares (prior
to the exercise of management options) in AxisTel, and may be viewed as having
controlled both e.Volve and AxisTel. However, each person's participation in the
reorganization was voluntary. We determined the number of shares to be issued to
each participant in the reorganization after consideration of the relative
values of each of the entities involved and arm's-length negotiations with the
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shareholders of e.Volve and AxisTel (other than the Infinity Entities). We
believe that we have reached an understanding with the minority shareholders of
e.Volve to acquire the remaining one-third interest of e.Volve for approximately
5.9 million shares of our common stock, although this acquisition has not been
consummated.
Following the reorganization, our operating businesses will consist of
AxisTel and e.Volve. Both of these businesses have built and are expanding
"Next-Generation" communications networks that use ATM (Asynochronous Transfer
Mode) and IP (Internet Protocol) technology to transmit voice, data and video
over the same transmission lines.
AxisTel. AxisTel is a leading next-generation communications
company focused on the transmission of packetized voice, video and data
over IP and ATM networks. AxisTel not only markets its products to
international wholesale carriers, but also to retail consumers and
business customers worldwide. Recently, AxisTel has focused its
energies on developing IP-based networks in emerging markets such as
Latin America, the Middle East and Asia.
e.Volve. e.Volve is an emerging facilities-based
communications company building an international IP and ATM network
capable of compressing voice, video and data transmissions at rates of
up to 8 times greater than more conventional methods. e.Volve's
technology focuses on the convergence of the transmission of voice,
video and data over the public Internet and private Intranets.
In addition to our operating businesses, we intend to make strategic,
early stage investments in start-up companies that are developing Internet-based
businesses that are positioned to take advantage of next-generation networks and
services and the growth of the Internet as a medium for communications, commerce
and the provision of information. In making these investments, we intend to
provide (in addition to capital) operational assistance and strategic
partnerships, primarily from our personnel and operating companies. Our first
venture capital investment is in i2v2.com.
i2v2.com (also known as PhoneFree) develops and markets an Internet
telephony product and web site called "PhoneFree." The PhoneFree software, which
can be downloaded from the web site, allows users to conduct "real-time" duplex
voice conversations over the Internet. This software functions with normal
multimedia PC (personal computer) hardware over existing Internet networks.
Calls are free, regardless of their duration and destination. Additional
features such as video conferencing, teleconferencing, picture and file sharing,
voice mail, caller ID, call blocking, white boarding and group text chat, make
this innovative technology attractive to consumers. Although as a minority
shareholder of i2v2.com we will not have direct operational control over its
activities, we expect to be actively involved in its strategic plans.
INVESTOR CONSIDERATIONS
Investors considering acquiring shares of our common stock should
consider carefully risks associated with our forward-looking statements, as well
as the following investment considerations. Any of the following risks, as well
as other risks and uncertainties that are not yet identified or that we
currently believe are immaterial, could harm our business, financial
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condition and operating results, could cause the trading price of our common
stock to decline and could result in the complete loss of any investment.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
We have made forward-looking statements in this Report that are subject
to risks and uncertainties. These statements generally include the words
"believe," "expect," "anticipate," "intend," "estimate" or similar expressions.
These statements reflect our current views with respect to future events that
are subject to certain risks, uncertainties and assumptions, including without
limitation any statements regarding the following: market opportunities,
strategies, competition, expected activities, additional financing, strategic
alliances and projected expenditures. If one or more of these risks or
uncertainties materialize, or should our assumptions prove incorrect, actual
results may vary materially from those described in this Report. We cannot
assure our investors that the anticipated results will occur, that these
judgments or assumptions will prove correct or that unforeseen developments will
not occur.
WE HAVE A LIMITED OPERATING HISTORY
Although we have been in existence for a number of years, we have had
no material assets or operations, except for the interests in AxisTel, e.Volve
and i2v2.com obtained in the reorganization. In addition, AxisTel, e.Volve and
i2v2.com were each recently formed and have limited operating histories.
OUR ACQUIRED BUSINESSES HAVE INCURRED HISTORICAL LOSSES AND MAY NOT
HAVE ANY FUTURE PROFITS
AxisTel, e.Volve and i2v2.com have incurred and may continue to incur
operating losses and negative EBITDA (earnings before interest, taxes,
depreciation and amortization) while they expand and build their customer base.
As start-up companies, these companies will continue to incur significant
increases in expenses. These increases may adversely impact our business and
their financial condition.
OUR MARKET IS RAPIDLY EVOLVING
The market for Internet-based products and services has only recently
begun to develop. This market is rapidly evolving and is speculative in nature.
Our market is typical for a new and rapidly evolving industry, and demand and
market acceptance for our services are subject to a high level of uncertainty
and risk. Our business prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in the new and
rapidly evolving market for Internet-based products and services. Some of the
risks include our ability to design, build, operate and expand our communication
networks; create awareness of our brand, products and services; obtain strategic
relationships and alliances; effectively compete with existing and unforeseen
competitors; and develop products and services to meet the evolving needs of our
customers.
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WE HAVE AN UNPROVEN BUSINESS MODEL
We are unable to predict the extent of demand for our services. Our
ability to generate revenues also depends somewhat upon whether we can establish
strategic relationships with telecommunications carriers or systems integrators
to provide us with an adequate revenue stream. If we cannot achieve or sustain
an adequate revenue stream or if our services do not achieve or sustain broad
market acceptance, our business, operating results and financial condition will
be materially adversely affected. Our ability to generate future revenues
depends on a number of factors, many of which are beyond our control, including
among other things, the risk factors described in this Report. Therefore, we are
unable to forecast our revenues with any degree of accuracy.
WE MAY HAVE FUTURE CAPITAL NEEDS AND MAY NOT BE ABLE TO OBTAIN SUITABLE
FINANCING
We anticipate exhausting our existing cash resources within six months
for capital expenditures and working capital purposes. Due to our limited
operating history and the nature of the Internet industry, our future capital
needs are difficult to predict. We may require additional capital to fund any of
the following:
o advertising, maintenance and expansion;
o sales, marketing, research and development;
o unanticipated opportunities;
o operating losses from changing business conditions;
o operating losses from unanticipated competitive pressures;
o new venture capital investments; and
o strategic alliances.
We cannot assure our investors that adequate levels of additional
financing will be available at all or on acceptable terms. Any additional
financing could result in significant dilution to our existing stockholders. If
we are unable to raise additional capital, our growth and development could be
impeded. If we do not have sufficient capital, we may not be able to take
advantage of growth opportunities, respond to competitive pressures or pursue
our business plan. Our failure to have sufficient capital could have a material
adverse effect on our business, operating results and financial condition.
OUR SUBSIDIARIES ARE NOT WHOLLY-OWNED
We hold approximately 17% of the outstanding stock of i2v2.com. We may
not be able to direct its management and policies of i2v2.com. Although we have
representation on the board of i2v2.com, no assurance can be given that our
representatives will be able to influence its future direction in a manner which
results in increased value to us through our minority ownership interest.
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We hold two-thirds of the outstanding stock of e.Volve and have the
ability to elect three of the five directors of e.Volve. Although we have the
ability to control the management and policies of e.Volve, we will be required
to separately account for e.Volve as a non-wholly owned subsidiary. While
certain efficiencies can be obtained through combining e.Volve's operations and
infrastructure with that of AxisTel, unless we are successful in acquiring the
minority interests in e.Volve, we will not have the ability to completely merge
the operations of e.Volve with AxisTel.
WE EXPECT TO FACE STRONG COMPETITION FROM ANTICIPATED AND UNFORESEEN
COMPETITORS
We believe that the primary competitive factors in providing
communication products and services via the Internet include name recognition,
variety of value-added products and services, ease of use, pricing, quality of
service, availability of customer support, reliability, technical expertise and
experience. Our success will depend upon our ability to provide quality,
reliable communications services to our customers, along with cutting-edge
technology and value-added Internet products and services. Our failure to
compete successfully would have a material adverse effect on our business,
results of operations and financial condition. Many of our potential competitors
in the Internet and communication businesses have longer operating histories,
significantly greater financial, technical and marketing resources, greater name
recognition and larger existing customer bases than we do. These competitors may
be able to respond more quickly to new or emerging technologies and changes in
customer requirements and devote greater resources to the development, promotion
and sale of their products or services. We cannot assure our investors that we
will be able to successfully compete.
IF WE FAIL TO MANAGE OUR GROWTH AND INTEGRATE OUR ACQUIRED BUSINESSES,
OUR BUSINESS WILL BE ADVERSELY AFFECTED
We are in essence a new company formed by the combination of three
separate and distinct businesses with separate and distinct management teams:
AxisTel, e.Volve and, to a lesser extent, i2v2.com. We are faced with
significant integration issues with respect to these businesses and their
management teams. We may not be successful in integrating these management
teams, and we may not be able to hire and retain the quality of personnel we
need to sustain our business. To the extent that we continue to grow internally
or through strategic alliances, we will be faced with many risks, including
risks associated with the establishment of new operations, web sites and
personnel; the diversion of resources from our existing businesses; and our
management's ability to manage increased traffic. The reorganization has
resulted in significant growth of our operations. To manage this growth, we will
be required to implement and improve our operating and financial systems and
controls, and to expand, train and manage our employee base. We will be
dependent upon our management to assume and perform the management functions
formerly performed by management of each of the parties to the reorganization.
To the extent that our management is unable to assume or perform these combined
duties, our business, results of operations and financial condition could be
adversely affected. There can be no assurance that the management, systems and
controls currently in place or any steps taken to improve such management,
systems and controls will be adequate in the future. In addition, the
integration of the acquired entities and their operations will require our
management to make and implement a number of strategic operational decisions.
The timing
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and manner of the implementation of these decisions will materially impact our
business operations.
WE MUST RECRUIT AND RETAIN KEY MANAGEMENT AND TECHNICAL PERSONNEL TO BE
COMPETITIVE
Our success depends to a significant extent on the continued
contributions, experience and knowledge of our senior management team and key
technical and marketing personnel. Our success also depends upon our ability to
identify, attract, hire, train, retain and motivate highly skilled technical,
managerial, sales and marketing personnel. No assurance can be given that we
will be able to successfully attract, assimilate or retain a sufficient number
of qualified personnel. The failure to do so could have a material adverse
effect on our business.
WE OPERATE IN AN INDUSTRY WITH EVOLVING TECHNOLOGY TRENDS AND INDUSTRY
STANDARDS
Our success, in part, depends upon our ability to develop and provide
new services that meet customers' changing requirements. The Internet service
industry has been characterized by significant technological changes, frequent
new system and product enhancements, evolving industry standards and changes in
customer needs that have had and will continue to have a significant impact on
the industry and industry participants. While the communications industry has
moved at a relatively moderate pace, we believe that most carriers are adopting
new technologies and that the communications industry will take on
characteristics similar to the Internet service industry in the near future. New
technologies and standards could render existing systems obsolete and ultimately
result in lost revenues. Our future success will depend, in part, on our ability
to effectively use leading technologies, continue to develop our technological
expertise, enhance our currently planned services, develop and implement new
services that meet changing customer needs, anticipate changes and influence and
respond to emerging industry standards and other technological changes on a
timely and cost effective basis. No assurance can be made that we will keep pace
with ever changing technological trends and evolving industry standards.
THE INFINITY ENTITIES OWN A MAJORITY OF OUR COMMON STOCK AND MAY HAVE
CONFLICTS OF INTEREST
The Infinity Entities own a majority of our shares of capital stock.
The Infinity Entities, therefore, may exercise significant control over our
business, policies and affairs and, in general, determine the outcome of any
corporate transaction or other matters submitted to the stockholders for
approval, all in a manner that could conflict with the interests of other
shareholders.
SYSTEMS ON WHICH WE RELY MAY NOT PROPERLY FUNCTION IN THE YEAR 2000
Like many businesses, we rely upon computers for the daily conduct of
our business. Many software applications and operational programs are not
designed to recognize calendar dates beginning in the year 2000. The failure of
such applications or systems to properly recognize the dates beginning in the
year 2000 could result in miscalculations or system failures. We have not tested
all of our systems. In addition, there can be no assurance that the systems of
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other companies and vendors on which we rely or other companies on the Internet
will not have an adverse affect on our systems. Any failures or delays by our
own systems, systems of other companies on which we rely, or other third-parties
in recognizing or processing dates beginning in the year 2000 could have a
material adverse effect on our business, financial condition or results of
operation.
WE MAY BE SUBJECT TO INCREASED GOVERNMENTAL OVERSIGHT
Traditional offerings of telecommunications services are regulated by
the Federal Communications Commission ("FCC") and various state agencies charged
with regulating telecommunications carriers. Therefore, to the extent that we
continue to offer these services, we will be subject by regulations of the FCC.
As the telecommunications industry continues to change, the regulations of the
FCC and various state agencies continue to change. Future changes in state and
federal telecommunications laws may result in changes to the competitive
landscape within the industry, result in increased regulatory burdens or
otherwise have a material adverse effect on our business.
We believe that Internet-related services constitute information
services (as opposed to telecommunications services) and therefore are not
currently actively regulated by the FCC or state agencies regulating
telecommunications carriers. However, there can be no assurance that
Internet-related services will not be actively regulated in the future.
Increased regulation of the Internet may slow its growth, particularly if other
countries also impose similar regulations. Any regulation may negatively impact
our cost of doing business over the Internet and may materially adversely affect
our business, financial condition, operating results and future prospects. In
addition, the FCC is currently considering whether to impose surcharges or other
regulations upon certain providers of Internet telephony which, if implemented,
could materially adversely affect our business, financial condition, operating
results and future prospects. The regulatory treatment of Internet telephony
outside the United States varies from country to country. Increased regulation
of the Internet and/or Internet telephony providers or the prohibition of
Internet telephony in one or more countries could materially adversely affect
our business, financial condition, operating results and prospects.
WE DO NOT PLAN TO PAY DIVIDENDS IN OUR CAPITAL STOCK
We have never paid a dividend on our capital stock and do not expect to
pay dividends in the future. We anticipate that we will retain any earnings used
in the development of new services or the expansion of business operations.
There can be no assurance that we will ever recognize a gain from our business
operations or pay a dividend on our capital stock.
THE SHARES ELIGIBLE FOR FUTURE SALE MAY DECREASE THE PRICE OF OUR
COMMON STOCK
If our shareholders sell substantial amounts of their common stock in
the public market, including shares issued upon the exercise of outstanding
options, then the market price of our common stock could fall. Restrictions
under the securities laws and certain lock-up agreements currently in effect
limit the number of shares of common stock available for sale in the public
market. The holders of shares received in the reorganization and private
placement of our common and preferred stock have agreed not to sell in the
public market any of our shares for
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two years after the reorganization without the prior written consent of our
principal stockholders. These principal stockholders may, in their discretion,
release all or any portion of the securities subject to the lock-up agreements.
However, these holders have demand or piggy-back registration rights. We also
may shortly file a registration statement to register all shares of common stock
under our stock option plans which, if declared effective, would permit the
shares of common stock issued upon exercise of stock options under our option
plan to be resold in the public market without restriction.
OUR RIGHT TO ISSUE PREFERRED STOCK AND ANTI-TAKEOVER PROVISIONS UNDER
DELAWARE LAW COULD MAKE A THIRD PARTY ACQUISITION OF US DIFFICULT
Our certificate of incorporation provides that our board of directors
may issue preferred stock without shareholder approval. The issuance of
preferred stock could make it more difficult for a third-party to acquire us
without the approval of its board. Additionally, Delaware corporate law imposes
certain restrictions on corporate control transactions that could make it more
difficult for a third-party to acquire us without the approval of our board.
OUR COMMON STOCK HAS A LIMITED TRADING HISTORY AND AN ILLIQUID MARKET
There has only been a limited public market for our common stock. We
cannot predict the extent to which an active trading market will develop or how
liquid that market might become. The price of our common stock issued in the
reorganization may not be indicative of prices that will prevail in the trading
market.
ITEM 5. OTHER EVENTS
ADOPTION OF NEW BYLAWS, AMENDMENTS TO OUR CERTIFICATE OF INCORPORATION
AND SECURITIES PLAN
On September 22, 1999, our board of directors adopted amended and
restated bylaws, a copy of which is attached as an exhibit to this Report. On
August 25, 1999, we amended our certificate of incorporation to change our name
from Adina, Inc. to eVentures Group, Inc. and changed our trading symbol to
"EVNT." In September, a majority of our stockholders approved an amendment to
our certificate of incorporation to authorize the issuance of up to 5 million
shares of preferred stock, with rights, preferences and privileges to be
designated by our board of directors in one or more series from time to time.
This amendment was effective upon our filing an amendment to our certificate of
incorporation with the Secretary of State of Delaware on September 20, 1999. On
September 22, 1999, our board and a majority of our stockholders adopted and
approved our 1999 Omnibus Securities Plan. On September 28, 1999, we again
amended our certificate of incorporation by filing the certificate of
designation of rights, preferences and privileges for our Series A Convertible
Preferred Stock. The amendments to our certificate of incorporation are attached
as an exhibit to this Report. The stockholder approvals of our Omnibus
Securities Plan and the amendments to our certificate of incorporation were
adopted by written consent of the majority of our stockholders in lieu of
special meeting pursuant to Section 228 of the Delaware General Corporation Law
("DGCL"). A copy of this Form 8-K is being delivered to each stockholder to
inform them of the action taken at each meeting, as
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required by Section 228 of the DGCL. The September 28, 1999 amendment and filing
of the certificate of designation was adopted by our board of directors.
PRIVATE PLACEMENTS
On September 28, 1999, we completed an approximate $6 million private
placement of our common and preferred stock, as contemplated in the
Reorganization Agreement. Proceeds from these payments will be used for general
corporate purposes and as capital for new investments and projects. A copy of
the press release announcing the private placement is attached to this Report.
APPOINTMENT OF NEW DIRECTOR
On October 5, 1999, we announced that Stuart Subotnick has been
appointed to our Board of Directors effective January, 2000. Mr. Subotnick is a
general partner of Metromedia Company, one of the largest privately held
companies in the United States. Mr. Subotnick is a co-owner of Metromedia
Company with John Klug. Mr. Subotnick is also Chief Executive Officer of
Metromedia International Group, Inc., a publicly held communications company.
Mr. Subotnick serves as chairman of Big City Radio, Inc., a publicly held radio
broadcast company. Mr. Subotnick is also director of Metromedia Fiber Network,
Inc., a publicly held company that provides fiber optic communication networks.
Mr. Subotnick will act as a consultant to us until January, 2000, at which time
we expect him to formally join our Board.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired
As permitted by Form 8-K, the required historical financial information
statements required by Regulation S-X will be filed by an amendment to this Form
8-K no later than December 6, 1999.
(b) Pro forma Financial Information
As permitted by Form 8-K, the required pro forma financial information
statements required by Regulation S-X will be filed by an amendment to this Form
8-K no later than December 6, 1999.
(c) Exhibits.
2.1 Agreement and Plan of Reorganization among eVentures
Group, Inc., eVentures Holdings, LLC, IEO Holdings
Limited, Infinity Investors Limited and certain other
persons dated September 22, 1999
3.1 Amended and Restated Bylaws
3.2 Amendment to Certificate of Incorporation dated
September 17, 1999
12
<PAGE> 13
3.3 Certificate of Designation of Rights, Preferences and
Privileges of Series A Convertible Preferred Stock
dated September 24, 1999
4.1 Registration Rights Agreement dated September 22, 1999
between eVentures Group, Inc. and certain of its
shareholders
99.1 Press Release dated September 23, 1999
99.2 Press Release dated October 1, 1999
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: October 7, 1999
eVENTURES GROUP, INC.
By: /s/ John Stevens Robling, Jr.
--------------------------------
Name: John Stevens Robling, Jr.
Its: Vice-President
14
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2.1 Agreement and Plan of Reorganization among eVentures Group, Inc.,
eVentures Holdings, LLC, IEO Holdings Limited, Infinity Investors
Limited and certain other persons dated September 22, 1999
3.1 Amended and Restated Bylaws
3.2 Amendment to Certificate of Incorporation dated September 17, 1999
3.3 Certificate of Designation of Rights, Preferences and Privileges of
Series A Convertible Preferred Stock dated September 24, 1999
4.1 Registration Rights Agreement dated September 22, 1999 between
eVentures Group, Inc. and certain of its shareholders of the Company
99.1 Press Release dated September 23, 1999
99.2 Press Release dated October 1, 1999
</TABLE>
<PAGE> 1
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
eVENTURES GROUP, INC.,
eVENTURES HOLDINGS, L.L.C.,
IEO HOLDINGS LIMITED,
INFINITY INVESTORS LIMITED,
MICK Y. WETTREICH,
THE PURCHASERS LISTED ON SCHEDULE 1-A HERETO
AND
THE CONTRIBUTING PERSONS LISTED ON SCHEDULE 1-B HERETO
SEPTEMBER 22, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINITIONS............................................................................. 1
ARTICLE II THE TRANSACTIONS........................................................................ 4
2.1 Stock Sale.............................................................................. 4
2.2 Asset Sale.............................................................................. 4
2.3 The Merger and the Surviving Entity..................................................... 5
2.3.1 Merger......................................................................... 5
2.3.2 Certificate of Formation....................................................... 5
2.3.3 Operating Agreement............................................................ 5
2.3.4 Management of Surviving Entity................................................. 5
2.3.5 Officers....................................................................... 5
2.4 Effectiveness of Merger................................................................. 5
2.4.1 Articles of Merger............................................................. 5
2.4.2 Effective Date................................................................. 5
2.5 Exchange Mechanics...................................................................... 5
2.5.1 Exchange of Securities......................................................... 5
2.5.2 Redemption of Management Shares................................................ 6
2.5.3 Records........................................................................ 6
2.5.4 Stock Certificates............................................................. 6
2.5.5 Fractional Shares.............................................................. 6
2.6 Securities Law Matters.................................................................. 6
2.6.1 Private Offering............................................................... 6
2.6.2 Blue Sky Filings............................................................... 7
2.7 Further Assurances...................................................................... 7
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................... 7
3.1 Representation and Warranties of IEOH................................................... 7
3.1.1 Organization of IEOH........................................................... 7
3.1.2 Capitalization................................................................. 7
3.1.3 Subsidiaries................................................................... 7
3.1.4 Real Estate.................................................................... 7
3.1.5 Authority Relative to the Closing Documents; Enforceability.................... 7
3.1.6 Title to Assets................................................................ 8
3.1.7 Material Contracts............................................................. 8
3.1.8 Labor Matters.................................................................. 8
3.1.9 Compliance with Other Instruments; Consents.................................... 8
3.1.10 Financial Statements; Undisclosed Liabilities.................................. 8
3.1.11 Taxes.......................................................................... 9
3.1.12 Litigation..................................................................... 9
3.1.13 Brokerage...................................................................... 9
3.1.14 Permits........................................................................ 9
3.2 Representations and Warranties of eVentures, Merger Sub and the Principal Stockholder... 9
3.2.1 Organization of eVentures and Merger Sub; Foreign Qualification................ 9
3.2.2 Capitalization; Ownership of Transferred Shares................................ 9
3.2.3 Subsidiaries................................................................... 10
3.2.4 Real Estate.................................................................... 10
3.2.5 Authority Relative to the Closing Documents; Enforceability.................... 10
3.2.6 Title to Assets................................................................ 11
3.2.7 Material Contracts............................................................. 11
3.2.8 Labor Matters.................................................................. 11
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
3.2.9 Compliance with Other Instruments; Consents.................................... 11
3.2.10 Financial Statements........................................................... 11
3.2.11 Litigation..................................................................... 12
3.2.12 Brokerage...................................................................... 12
3.2.13 Permits........................................................................ 12
3.2.14 SEC Documents.................................................................. 12
3.2.15 Absence of Certain Changes or Events........................................... 12
3.2.16 Taxes.......................................................................... 12
3.2.17 Compliance with Law and Government Regulations................................. 13
3.2.18 Trade Names and Rights......................................................... 13
3.2.19 No Disqualifying Orders........................................................ 13
3.2.20 Bank Accounts.................................................................. 13
3.2.21 HSR............................................................................ 13
3.2.22 Transactions with Affiliates................................................... 13
3.2.23 Stock Price Manipulation....................................................... 13
3.2.24 Nasdaq SmallCap Market Eligibility............................................. 13
3.2.25 Investment Company Act......................................................... 13
3.2.26 Integration.................................................................... 14
3.2.27 SEC Correspondence............................................................. 14
3.2.28 Full Disclosure................................................................ 14
3.3 Representations and Warranties of Infinity.............................................. 14
3.3.1 Organization of Infinity....................................................... 14
3.3.2 Authorization.................................................................. 14
3.3.3 Title to Assets................................................................ 14
3.3.4 Brokerage...................................................................... 14
3.4 Representations and Warranties of Contributing Persons (other than Infinity)............ 14
3.4.1 Authorization.................................................................. 14
3.4.2 Title to Assets................................................................ 14
3.4.3 Axistel Contributions.......................................................... 14
ARTICLE IV ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES...................................... 15
4.1 Filing with Securities and Exchange Commission.......................................... 15
4.2 Brokers or Finders...................................................................... 15
ARTICLE V CLOSING DELIVERIES...................................................................... 15
5.1 The Closing............................................................................. 15
5.2 Deliveries by eVentures and the Principal Stockholder................................... 15
5.2.1 Certified Resolutions.......................................................... 15
5.2.2 Charter Documents.............................................................. 15
5.2.3 Account Transfer Documents..................................................... 15
5.2.4 Registration Rights Agreement.................................................. 15
5.2.5 Transferred Shares............................................................. 15
5.2.6 Merger Shares.................................................................. 16
5.2.7 Additional Shares.............................................................. 16
5.2.8 Certificate of Merger.......................................................... 16
5.2.9 Resignations................................................................... 16
5.3 Deliveries by Purchasers................................................................ 16
5.3.1 Corporate Approvals............................................................ 16
5.3.2 Purchase Price................................................................. 16
5.3.3 Investment Letter.............................................................. 16
5.3.4 Stockholder Consent............................................................ 16
5.4 Deliveries by Contributing Persons...................................................... 16
5.4.1 Corporate Approvals............................................................ 16
5.4.2 Contributing Persons' Assets................................................... 16
5.4.3 Axistel Books and Records...................................................... 16
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
5.4.4 [Reserved]..................................................................... 17
5.4.5 Axistel Options................................................................ 17
5.4.6 [Reserved]..................................................................... 17
5.4.7 Investment letter.............................................................. 17
5.4.8 Letter of Transmittal.......................................................... 17
5.4.9 Registration Rights Agreement.................................................. 17
5.4.10 Stockholder Consent............................................................ 17
5.5 Deliveries by IEOH...................................................................... 17
5.5.1 Necessary Corporate Approvals.................................................. 17
5.5.2 Redemption of IEOH Management Shares........................................... 17
5.5.3 Investment letter.............................................................. 17
5.5.4 Registration Rights Agreement.................................................. 17
5.5.5 Letter of Transmittal.......................................................... 17
5.5.6 Stockholder Consent............................................................ 17
5.5.7 Certificate of Merger.......................................................... 17
5.6 Other Deliveries........................................................................ 17
5.6.1 Stock Options.................................................................. 17
5.6.2 Employment Agreements.......................................................... 17
5.6.3 Repayment of Axistel Indebtedness.............................................. 17
5.7 Infinity Contribution................................................................... 18
ARTICLE VI SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION......................................... 18
6.1 Representations to Survive Closing...................................................... 18
6.2 Indemnification......................................................................... 18
6.3 Enforcement of Indemnification Rights................................................... 18
6.3.1 Notification................................................................... 18
6.3.2 Disputes....................................................................... 18
6.3.3 Time Limit..................................................................... 18
6.3.4 Litigation Procedure........................................................... 18
6.3.5 Waiver of Rights of Contribution or Similar Rights............................. 19
6.4 Remedies Cumulative..................................................................... 19
ARTICLE VII MISCELLANEOUS........................................................................... 19
7.1 Notices................................................................................. 19
7.2 Assignability and Parties in Interest................................................... 20
7.3 Expenses................................................................................ 20
7.4 Governing Law........................................................................... 20
7.5 Counterparts............................................................................ 20
7.6 Headings................................................................................ 20
7.7 Pronouns, Etc........................................................................... 20
7.8 Complete Agreement...................................................................... 20
7.9 Modifications, Amendments and Waivers................................................... 20
7.10 Severability............................................................................ 20
</TABLE>
iii
<PAGE> 5
APPENDICES
DESCRIPTION
Appendix A Letter of Transmittal
Appendix B Investment Letter
Appendix C Registration Rights Agreement
Appendix D 1999 Stock Option Plan
Appendix E Amended and Restated Bylaws of eVentures
Appendix F Stockholder Consent
SCHEDULES
DESCRIPTION
Schedule 1-A List of Purchasers; Purchase Price and Share Allocation
Schedule 1-B List of Contributing Persons; Contributed Assets and Share
Allocations
Schedule 2.3.5 Officers of Surviving Entity
Schedule 3.1.3 IEOH Investments
Schedule 3.1.7 IEOH Material Contracts
Schedule 3.1.10 IEOH Financial Statements
Schedule 3.2.14 eVentures SEC Documents
Schedule 3.2.18 eVentures Exceptions to Trade Names and Rights
Schedule 3.2.20 eVentures Bank Accounts
Schedule 3.2.22 eVentures Affiliate Agreements
Schedule 5.2.1 Directors of eVentures Upon Closing; Option Grants
Schedule 5.2.3 Authorized Signatories for eVenture's Bank Accounts
Schedule 5.3.2 Wire Transfer Instructions for Principal Stockholder
Schedule 5.4.2 Wire Transfer Instructions for Infinity Contribution
Schedule 5.4.5 Axistel Replacement Options
Schedule 5.6.2 Persons to Receive Employment Agreements Upon Closing
iv
<PAGE> 6
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("AGREEMENT") has been made
and entered into as of this 22nd day of September, 1999, among eVENTURES GROUP,
INC., a Delaware corporation ("eVENTURES"), eVENTURES HOLDINGS, L.L.C., a
Delaware limited liability company and wholly-owned subsidiary of eVentures
("MERGER SUB"), IEO HOLDINGS LIMITED, a NeVis, West Indies corporation ("IEOH"),
INFINITY INVESTORS LIMITED, a NeVis, West Indies corporation ("INFINITY"), MICK
Y. WETTREICH, an individual resident of London, England (the "PRINCIPAL
Stockholder"), the persons listed on Schedule 1-A to this Agreement
(collectively, the "PURCHASERS"), and the persons listed on Schedule 1-B to this
Agreement (collectively, together with Infinity, are herein sometimes
collectively referred to as the "CONTRIBUTING PERSONS," whether one or more).
R E C I T A L S:
A. The parties hereto desire to effect a reorganization (the
"REORGANIZATION") pursuant to which the Purchasers will purchase from the
Principal Stockholder an aggregate of 8,500,000 shares (the "TRANSFERRED
SHARES") of the common stock of eVentures, par value $0.00002 per share (the
"eVENTURES STOCK"), to be purchased by each Purchaser in the amounts and for the
consideration set forth in Schedule 1-A attached hereto (the "STOCK SALE"), and
immediately thereafter each of the following transactions will occur
simultaneously: (i) IEOH will be merged with and into Merger Sub (the "MERGER"),
with Merger Sub continuing as the surviving entity under the laws of the State
of Delaware, and (ii) the Contributing Persons will sell or contribute certain
of his or its assets to eVentures (the "ASSET SALE") in exchange for the number
of shares of eVentures Stock to be issued by eVentures as set forth in Schedule
1-B attached hereto.
B. The respective Boards of Directors or Managers of eVentures, Merger
Sub and IEOH, and each Contributing Person and Purchaser that is a corporation
or limited liability company, have determined that it is in the best interests
of each entity and its respective stockholders or members that the
Reorganization be consummated in the manner and on the terms and conditions set
forth herein.
C. Pursuant to the Stock Sale, the Principal Stockholder will sell, and
the Purchasers will collectively purchase, the Transferred Shares.
D. Pursuant to the Asset Sale, the Contributing Persons will transfer
certain of their respective assets (including (a) cash and (b) securities in or
indebtedness of (i) e.Volve Technology Group, Inc., a NeVada corporation
formerly known as Orix Global Communications, Inc. ("e.VOLVE"), and (ii) Axistel
Communications, Inc., a Delaware corporation ("AXISTEL")), to eVentures in
exchange for shares of eVentures Stock.
E. Pursuant to the Merger, the outstanding shares of IEOH (the "IEOH
SHARES") will be converted into the right to receive shares of eVentures Stock,
as further provided herein.
F. The respective Boards of Directors or Managers of eVentures, Merger
Sub and IEOH desire to effectuate the Merger as a tax free reorganization for
United States federal income tax purposes.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
contained herein, the parties hereto agree as follows and do thereby adopt this
Agreement and Plan of Reorganization.
ARTICLE I.
DEFINITIONS
The terms defined in this Article (except as otherwise expressly
provided in this Agreement) for all purposes of this Agreement shall have the
respective meanings specified in this Article.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 1
eVENTURES GROUP, INC.
<PAGE> 7
"AFFILIATE" shall mean any entity controlling or controlled by another
person, under common control with another person, or controlled by any entity
which controls such person.
"AGREEMENT" shall mean this Agreement, and all the exhibits, schedules
and other documents attached to or referred to in the Agreement, and all
amendments and supplements, if any, to this Agreement.
"AXISTEL COMMON STOCK" shall mean the shares of common stock of
Axistel.
"CLOSING" shall mean the meeting of the parties at which the Closing
Documents shall be exchanged by the parties, except for those documents or other
items specifically required to be exchanged at a later time.
"CLOSING DATE" shall mean September 22, 1999, or such other date as
agreed in writing to by the parties on which the Closing occurs.
"CLOSING DOCUMENTS" shall mean the papers, instruments and documents
required to be executed and delivered at the Closing pursuant to this Agreement.
"CODE" shall mean the Internal Revenue of 1986, or any successor law,
and regulations issued by the Internal Revenue Service pursuant to the Internal
Revenue Code or any successor law.
"DEBENTURES" shall mean those certain debentures, as amended, renewed
and/or extended, which have been issued pursuant to that certain Securities
Purchase Agreement dated as of June 11, 1998, by and between Orix Global
Communications, Inc., a Nevada corporation (now known as e.Volve) and Infinity,
a 50% interest in which has been participated/assigned by Infinity to IEOH,
including the following (a) Amended and Restated $7,050,000 Debenture dated
April 15, 1999, and executed by Orix Global Communications, Inc., a Nevada
corporation (now known as e.Volve), in favor of Infinity, which represents a
consolidation of three separate debentures: (i) $6,000,000 Debenture dated June
11, 1998, executed by Orix Global Communications, Inc., a Nevada corporation
(now known as e.Volve), in favor of Infinity; (ii) $850,000 Debenture dated
August 19, 1998, executed by Orix Global Communications, a Nevada corporation
(now known as e.Volve), in favor of Infinity; and (iii) $200,000 Debenture dated
April 15, 1999, executed by Orix Global Communications, Inc., a Nevada
corporation (now known as e.Volve), (b) $390,000 Debenture dated February 9,
1999, and executed by Orix Global Communications, Inc., a Nevada corporation
(now known as e.Volve), in favor of Infinity, (c) $500,000 Debenture dated April
29, 1999, and executed by Orix Global Communications, Inc., a Nevada corporation
(now known as e.Volve), in favor of Infinity, and (d) $100,000 Debenture dated
April 30, 1999, and executed by Orix Global Communications, Inc., a Nevada
corporation (now known as e.Volve), in favor of Infinity.
"ENCUMBRANCE" shall mean any charge, claim, encumbrance, community
property interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting (in the case of any security), transfer, receipt of
income, or exercise of any other attribute of ownership other than (a) liens for
taxes not yet due and payable, or (b) liens that secure the ownership interests
of lessors of equipment.
"e.VOLVE COMMON STOCK" shall mean the shares of common stock of
e.Volve.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"GAAP" shall mean generally accepted accounting principles applied in a
manner consistent with prior periods.
"INVESTMENT LETTER" shall mean the investment letter in the form
attached hereto as Appendix B.
"LETTER OF TRANSMITTAL" shall mean a letter of transmittal in the form
attached hereto as Appendix A.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 2
eVENTURES GROUP, INC.
<PAGE> 8
"MATERIAL ADVERSE EFFECT" means any change (individually or in the
aggregate) in the general affairs, management, business, goodwill, results of
operations, condition (financial or otherwise), assets, liabilities or prospects
(whether or not the result thereof would be covered by insurance) that would be
material and adverse to the designated party.
"ORDINARY COURSE OF BUSINESS" shall mean actions consistent with the
past practices of the designated party which are similar in nature and style to
actions customarily taken by the designated party and which do not require, and
in the past have not received, specific authorization by the Board of Directors
of the designated party.
"PERMITS" shall mean any permit, license, exemption, order or approval
of any federal, state or local governmental entity necessary for the conduct of
the designated party's respective business as currently conducted.
"PROPOSED PLACEMENT" means eVentures' proposed private offering of up
to $1.5 million of preferred stock (convertible into shares of common stock of
eVentures at $5.00 per share) and of up to $1.5 million of common stock at an
offering price of $2.00 per share.
"REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement in the form attached hereto as Appendix C.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
"TAXES" shall include federal, state and local income taxes, capital
gains tax, value-added taxes, franchise, personal property and real property
taxes, levies, assessments, tariffs, duties (including any customs duty),
business license or other fees, sales, use and any other taxes relating to the
assets of the designated party or the business of the designated party for all
periods up to and including the Closing Date, together with any related charge
or amount, including interest, fines, penalties and additions to tax, if any,
arising out of tax assessments.
"TRANSACTIONS" shall mean the Reorganization contemplated by this
Agreement, together with each of the other transactions contemplated by the
Closing Documents, including, without limitation, the Merger, the Asset Sale and
the Stock Sale.
"WARRANTS" shall mean those Common Stock Purchase Warrants,
collectively, which are described as follows: (a) that certain Common Stock
Purchase Warrant No. 1 ("WARRANT NO. 1"), dated as of April 15, 1999, executed
by Orix Global Communications, Inc., now known as e.Volve Technology, Inc., a
Nevada corporation, in favor of Infinity Investors Limited, or its assigns, as
the holder thereunder granting such holder the right to acquire up to 170 fully
paid and nonassessable shares of e.Volve Common Stock upon the terms and
conditions therein specified, and (b) that certain Common Stock Purchase Warrant
No. 2 ("WARRANT NO. 2"), dated as of April 15, 1999, executed by Orix Global
Communications, Inc., now known as e.Volve Technology, Inc., a Nevada
corporation, in favor of IEO Holdings Limited, or its assigns, as the holder
thereunder, granting such holder the right to acquire up to 170 fully paid and
nonassessable shares of e.Volve Common Stock upon the terms and conditions
therein specified.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 3
eVENTURES GROUP, INC.
<PAGE> 9
Terms Defined in Other Sections. The following terms are defined
elsewhere in this Agreement in the following Sections:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Affiliate Agreements........................ 3.2.22
Asset Sale.................................. Recitals
Axistel..................................... Recitals
Contributing Persons........................ Introduction
Contributing Persons' Assets................ 2.2
DLLCA....................................... 2.3.1
Effective Date.............................. 2.3.1
eVentures................................... Introduction
eVentures Financial Statements.............. 3.2.10.1
eVentures SEC Documents..................... 3.2.14
eVentures Stock............................. Recitals
e.Volve..................................... Recitals
IEOH........................................ Introduction
IEOH Financial Statements................... 3.1.10
IEOH Investments............................ 3.1.3
IEOH Management Shares...................... 2.5.2
IEOH Participating Shares................... 2.5.1.1
IEOH Shares................................. Recitals
IEOH Stockholders........................... 2.5.4
Insolvency/Equity Exceptions................ 3.1.5
Merger...................................... Recitals
Merger Sub.................................. Introduction
Merger Sub Interests........................ 2.5.1.2
Nasdaq-SCM.................................. 3.2.24
Nevis Law................................... 2.4.1
1999 Stock Option Plan...................... 5.2.1
Principal Stockholder....................... Introduction
Purchase Price.............................. 2.1
Purchasers.................................. Recitals
Regulation D................................ 2.6.1
Reorganization.............................. Recitals
Stock Sale.................................. Recitals
Surviving Entity............................ 2.3.1
Transferred Shares.......................... Recitals
</TABLE>
ARTICLE II.
THE TRANSACTIONS
2.1. STOCK SALE. Subject to the terms and conditions of the Closing
Documents, the Principal Stockholder hereby sells, transfers and delivers to the
Purchasers, and the Purchasers hereby collectively purchase and accept, the
number of Transferred Shares set forth beside such Purchasers' name on Schedule
1-A hereto, in consideration for an aggregate purchase price payable by the
Purchasers to the Principal Stockholder of TWO HUNDRED THOUSAND DOLLARS
($200,000) ("PURCHASE PRICE"), payable by each Purchaser in the respective
portion of the Purchase Price set forth beside such Purchaser's name on Schedule
1-A hereto.
2.2. ASSET SALE. Subject to the terms and conditions of the Closing
Documents and subject to and immediately following the consummation of the Stock
Sale, the Contributing Persons hereby sell, transfer and deliver to eVentures,
to the extent owned by such Contributing Person, and eVentures hereby purchases
and
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 4
eVENTURES GROUP, INC.
<PAGE> 10
accepts, all of the assets described in Schedule 1-B (collectively, the
"CONTRIBUTING PERSONS' ASSETS"), in exchange for the number of shares of
eVentures Stock set forth in Schedule 1-B attached hereto.
2.3. THE MERGER AND THE SURVIVING ENTITY.
2.3.1. Merger. Upon the date on which the Merger is to be
effective, as determined pursuant to Section 2.4.2 hereof (the "EFFECTIVE
DATE"), (a) IEOH shall be merged with and into Merger Sub, (b) Merger Sub shall
be the Surviving Entity (the "SURVIVING ENTITY"), (c) the separate existence of
IEOH shall cease and all rights, privileges, powers, immunities and franchises
of IEOH shall be automatically vested in Merger Sub, and (d) the existence of
Merger Sub shall continue unaffected and unimpaired by the Merger, with all of
the rights, privileges, immunities and powers, and subject to all of the duties
and liabilities of a limited liability company organized under, the Delaware
Limited Liability Company Act (the "DLLCA"). All real and personal property of
IEOH, tangible and intangible, of every kind and description, shall become
vested in Merger Sub and all liabilities, claims and obligations of IEOH may be
enforced against Merger Sub, all without further action or deed by any party
hereto. In all other respects, the effect of the Merger shall be as set forth in
the DLLCA.
2.3.2. Certificate of Formation. The Certificate of Formation of
Merger Sub shall be and remain the Certificate of Formation of the Surviving
Entity following the Effective Date, until the same shall be altered or amended.
2.3.3. Operating Agreement. The Operating Agreement of Merger Sub
shall be the Regulations of the Surviving Entity following the Effective Date,
until the same shall be altered or amended.
2.3.4. Management of Surviving Entity. From and after the
Effective Date, the Surviving Entity shall be managed by its members, as
provided in the Operating Agreement of the Surviving Entity.
2.3.5. Officers. From and after the Effective Date, the officers
of the Surviving Entity shall consist of the persons listed on Schedule 2.3.5
holding the respective office(s) listed opposite such person's name, until their
respective successors shall be duly elected or appointed and qualified.
2.4. EFFECTIVENESS OF MERGER.
2.4.1. Articles of Merger. Promptly following the execution of
this Agreement by all parties hereto, IEOH and Merger Sub shall cause
appropriate Articles of Merger to be executed and filed with the Registrar of
Companies of the Island of Nevis as provided in Section 90(5) of the Nevis
Business Corporation Ordinance (the "NEVIS LAW") and with the Secretary of State
of the State of Delaware, as provided in Section 18-209 of the DLLCA.
2.4.2. Effective Date. The Merger shall become effective following
the consummation of the Stock Sale immediately upon the filing of the Articles
of Merger referred to in Section 2.4.1 hereof with the Registrar of Companies of
the Island of Nevis and with the Secretary of State of the State of Delaware.
2.5. EXCHANGE MECHANICS.
2.5.1. Exchange of Securities. On the Effective Date, by virtue of
the Merger and without any action on the part of any stockholder:
2.5.1.1. Each non-voting, redeemable, participating share
of IEOH (the "IEOH PARTICIPATING SHARES") outstanding immediately prior to the
Effective Date shall be converted into the right to receive 14,763.475 shares of
eVentures Stock, subject to upward adjustment in accordance with Section 2.5.5
below.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 5
eVENTURES GROUP, INC.
<PAGE> 11
2.5.1.2. The membership interests of Merger Sub ("MERGER
SUB INTERESTS") outstanding immediately prior to the Effective Date shall be
converted into one (1) duly issued, validly authorized, fully paid and
nonassessable membership interest of the Surviving Entity, so that thereafter
eVentures will be the sole and exclusive owner of all outstanding membership
interests or other securities of the Surviving Entity.
2.5.1.3. The Surviving Entity shall be the owner of all of
the business, rights, assets and other attributes of, or held by, either IEOH or
Merger Sub.
2.5.2. Redemption of Management Shares. Immediately before or
simultaneously with the Merger, such voting, non-redeemable, non-participating
shares of IEOH (the "IEOH MANAGEMENT SHARES") outstanding prior to the Effective
Date shall be redeemed by IEOH from the owners of such IEOH Management Shares
for an aggregate of $1.00, and as a result, there will be no IEOH Management
Shares outstanding at the time the Merger takes effect.
2.5.3. Records. For the purposes of this Agreement, the stock
transfer books of IEOH shall be closed as of the Effective Date, and no transfer
of record of any shares of IEOH Participating Shares or IEOH Management Shares
shall take place after the Effective Date.
2.5.4. Stock Certificates. On or immediately after the Effective
Date, each holder of IEOH Participating Shares (the "IEOH STOCKHOLDERS") shall
be entitled to receive a certificate or certificates representing the number of
whole shares of eVentures Stock into which their IEOH Participating Shares shall
have been converted and exchanged in the Merger. Upon the surrender by a holder
of record of certificates representing IEOH Participating Shares (the "IEOH
CERTIFICATES") for cancellation to eVentures, together with a duly executed
Letter of Transmittal, the holder of an IEOH Certificate shall be entitled to
receive and exchange therefor the number of shares of eVentures Stock determined
pursuant to Section 2.5.1.1 above. Until surrendered as contemplated by this
Section 2.5.4, each IEOH Certificate shall be deemed from and after the
Effective Date to represent only the right to receive upon surrender the
eVentures Stock issuable pursuant to the Merger contemplated by this Agreement.
Neither eVentures nor any party hereto shall be liable to the holder of IEOH
Participating Shares for any amount paid to a public official as required by any
applicable abandoned property, escheat or similar law. If any IEOH Certificate
shall have been lost, stolen or destroyed, upon the making of an affidavit of
the fact by the person claiming such IEOH Certificate to be lost, stolen or
destroyed, eVentures will issue and exchange for such lost, stolen or destroyed
IEOH Certificate the number of shares of eVentures Stock issuable pursuant to
the Merger contemplated by this Agreement, without the requirement that any bond
or other security be posted in connection with such affidavit of lost IEOH
Certificate.
2.5.5. Fractional Shares. No certificates or scrip representing
fractional shares of eVentures Stock shall be issued as a consequence of the
Merger and, in lieu thereof, each IEOH Stockholder otherwise entitled to a
fraction of a share of eVentures Stock shall have his, her or its stock
certificate representing eVentures Stock rounded up to the nearest whole share.
2.6. SECURITIES LAW MATTERS.
2.6.1. Private Offering. Each Purchaser, Contributing Person and
IEOH Stockholder understands that the eVentures Stock to be issued and delivered
to them pursuant to terms of this Agreement or the Merger will not be registered
under the Securities Act but will be issued in reliance upon the exemption
afforded by Section 4(2) of the Securities Act and/or Regulation D promulgated
by the SEC thereunder ("REGULATION D") or, with regard to sales by the Principal
Stockholder to each Purchaser, in reliance upon exemptions available for resales
by affiliates in private transactions, and that eVentures is relying upon the
truth and accuracy of the representations set forth in the Investment Letter
delivered concurrently with the execution of this Agreement. Each certificate of
eVentures Stock issued to each Purchaser, Contributing Person or IEOH
Stockholder pursuant to terms of this Agreement or the Merger shall bear the
following legend:
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 6
eVENTURES GROUP, INC.
<PAGE> 12
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE TRANSFERRED
UNLESS THEY ARE SO REGISTERED OR, IN THE OPINION OF COUNSEL
ACCEPTABLE TO THIS CORPORATION, SUCH TRANSFER IS EXEMPT FROM
REGISTRATION. FURTHER, THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY NOT BE SOLD UNDER RULE 144 PRIOR TO SEPTEMBER 21, 2001 OTHER
THAN IN COMPLIANCE WITH THE REGISTRATION RIGHTS AGREEMENT DATED
SEPTEMBER 22, 1999.
eVentures shall give instructions to its transfer agent consistent with
the foregoing legend.
2.6.2. Blue Sky Filings. eVentures shall promptly institute and
diligently prosecute such proceedings before, and make such filings with, such
state regulatory agencies as may be necessary or appropriate in connection with,
or preliminary to, the issuance of eVentures Stock to be issued to each
Purchaser, Contributing Person or IEOH Stockholder pursuant to the terms of this
Agreement or the Merger and any solicitation of such persons for their approval
of this Agreement and the transactions related hereto.
2.7. FURTHER ASSURANCES. If at any time after the Effective Date,
eVentures or the Surviving Entity shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Entity its right, title or interest in, to or under any of the rights,
properties or assets of IEOH acquired or to be acquired by the Surviving Entity
as a result of, or in connection with, the Merger or otherwise to carry out the
Transactions, the officers of the Surviving Entity shall be authorized to
execute and deliver, in the name and on behalf of IEOH or otherwise, all such
deeds, bills of sale, assignments and assurances and to take and do all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to or under such rights,
properties or assets in the Surviving Entity or otherwise to carry out the
purposes of this Agreement.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1. REPRESENTATIONS AND WARRANTIES OF IEOH. IEOH represents and
warrants to eVentures as follows:
3.1.1. Organization of IEOH. IEOH is a business corporation, duly
organized, validly existing, and in good standing under the laws of the
Island of Nevis, West Indies, and has all requisite corporate power,
franchises and licenses to own its property and conduct the business in
which it is engaged.
3.1.2. Capitalization.
3.1.2.1. IEOH has an authorized capital stock consisting of
IEOH Participating Shares, of which one thousand (1,000) shares
are issued and outstanding, and IEOH Management Shares, of which
one (1) share is issued and outstanding. All of the IEOH
Participating Shares and the IEOH Management Share have been
validly issued, fully paid and are non-assessable.
3.1.2.2.IEOH does not have outstanding subscriptions,
options, rights, warrants, convertible securities or other
agreements or commitments to issue, or contracts or any other
agreements obligating IEOH to issue, or to transfer from treasury,
any shares of its capital stock of any class or kind, or
securities convertible into such stock.
3.1.3. Subsidiaries. IEOH does not directly or indirectly have any
wholly-owned subsidiaries. Schedule 3.1.3 sets forth a description of
each material equity investment IEOH holds as of the date of this
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 7
eVENTURES GROUP, INC.
<PAGE> 13
Agreement in any corporation, partnership, joint venture or other
business entity (the "IEOH INVESTMENTS"). IEOH holds the IEOH
Investments free and clear of any Encumbrance.
3.1.4. Real Estate. IEOH does not own any real estate or any
interest in any real estate. IEOH does not lease any real estate from
or to any person.
3.1.5. Authority Relative to the Closing Documents;
Enforceability. IEOH has the requisite corporate power and authority to
execute and deliver the Closing Documents and, subject to the adoption
of the Agreement by the holders of the IEOH Management Shares, to
consummate the Transactions. The execution and delivery of the Closing
Documents by IEOH, and the consummation by IEOH of the Transactions,
have been duly authorized by the Board of Directors of IEOH and,
subject to the adoption of the Agreement by the holders of the IEOH
Management Shares, no other corporate action on the part of IEOH is
necessary to authorize the execution and delivery by IEOH of the
Closing Documents and the consummation by it of the Transactions. The
Closing Documents executed by IEOH are the legal, valid and binding
obligations of IEOH, enforceable against IEOH in accordance with their
respective terms, except insofar as its enforcement may be limited by
(a) bankruptcy, insolvency, moratorium or similar laws affecting the
enforcement of creditors, rights generally and (b) equitable principles
limiting the availability of equitable remedies (collectively, the
"INSOLVENCY/EQUITY EXCEPTIONS"). All persons who execute the Closing
Documents on behalf of IEOH will have been duly authorized to do so.
3.1.6. Title to Assets. IEOH has good and marketable title in and
to the IEOH Investments, which constitute all assets owned by IEOH as
of the date hereof, which assets and properties are free and clear of
any Encumbrance.
3.1.7. Material Contracts. Schedule 3.1.7 hereto identifies the
following contracts, leases and other obligations to which IEOH is a
party or by which it is bound and which are not identified elsewhere in
any other Schedule to this Agreement: (a) contracts with or loans to
any of IEOH's stockholders, officers or directors; (b) secured and
unsecured loans and lines of credit evidencing indebtedness owed by
IEOH; (c) contracts restricting IEOH from doing business in any areas
or in any way limiting competition; (d) contracts calling for aggregate
payments by IEOH in excess of $50,000 and which are not terminable
without cost or liability on notice of 60 days or less; and (e)
guarantees by IEOH of the obligations of any other party. Except as
disclosed on Schedule 3.1.7, IEOH has, in all material respects,
performed or complied with all material obligations required on its
part to be performed or complied with through the date hereof under any
of such contracts, obligations or commitments to which it is a party or
otherwise bound and no default has occurred thereunder, whether waived
or not waived, which could reasonably be expected to have a Material
Adverse Effect. All parties to such contracts, obligations or
commitments with IEOH are in substantial compliance therewith and no
event has occurred which, through the giving of notice or the passage
of time or both, would cause or constitute a material default under any
such contracts, obligations or commitments, or would cause the
acceleration of any obligation of any party thereto. Copies of the
contracts listed or referred to in Schedule 3.1.7 have been or will
promptly be delivered or made available to eVentures.
3.1.8. Labor Matters. There are presently no employment or
consulting contracts with or covenants against competition by, any
present or former employees of IEOH. IEOH does not have any employees.
3.1.9. Compliance with Other Instruments; Consents. Neither the
execution of any Closing Document, nor the consummation of the
Transactions, will conflict with, violate or result in a breach or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default), or result in the termination of,
or accelerate the performance required by, or result in the creation of
any Encumbrance upon any of the assets of IEOH under any provision of
any provision of the Articles of Incorporation, Bylaw, indenture,
mortgage, lien, lease, agreement, contract, instrument, order,
judgment,
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 8
eVENTURES GROUP, INC.
<PAGE> 14
decree, statute, ordinance, regulation or any other restriction of any
kind or character to which IEOH is subject or by which IEOH is bound,
or require the consent of any third party or governmental agency.
3.1.10. Financial Statements; Undisclosed Liabilities. IEOH has
delivered to eVentures the financial statements of Axistel
Communications, Inc. and e.Volve Technology Group, Inc. (formerly known
as Orix Global Communications, Inc.) attached as Schedule 3.1.10 hereto
(the "IEOH FINANCIAL STATEMENTS"). IEOH has no assets or operations
other than the IEOH Investments. Except for IEOH's investment in
i2v2.com, Inc. of approximately $2.1 million (representing, at the time
of the investment, an approximate 21% interest in i2v2 on a "fully
diluted" basis at that time) for which no financial statements are
available, the IEOH Financial Statements fairly present, in all
material respects, the properties, assets and results of operations of
the entities in which IEOH holds the IEOH Investments as of the dates
and for the periods indicated. IEOH has not received notice of any
liabilities or claims of any nature, whether absolute, accrued,
unmatured, contingent or otherwise, other than as set forth on the IEOH
Financial Statements.
3.1.11. Taxes.
3.1.11.1. IEOH either (a) has timely filed with the
appropriate taxing authority all Tax and information returns
required to have been filed by IEOH or (b) has timely filed for
any required extensions with regard to such returns. All Taxes of
IEOH have been paid (or estimated Taxes have been deposited) to
the extent such payments are required prior to the date hereof or
accrued on the books of IEOH. The returns were correct when filed.
3.1.11.2. IEOH has not received any notice of any pending
investigations of IEOH concerning any Tax returns by any federal,
state or local taxing authority. There are no federal, state,
local or foreign Tax liens upon any of IEOH's assets.
3.1.12. Litigation. There are no legal, administrative,
arbitration or other proceedings or claims pending against IEOH nor is
IEOH subject to any existing judgment which might affect the financial
condition, business, property or prospects of IEOH; nor has IEOH
received any inquiry from an agency of the federal or of any state or
local government about the Transactions, or about any violation or
possible violation of any law, regulation or ordinance affecting its
business or assets.
3.1.13. Brokerage. No broker or finder has rendered services to
IEOH in connection with the Transactions.
3.1.14. Permits. IEOH does not have any Permits nor is it required
to maintain any Permits.
3.2. REPRESENTATIONS AND WARRANTIES OF eVENTURES, MERGER SUB AND THE
PRINCIPAL STOCKHOLDER. eVentures, Merger Sub and the Principal Stockholder
hereby jointly and severally represent and warrant to IEOH, the IEOH
Stockholders, the Contributing Persons and the Purchasers that:
3.2.1. Organization of eVentures and Merger Sub; Foreign
Qualification. Each of eVentures and Merger Sub is duly organized,
validly existing, and in good standing under the laws of the state of
Delaware and has all requisite corporate power, franchises, and
licenses to own its property and conduct the business in which it is
engaged. Each of eVentures, Merger Sub and the Principal Stockholder
have the full power and authority (corporate or otherwise) to execute,
deliver and perform their respective obligations under this Agreement
and the Closing Agreements to which it is a party. Complete copies of
eVenture's and Merger Sub's Certificate of Incorporation or Articles of
Organization, Bylaws or Regulations, minutes, transfer records and
agreements, if any, among some or all of the stockholders of eVentures
have been delivered or made available to IEOH, the Purchasers and the
Contributing Persons. eVentures is duly qualified and in good standing
as a foreign corporation in every jurisdiction in which
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 9
eVENTURES GROUP, INC.
<PAGE> 15
such qualification is necessary, except to the extent the failure to be
so qualified is not reasonably expected to result in a Material Adverse
Effect.
3.2.2. Capitalization; Ownership of Transferred Shares.
3.2.2.1. eVentures has an authorized capital stock
consisting of 75,000,000 shares of common stock, par value
$0.00002 per share, of which 10,330,610 shares are issued and
outstanding and 5,000,000 shares of preferred stock, none of which
are issued or outstanding. All of the shares of eVentures Stock
have been validly issued, fully paid, are non-assessable, and were
issued in compliance with any preemptive or similar rights and in
compliance with applicable federal and state securities laws. All
of the authorized, issued and outstanding Merger Sub Interests are
owned and held by eVentures, and all of the issued and outstanding
Merger Sub Interests have been duly authorized and validly issued
and are fully paid and nonassessable, issued in compliance with
any preemptive or similar rights and in compliance with applicable
federal and state securities laws.
3.2.2.2.Other than the Proposed Placement, neither
eVentures nor Merger Sub has any outstanding subscriptions,
options, rights, warrants, convertible securities or other
agreements or commitments to issue, or contracts or any other
agreements obligating either eVentures or Merger Sub to issue, or
to transfer from treasury, any shares of its capital stock or
membership interests, as applicable, of any class or kind, or
securities convertible into such stock or interests. No persons
who are now holders of eVentures Stock or Merger Sub Interests,
and no persons who previously were holders of eVentures Stock or
Merger Sub Interests, are or ever were entitled to preemptive
rights other than persons who exercised or waived those rights.
3.2.2.3.Other than the Transactions, there is no
outstanding vote, plan, pending proposal or right of any person to
cause any redemption of eVentures Stock or the merger or
consolidation of Merger Sub with or into any other entity. Neither
eVentures, Merger Sub, nor any of their respective Affiliates is
under any obligation, contract or other arrangement to register
any of its or their securities under federal or state securities
laws.
3.2.2.4.There are no agreements, voting trusts, proxies or
other agreements or understanding of any character, whether
written or oral, among stockholders of eVentures with respect to
or concerning the purchase, sale or transfer or voting of the
eVentures Stock or any other security of eVentures.
3.2.2.5.Neither eVentures nor the Principal Stockholder has
any legal obligations, absolute or contingent, to any other person
or entity to sell the assets, or any capital stock or any other
security of eVentures or any of its subsidiaries or affect any
merger, consolidation or other reorganization of eVentures or any
of its subsidiaries or to enter into any agreement with respect
thereto, except pursuant to this Agreement, or any Related
Agreement or the Proposed Placement.
3.2.2.6.The Principal Stockholder is the sole beneficial
and record holder of the Transferred Shares. The Principal
Stockholder holds the Transferred Shares free and clear of any
Encumbrance of any kind whatsoever.
3.2.3. Subsidiaries. The only subsidiary of eVentures is Merger
Sub and such subsidiary does not hold any assets, conducts any
business, or, prior to the execution hereof, have any liabilities or
obligations whatsoever.
3.2.4. Real Estate. Neither eVentures nor Merger Sub owns any real
estate or any interest in any real estate.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 10
eVENTURES GROUP, INC.
<PAGE> 16
3.2.5. Authority Relative to the Closing Documents,
Enforceability.
3.2.5.1. eVentures and Merger Sub have the requisite
corporate power and authority to execute and deliver the Closing
Documents and to consummate the Transactions. The execution and
delivery of the Closing Documents by eVentures and Merger Sub, and
the consummation by eVentures and Merger Sub of the Transactions,
have been duly authorized by the Boards of Directors or Managers
of each and no other corporate or other action on the part of
eVentures or Merger Sub is necessary to authorize the execution
and delivery by eVentures and Merger Sub of the Closing Documents
and the consummation by them of the Transactions. The Closing
Documents executed by eVentures and Merger Sub are the legal,
valid and binding obligations of eVentures and Merger Sub, as the
case may be, enforceable against them in accordance with their
respective terms, except insofar as the enforcement thereof may be
limited by the Insolvency/Equity Exceptions. All persons who
execute the Closing Documents on behalf of either eVentures or
Merger Sub have been duly authorized to do so.
3.2.5.2.The Principal Stockholder is not suffering from any
legal disability which would (a) prevent him from executing,
delivering or performing his obligations under the Closing
Documents or consummating the Transactions, (b) make such
execution, delivery, performance or consummation voidable or
subject to necessary ratification, and (c) require the signature
or consent of any third party in connection therewith for the
Transactions to be binding and enforceable against the Principal
Stockholder and his property. The Closing Documents have been duly
and validly executed and delivered by the Principal Stockholder
and each constitutes the legal, valid and binding obligation of
the Principal Stockholder, enforceable against him in accordance
with their respective terms, except insofar as the enforcement
thereof may be limited by the Insolvency/Equity Exceptions.
3.2.6. Title to Assets. eVentures has good and marketable title in
and to all of the assets and properties reflected in the most recent
eVentures Financial Statements, plus all assets and properties
purchased or acquired by eVentures since the date of that eVentures
Financial Statement, less all assets and properties which eVentures has
disposed of in the Ordinary Course of Business, which assets and
properties are free and clear of any Encumbrance.
3.2.7. Material Contracts. eVentures is not a party to or bound by
any agreement or contract that should properly be disclosed and/or
included as an exhibit to any of the eVentures SEC Documents.
3.2.8. Labor Matters. There are presently no employment or
consulting contracts with, or covenants against competition by, any
present or former employees of eVentures or Merger Sub. Neither
eVentures nor Merger Sub has any employees.
3.2.9. Compliance with Other Instruments; Consents. Neither the
execution of any Closing Document nor the consummation of the
Transactions will conflict with, violate or result in a breach or
constitute a default (or an event which, with notice or lapse of time
or both, would constitute a default), or result in a termination of, or
accelerate the performance required by, or result in the creation of
any Encumbrance upon any assets of eVentures or Merger Sub under any
provision of the Certificate of Incorporation or Organization, Bylaws,
Regulations, indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, decree, statute, ordinance, regulation or
any other restriction of any kind or character to which eVentures or
Merger Sub is bound.
3.2.10. Financial Statements.
3.2.10.1. eVenture's audited financial statements (the
"eVENTURES FINANCIAL Statements") for the years ended April 30,
1997, 1998 and 1999 and unaudited quarterly financial statements
for the three month period ended July 31, 1999, copies of which
have been delivered to
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 11
eVENTURES GROUP, INC.
<PAGE> 17
IEOH, the IEOH Stockholders, the Purchasers and the Contributing
Persons, are true and complete in all material respects, and have
been prepared in accordance with GAAP for the period covered by
such statements, and fairly present, in accordance with GAAP, the
properties, assets and financial condition of eVentures, and
results of its operations as of the dates and for the periods
covered thereby. eVentures maintains a system of internal
accounting controls sufficient to provide reasonable assurance
that (a) transactions are executed with management's
authorizations, (b) transactions are recorded as necessary to
permit preparation of financial statements in accordance with GAAP
and to maintain accountability for assets, (c) access to assets is
permitted only in accordance with management's authorizations and
(d) the recorded accountability for assets if compared with
existing assets at reasonable intervals and appropriate action is
taken with respect to any difference. eVentures has not engaged in
any transaction, maintained any bank account or used any corporate
funds except for transactions, bank accounts or funds which have
been and are reflected in the normally maintained books and
records. There has been no material adverse change in the business
operations, assets, properties, prospects or condition (financial
or otherwise) of eVentures, taken as a whole, from that reflected
in the eVentures Financial Statements.
3.2.10.2. As of the date hereof, eVentures does not have
any debts, liabilities or obligations of any nature, whether
accrued, absolute, unmatured, contingent, or otherwise, whether
due or to become due, that are not fully reflected in the
eVentures Financial Statements.
3.2.11. Litigation. There are no legal, administrative,
arbitration or other proceedings or claims pending against eVentures or
Merger Sub, nor is eVentures or Merger Sub subject to any existing
judgment which might affect the financial condition, business, property
or prospects of eVentures or Merger Sub; nor has eVentures received any
inquiry from an agency of the federal or of any state or local
government about the Transactions, or about any violation or possible
violation of any law, regulation or ordinance affecting its business or
assets.
3.2.12. Brokerage. No broker or finder has rendered services to
eVentures in connection with the Transactions.
3.2.13. Permits. eVentures does not have any Permits nor is it
required to maintain any Permits.
3.2.14. SEC Documents. eVentures has furnished or made available
to IEOH, the IEOH Stockholders, the Purchasers and the Contributing
Persons with a true and complete copy of each report, schedule,
registration statement and proxy statement filed by eVentures with the
SEC since January 1, 1987 (as such documents have since the time of
their filing been amended, the "eVENTURES SEC Documents"), a list of
which is attached as Schedule 3.2.14. eVentures has timely filed with
the SEC all documents required to have been filed pursuant to the
Securities Act and Section 15(d) of the Exchange Act. As of their
respective dates, the eVentures SEC Documents complied in all material
respects with the requirements of the Securities Act, or the Exchange
Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such eVentures SEC Documents, and none of the
eVentures SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of eVentures included in the eVentures SEC Documents comply
as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC
with respect thereto; are accurate, complete and in accordance with the
books and records of eVentures; have been prepared in accordance with
GAAP (except as may be indicated in the notes thereto or, in the case
of the unaudited statements, as permitted by Form 10-Q of the SEC) and
fairly present (subject, in the case of the unaudited statements, to
normal, recurring audit adjustments) the financial position of
eVentures as and at the dates thereof and the results of its operations
and cash flows for the periods then ended.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 12
eVENTURES GROUP, INC.
<PAGE> 18
3.2.15. Absence of Certain Changes or Events. Since the date of
the latest eVentures Financial Statements and except for the Proposed
Placement or as disclosed otherwise herein, eVentures has not (a)
issued or sold any promissory note, stock, bond, option or other
security of which it was an issuer or other obligor, (b) discharged or
satisfied any Encumbrance or paid any obligation or liability, whether
absolute or contingent, direct or indirect, (c) incurred or suffered to
be incurred any liability or obligation whatsoever, (d) caused or
permitted any Encumbrance to be created or arise on or in any of its
properties or assets, (e) declared or made any dividend, payment or
distribution to stockholders or purchased or redeemed or agreed to
purchase or redeem any shares of its capital stock, (f) reclassified
its shares of capital stock, (g) acquired any equity interest in any
other entity, or (h) entered into any agreement or transaction except
in connection with the execution and performance of this Agreement.
Neither eVentures nor Merger Sub has entered into any agreement to do
any of the foregoing action described in this Section 3.2.15.
3.2.16. Taxes.
3.2.16.1. eVentures and Merger Sub either (a) have timely
filed with the appropriate taxing authority all Tax and
information returns required to have been filed by either
eVentures or Merger Sub or (b) have timely filed for any required
extensions with regard to such returns. All Taxes of either
eVentures or Merger Sub have been paid (or estimated Taxes have
been deposited) to the extent such payments are required prior to
the date hereof or accrued on the books of eVentures. The returns
were correct when filed.
3.2.16.2. There are no pending investigations of either
eVentures or Merger Sub concerning any Tax returns by any federal,
state or local Taxing authority, and there are no federal, state,
local or foreign Tax liens upon any of eVenture's or Merger Sub's
assets.
3.2.17. Compliance with Law and Government Regulations. eVentures
and Merger Sub are in compliance with, and are not in violation of,
applicable federal, state, local or foreign statutes, laws and
regulations (including without limitation, any applicable
environmental, building, zoning or other law, ordinance or regulation)
affecting eVentures, Merger Sub or either of its properties or the
operation of its businesses. eVentures and Merger Sub are not subject
to any order, decree, judgment or other sanction of any court,
administrative agency or other tribunal.
3.2.18. Trade Names and Rights. eVentures does not use any trade
mark, service mark, trade name, or copyright in its business, nor does
it own any trade marks, trade mark registrations or applications, trade
names, service marks, copyrights, copyright registrations or
applications. Except as set forth on Schedule 3.2.18, no person owns
any trade mark, trade mark registration or application, service mark,
trade name, copyright or copyright registration or application, the use
of which is necessary or contemplated in connection with the operation
of eVenture's business.
3.2.19. No Disqualifying Orders. Neither eVentures, Merger Sub,
the Principal Stockholder nor any of their affiliates, directors,
officers or principals is subject to any disqualifying order under the
"Bad Boy" provisions of the federal or any state's securities law. As
used herein, "Bad Boy" provisions include Rule 262 of Regulation A,
Rule 507 of Regulation D and other similar disqualifying provisions of
federal and state securities laws.
3.2.20. Bank Accounts. eVentures and Merger Sub maintain only the
bank accounts listed on Schedule 3.2.20 hereto.
3.2.21. HSR. Immediately prior to the Closing, the "Person" (as
defined in the regulations issued by the Federal Trade Commission under
the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended)
within which eVentures is included will have total assets (as shown on
its last regularly prepared
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 13
eVENTURES GROUP, INC.
<PAGE> 19
balance sheet) and annual net sales (as shown on its last regularly
prepared annual statement of income and expenses) of less than $10
million.
3.2.22. Transactions with Affiliates. Except as set forth on
Schedule 3.2.22 hereto, neither (a) any director or officer of
eVentures or Merger Sub, nor (b) the Principal Stockholder (or any
member of their immediate family) nor (c) any Affiliate of either of
the foregoing, in each such case either (i) is a party to any contract
or other business arrangement or relationship of any kind with
eVentures, or (ii) has an ownership interest in any business (corporate
or otherwise) that is a party to, or in any property that is the
subject of, business arrangements or relationships of any kind with
eVentures (such arrangements, relationships or agreements listed in
Schedule 3.2.22 being referred to as "AFFILIATE AGREEMENTS").
3.2.23. Stock Price Manipulation. Neither eVentures nor the
Principal Stockholder has taken (and none will take), directly or
indirectly, any action designed to or that would reasonably be expected
to cause or result in stabilization or manipulation of the price of the
eVentures Stock.
3.2.24. Nasdaq SmallCap Market Eligibility. eVentures currently
meets all eligibility requirements for listing on the Nasdaq Stock
Market's SmallCap Market ("NASDAQ-SCM") except for such provisions
requiring a minimum stockholder equity or minimum stock price for
continued trading on the Nasdaq-SCM. eVentures shall take all necessary
action to continue to maintain its eligibility for listing on the
Nasdaq-SCM.
3.2.25. Investment Company Act. eVentures is not, and upon
completion of the Transactions will not be, subject to registration as
an investment company under the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder.
3.2.26. Integration. eVentures has not offered, sold or issued any
shares of eVentures Stock during the six-month period preceding the
Closing Date.
3.2.27. SEC Correspondence. eVentures has not received any oral or
written communication from the SEC concerning eVentures or its status
as a "public-company."
3.2.28. Full Disclosure. None of the representations and
warranties made by eVentures, Merger Sub or the Principal Stockholder
herein, or in any Closing Document furnished or to be furnished by them
hereunder contains or will contain any untrue statement of material
fact, or omits any material fact, the omission of which would be
misleading.
3.3. REPRESENTATIONS AND WARRANTIES OF INFINITY. Infinity hereby
represents and warrants to eVentures that:
3.3.1. Organization of Infinity. Infinity is a business
corporation under the laws of the Island of Nevis, West Indies which
was statutorily dissolved on June 14, 1999, and is currently in a phase
of winding-up its affairs under applicable provisions of Nevis Law.
3.3.2. Authorization. Pursuant to that Plan of Liquidation
approved by the Board of Directors of Infinity, Infinity has the
requisite corporate power and authority to execute and deliver the
Closing Documents and to consummate the Transactions. The Closing
Documents executed by Infinity are the legal, valid and binding
obligations of Infinity, enforceable against Infinity in accordance
with their respective terms, except insofar as its enforcement may be
limited by the Insolvency/Equity Exceptions. All persons who execute
the Closing Documents on behalf of Infinity have been duly authorized
to do so.
3.3.3. Title to Assets. Infinity has good and marketable title in
and to the Contributing Persons' Assets owned by Infinity free and
clear of any Encumbrance.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 14
eVENTURES GROUP, INC.
<PAGE> 20
3.3.4. Brokerage. No broker or finder has rendered services to
Infinity in connection with the Transactions.
3.4. REPRESENTATIONS AND WARRANTIES OF CONTRIBUTING PERSONS (OTHER THAN
INFINITY). Each Contributing Persons (other than Infinity), on his or its own
behalf but not on behalf of the other Contributing Persons, hereby represent and
warrant to eVentures that:
3.4.1. Authorization. Each of the Contributing Persons has the
requisite power and authority to execute and deliver the Closing
Documents and to consummate the transactions. The Closing Documents
executed by each of the Contributing Persons are the legal, valid and
binding obligations of each of the respective Contributing Persons,
enforceable against each of the respective Contributing Persons in
accordance with their respective terms, except insofar as its
enforcement may be limited by the Insolvency/Equity Exceptions.
3.4.2. Title to Assets. Each Contributing Persons has good and
marketable title in and to the Contributing Person's Assets owned by
each respective Contributing Person, free and clear of any Encumbrance.
3.4.3. Axistel Contributions. For each Contributing Person that is
a shareholder of Axistel, the Contributed Assets include all equity
interests in, or options or other rights to acquire equity interests
in, Axistel held by such Contributing Person, other than any options
that are being exchanged for options to acquire shares of common stock
of eVentures as provided in Section 5.4.5.
ARTICLE IV.
ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES
4.1. FILING WITH SECURITIES AND EXCHANGE COMMISSION. The parties
recognize that eVentures may report the Transactions to the SEC on Form 8-K, and
agree to cooperate in the preparation and filing of such report or any other
filings to be filed with the SEC.
4.2. BROKERS OR FINDERS. Each party agrees to hold the others harmless
and to indemnify them against the claims of any persons or entities claiming to
be entitled to any brokerage commission, finder's fee, advisory fee or like
payment from such other party based upon actions of the indemnifying party in
connection with the Transactions.
ARTICLE V.
CLOSING DELIVERIES
5.1. THE CLOSING. The Closing shall take place upon the execution of
this Agreement by all parties and the delivery of the items to be delivered at
Closing by each party hereto (unless such delivery has been waived by the
party(ies) to have received such closing item), at the offices of Arter & Hadden
LLP, 1717 Main Street, Suite 4100, Dallas, Texas 75201.
5.2. DELIVERIES BY eVENTURES AND THE PRINCIPAL STOCKHOLDER. eVentures,
Merger Sub and the Principal Stockholder hereby deliver to IEOH, the Purchasers
and each of the Contributing Persons, as applicable, the following items:
5.2.1. Certified Resolutions. To IEOH, each Purchaser and each
Contributing Person, copies of the resolutions, certified by the Secretary or an
Assistant Secretary of eVentures and Merger Sub, as applicable, dated on or
before the date hereof (a) of the Board of Directors or Managers of eVentures or
Merger Sub, as applicable, (i) authorizing the execution of this Agreement and
the consummation of the transactions and other acts contemplated by this
Agreement, (ii) adopting the Amended and Restated Bylaws of eVentures in the
form attached as Appendix E, (iii) duly electing the persons set forth on
Schedule 5.2.1 to serve as directors of eVentures upon the
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 15
eVENTURES GROUP, INC.
<PAGE> 21
Closing, (iv) adopting the 1999 Stock Option Plan of eVentures in the form
attached hereto as Appendix D (the "1999 OPTION PLAN"), (v) authorizing the
option grants under the 1999 Option Plan to the persons listed on Schedule 5.2.1
upon the Closing; and (vi) authorizing, recommending and approving the Merger,
and (b) of the Principal Stockholder of eVentures and members of Merger Sub, as
applicable, (i) authorizing the Merger and (ii) adopting and approving the 1999
Option Plan.
5.2.2. Charter Documents. To IEOH, each Purchaser and each
Contributing Person, copies of (a) the Certificate of Incorporation of eVentures
(as amended to authorize the issuance of "blank check" preferred shares) and
Certificate of Formation of Merger Sub, each certified by the Secretary of State
of Delaware, (b) the Amended and Restated Bylaws of eVentures in the form
attached as Appendix E and as adopted by the Board of Directors of eVentures,
and the regulations or operating agreement of Merger Sub, each certified by the
Secretary or an Assistant Secretary of eVentures or Merger Sub, as applicable,
and (c) good standing certificates and certificates of existence from the
Secretary of State of Delaware, evidencing that eVentures and Merger Sub are in
existence and in good standing under the laws of the State of Delaware.
5.2.3. Account Transfer Documents. To Purchasers, all such
instruments as may be necessary to authorize persons identified on Schedule
5.2.3 to become a signatory on the eVentures' bank account listed on Schedule
3.2.20.
5.2.4. Registration Rights Agreement. To each IEOH Stockholder,
Purchaser and Contributing Person, the Registration Rights Agreement in the form
attached as Exhibit C, executed by eVentures.
5.2.5. Transferred Shares. To each Purchaser, certificates
representing the Transferred Shares, with stock powers duly endorsed in blank,
representing the Transferred Shares that each Purchaser is entitled to receive
as set forth on Schedule 1-A.
5.2.6. Merger Shares. Upon the delivery to eVentures of a duly
executed Letter of Transmittal by an IEOH Stockholder (which Letter of
Transmittal may be presented at Closing), together with the IEOH Certificates,
certificates representing the number of shares of eVentures Stock such IEOH
Stockholder is entitled to receive pursuant to Section 2.5.1.1.
5.2.7. Additional Shares. To each Contributing Person, the number
of shares of eVentures Stock to be issued to such Contributing Person as set
forth in Schedule 1-B, upon the delivery of the consideration to be provided by
such Contributing Person set forth in Schedule 1-B.
5.2.8. Certificate of Merger. The certificate or articles of
Merger to be filed with the Registrar of Companies of the Island of Nevis, and
the Secretary of State of Delaware, executed by Merger Sub.
5.2.9. Resignations. A copy of the resignation of the existing
director and officers of eVentures.
5.3. DELIVERIES BY PURCHASERS. Each Purchaser hereby delivers to the
Principal Stockholder and eVentures, as applicable, the following items:
5.3.1. Corporate Approvals. To the Principal Stockholders, copies
of the resolutions of the Board of Directors of each Purchaser that is a
corporation, dated on or before the date hereof, authorizing the execution,
delivery and performance of this Agreement, the terms of the Stock Purchase and
the transactions contemplated in connection therewith, in each case certified by
the Secretary or an Assistant Secretary of each such Purchaser.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 16
eVENTURES GROUP, INC.
<PAGE> 22
5.3.2. Purchase Price. To the Principal Stockholder, each
Purchaser's pro rata portion of the Purchase Price, by wire transfer to the
account set forth on Schedule 5.3.2, or by check payable to the order of the
Principal Stockholder.
5.3.3. Investment Letter. To eVentures and the Principal
Stockholder, an Investment Letter, executed by each Purchaser.
5.3.4. Stockholder Consent. To eVentures, a stockholder consent in
the form attached as Appendix F, evidencing such Purchaser's approval,
authorization and ratification of the 1999 Stock Option Plan.
5.4. DELIVERIES BY CONTRIBUTING PERSONS. Each Contributing Person
hereby delivers to eVentures the following items:
5.4.1. Corporate Approvals. Copies of the resolutions of the Board
of Directors of each Purchaser that is a corporation, dated on or before the
date hereof, authorizing the execution, delivery and performance of this
Agreement, the terms of Asset Purchase and the transactions contemplated in
connection therewith, in each case certified by the Secretary or an Assistant
Secretary of each such Contributing Person.
5.4.2. Contributing Persons' Assets. The Contributing Persons'
Assets to be contributed by each Contributing Person as set forth on Schedule
1-B attached hereto. To the extent that any Contributing Persons' assets consist
of cash, such amounts shall be payable to eVentures by wire transfer to the
account set forth in Schedule 5.4.2. To the extent that any Contributing
Persons' Assets consist of shares of stock or other securities, the certificate
evidencing such security shall be delivered to eVentures, together with stock
powers, duly endorsed, to eVentures. To the extent that the Contributing
Person's assets consist of notes or similar instruments, the original such
instruments shall be delivered to eVentures, together with an endorsement
thereon or an allonge thereto endorsing such instrument to the order of
eVentures.
5.4.3. Axistel Books and Records. The Contributing Persons who are
shareholders of Axistel shall cause the books and records of Axistel to be
delivered to eVentures.
5.4.4. [RESERVED]
5.4.5. Axistel Options. The Contributing Persons who are
shareholders of Axistel hereby agree that all option plans and convertible
securities of Axistel that remain unexercised as of the date of this Agreement
are hereby exchanged by the Contributing Persons set forth on Schedule 5.4.5 for
options, to purchase the number of shares of eVentures at the price and subject
to the vesting schedule set forth in Schedule 5.4.5.
5.4.6. [RESERVED]
5.4.7. Investment Letter. An Investment Letter, executed by each
Contributing Person.
5.4.8. Letter of Transmittal. For each Contributing Person that is
contributing securities to eVentures, a Letter of Transmittal, executed by each
Contributing Person.
5.4.9. Registration Rights Agreement. A Registration Rights
Agreement, executed by each Contributing Person.
5.4.10. Stockholder Consent. A written consent in the form
attached as Appendix F evidencing such Contributing Person's approval,
authorization and ratification of the 1999 Stock Option Plan.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 17
eVENTURES GROUP, INC.
<PAGE> 23
5.5. DELIVERIES BY IEOH. IEOH hereby delivers to eVentures the
following items:
5.5.1. Necessary Corporate Approvals. Copies of the resolutions of
the Board of Directors of IEOH, dated on or before the date hereof, authorizing
the execution, delivery and performance of this Agreement by IEOH and
recommending; adopting and approving the Merger as fair to and in the best
interests of an IEOH Stockholder, certified by the Secretary or an Assistant
Secretary of IEOH.
5.5.2. Redemption of IEOH Management Share. Evidence reasonably
satisfactory to eVentures that the IEOH Management Share has been redeemed.
5.5.3. Investment letter. The Investment letter, executed by each
IEOH Stockholder.
5.5.4. Registration Rights Agreement. The Registration Rights
Agreement, executed by each IEOH Stockholder.
5.5.5. Letter of Transmittal. The Letter of Transmittal, executed
by each IEOH Stockholder.
5.5.6. Stockholder Consent. A written consent in the form attached
as Appendix F evidencing each IEOH Stockholder's approval, authorization and
ratification of 1999 Stock Option Plan.
5.5.7. Certificate of Merger. The certificate or articles of
merger to be filed with the registrar of Companies of the Island of Nevis and
the Secretary of State of Delaware, executed by IEOH.
5.6. OTHER DELIVERIES. In connection with the Transactions, eVentures
shall deliver the following items to the following persons:
5.6.1. Stock Options. To the persons listed on Schedule 5.2.1,
Option Agreements evidencing the grant of the options set forth in Schedule
5.2.1.
5.6.2. Employment Agreements. To each of the persons listed on
Schedule 5.6.2, Employment Agreements in a form reasonably satisfactory to each
such person, eVentures and Infinity.
5.6.3. Repayment of Axistel Indebtedness. If upon the Closing
eVentures has received $3.0 million or more in cash contributions for the
purchase of equity securities of eVentures, eVentures shall cause Axistel to
repay the $750,000 loan to Axistel from Infinity Emerging Holdings Subsidiary
Limited.
5.7. INFINITY CONTRIBUTION. On or before 5:00 p.m. on September 28,
1999, Infinity shall contribute to eVentures an amount of cash equal to no less
than (a) $2 million, minus (b) the amount of cash contributed to eVentures prior
to such time, and shall receive in exchange for such contribution shares of
eVentures Common Stock at $2.00 per share.
ARTICLE VI.
SURVIVAL OF REPRESENTATIONS AND INDEMNIFICATION
6.1. REPRESENTATIONS TO SURVIVE CLOSING. The representations and
warranties of eVentures, Merger Sub, the Principal Stockholder, each Purchaser
and each Contributing Person contained herein or in any document furnished
pursuant hereto shall survive the Closing of the Transaction. Each party
acknowledges and agrees that, except as expressly set forth in this Agreement or
any Closing Document, no party has made (and no party is relying on) any
representation or warranties of any nature, express or implied, regarding any or
relating to any of the transactions contemplated by this Agreement.
6.2. INDEMNIFICATION. The Principal Stockholder and eVentures,
jointly and severally, agree to and do hereby indemnify, and agree to defend and
hold the Purchasers, the Contributing Persons, the IEOH Stockholders
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 18
eVENTURES GROUP, INC.
<PAGE> 24
and their respective directors, officers, employees, fiduciaries, agents and
affiliates, and each other person, if any, who controls such persons, harmless
against any claims, actions, suits, proceedings, investigations, losses,
expenses, damages, obligations, liabilities, judgments, fines, fees, costs and
expenses (including costs and reasonable attorneys' fees) and amounts paid in
settlement of any pending, threatened or completed claim, action, suit,
proceeding or investigation (collectively "LOSS" or "LOSSES") which arise or
result from or are related to (i) any breach or failure of eVentures, Merger Sub
or the Principal Stockholder to perform any of their covenants or agreements set
forth herein or in the Closing Documents or (ii) the inaccuracy of any
representation or warranty made by the Principal Stockholder, eVentures or
Merger Sub contained herein or in the Closing Documents.
6.3. ENFORCEMENT OF INDEMNIFICATION RIGHTS.
6.3.1. Notification. Any person or entity seeking enforcement of
indemnification rights hereunder shall notify each potentially liable
person or entity of (a) any payment made in respect of any liability,
obligation or claim to which the foregoing indemnity applies, (b) any
Loss which such person or entity may sustain or incur, to which the
foregoing indemnity relates, and (c) any claim made or suit filed
against such person or entity or this Agreement. Such notification
shall include a specific demand for indemnification and defense if such
person or entity wishes to assert his or its indemnification rights
hereunder.
6.3.2. Disputes. If there is any dispute as to the right to
indemnification and defense hereunder, the disputing party shall give
the other party written notice of such dispute, specifying in detail
the basis of the dispute, not later than 20 days after receipt of
demand for indemnification.
6.3.3. Time Limit. If there is no dispute as to the right to
indemnification with respect to any such demand within such 20 day
period, or upon resolution of any such dispute by the parties or by a
court, the person or entity entitled to indemnification shall be
promptly paid the amount of such demand, the amount agreed to by the
parties or the amount ordered by a court.
6.3.4. Litigation Procedure. If a party entitled to be indemnified
pursuant to this Article VI notifies the other party of the
commencement of an action against it, the party obligated to provide
indemnification will be entitled, at his or its own expense, to (a)
participate in, and (b) except in the case of a claim that relates to a
tax liability, assume the defense of the action. If the indemnifying
party wishes to assume the defense of that action, counsel selected by
the indemnifying party shall be reasonably satisfactory to the
indemnified party, and the indemnified party shall cooperate in all
reasonable respects, at its cost and expense, with the indemnifying
party and such counsel in the investigation and defense of such action
and any appeal arising therefrom. After the indemnifying party shall
notify the indemnified party of its election to assume the defense of
any such action, the indemnifying party will not be liable to the
indemnified party under this Article VI for any legal fees or other
expense subsequently incurred by the indemnified party in connection
with the defense thereof. Even if the indemnifying party should assume
the defense of any such actions, the indemnified party shall have the
right at its expense to participate in the defense thereof. If the
indemnifying party assumes the defense of any such actions, it shall
not settle or otherwise compromise any such action without the prior
written consent of the indemnified party. If the indemnifying party
should fail or refuse to assume the defense of any such action, the
indemnifying party shall jointly and severally reimburse the
indemnified party for the fees and expenses of counsel engaged by it to
defend that action.
6.3.5. Waiver of Rights of Contribution or Similar Rights. The
Principal Stockholder hereby waives any rights of contribution or
similar rights against eVentures arising from claims made against the
Principal Stockholder arising hereunder, notwithstanding that any such
liability or obligation is to be "joint and several" hereunder.
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 19
eVENTURES GROUP, INC.
<PAGE> 25
6.4. REMEDIES CUMULATIVE. Persons or entities entitled to
indemnification hereunder shall be entitled to such indemnification from time to
time and shall be entitled to rely upon one or more provisions of this Agreement
without waiving its right to rely upon any other provisions at the same time or
any other time.
ARTICLE VII.
MISCELLANEOUS
7.1. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed delivered if delivered by
hand, by telecopier, by courier or mailed by certified or registered mail,
postage prepaid, addressed as follows:
IF TO eVENTURES OR THE PRINCIPAL STOCKHOLDER:
eVentures Group, Inc.
Attn: Danny Wettreich
6959 Arapaho, Suite 122
Dallas, Texas 75248
Tel: (972) 386-8907
Fax No.: (972) 239-8581
IF TO IEOH OR INFINITY:
c/o Loughran & Co.
Attn: J. A. Loughran
38 Hertford Street
London WIY 7IG
ENGLAND
Tel.: 0171-355-2051
Fax No.: 0171-355-4975
with copy to:
Arter & Hadden L.L.P.
Attn: Victor B. Zanetti, Esq.
1717 Main Street, Suite 4100
Dallas, Texas 75201
Fax No.: 214.741.7139
IF TO THE PURCHASERS:
To the address set forth below each Purchaser's name on
Schedule 1-A hereto.
IF TO THE CONTRIBUTING PERSONS (OTHER THAN INFINITY):
To the address set forth below each Contributing Person's name
on Schedule 1-B hereto.
7.2. ASSIGNABILITY AND PARTIES IN INTEREST. This Agreement shall not be
assignable by any of the parties hereto without the consent of all other parties
hereto. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors. Nothing in this Agreement is
intended to confer, expressly or by implication, upon any other person any
rights or remedies under or by reason of this Agreement.
7.3. EXPENSES. Each party shall, except as otherwise specifically
provided, bear its own expenses and costs, including the fees of any attorney
retained by it, incurred in connection with the preparation of the Closing
Documents and consummation of the Transactions.
7.4. GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Texas. Each of the
parties hereto consents to the personal jurisdiction of
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 20
eVENTURES GROUP, INC.
<PAGE> 26
the federal and state courts in the State of Texas in connection with any action
arising under or brought with respect to this Agreement.
7.5. COUNTERPARTS. This Agreement may be executed as of the same
effective date in one or more counterparts, each of which shall be deemed an
original.
7.6. HEADINGS. The headings and subheadings contained in this Agreement
are included solely for ease of reference, and are not intended to give a full
description of the contents of any particular Section and shall not be given any
weight whatever in interpreting any provision of this Agreement.
7.7. PRONOUNS, ETC. Use of male, female and neuter pronouns in the
singular or plural shall be understood to include each of the other pronouns as
the context requires. The word "and" includes the word "or". The word "or" is
disjunctive but not necessarily exclusive.
7.8. COMPLETE AGREEMENT. This Agreement, the Appendices hereto, and the
documents delivered pursuant hereto or referred to herein or therein contain the
entire agreement between the parties with respect to the Transaction and, except
as provided herein, supersede all previous negotiations, commitments and
writings.
7.9. MODIFICATIONS, AMENDMENTS AND WAIVERS. This Agreement shall not be
modified or amended except by a writing signed by each of the parties hereto.
Prior to the Closing, either eVentures or the IEOH may amend any of the
disclosure schedules referenced herein by giving the other party notice of such
amendments. If such amended disclosures reveal material adverse information
about the party making the change, the recipient of the information may
terminate this Agreement without liability to the other party.
7.10. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the Transactions is not affected in any manner adverse to any party hereto. Upon
any such determination that any term or other provision is invalid, illegal, or
incapable of being enforced, the parties hereto will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in any acceptable manner to the end that the Transactions
are consummated to the extent possible.
[SIGNATURE PAGES FOLLOWS]
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 21
eVENTURES GROUP, INC.
<PAGE> 27
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
eVENTURES:
eVENTURES GROUP, INC.
By: /s/ DANNY WETTREICH
------------------------------------
Name: Danny Wettreich
----------------------------------
Title: President
---------------------------------
MERGER SUB:
eVENTURES HOLDINGS, L.L.C.
By: /s/ DANNY WETTREICH
------------------------------------
Name: Danny Wettreich
----------------------------------
Title:
---------------------------------
IEOH:
IEO HOLDINGS LIMITED
By: /s/ JOHN A. BROOKS
------------------------------------
Name: John A. Brooks
----------------------------------
Title: President
---------------------------------
INFINITY:
INFINITY INVESTORS LIMITED
By: /s/ JOHN A. LOUGHRAN
------------------------------------
Name: John A. Loughran
----------------------------------
Title: Director
---------------------------------
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 22
eVENTURES GROUP, INC.
<PAGE> 28
Continued from page 22
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PRINCIPAL STOCKHOLDER:
/s/ MICK Y. WETTREICH
----------------------------------------
MICK Y. WETTREICH, individually
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AGREEMENT AND PLAN OF REORGANIZATION - PAGE 23
eVENTURES GROUP, INC.
<PAGE> 29
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
EVENTURES GROUP, INC., EVENTURES HOLDINGS, L.L.C., IEO HOLDINGS LIMITED,
INFINITY INVESTORS LIMITED, MICK Y. WETTREICH, THE PURCHASERS LISTED ON SCHEDULE
1-A, AND THE CONTRIBUTING PERSONS LISTED ON SCHEDULE 1-B HERETO
PURCHASERS:
INFINITY INVESTORS LIMITED
By: /s/ JAMES A. LOUGHRAN
------------------------------------
Name: James A. Loughran
----------------------------------
Title: Director
---------------------------------
INFINITY EMERGING SUBSIDIARY LIMITED
By: /s/ PIERCE LOUGHRAN
------------------------------------
Name: Pierce Loughran for Dungate
Limited
----------------------------------
Title: Director
---------------------------------
IEO INVESTMENTS LIMITED
By: /s/ PIERCE LOUGHRAN
NAME: Pierce Loughran for Dungate Ltd.
TITLE: Director
By: /s/ STUART J. CHASANOFF
------------------------------------
Name: Stuart J. Chasanoff
----------------------------------
By: /s/ STEVEN R. LOGLISCI
------------------------------------
Name: Steven R. Loglisci
----------------------------------
By: /s/ TREVOR L. HUFFARD
------------------------------------
Name: Trevor L. Huffard
----------------------------------
CONTRIBUTING PERSONS:
INFINITY INVESTORS LIMITED
By: /s/ JAMES A. LOUGHRAN
------------------------------------
Name: James A. Loughran
----------------------------------
Title: Director
---------------------------------
By: /s/ MITCHELL C. ARTHUR
------------------------------------
Name: Mitchell C. Arthur
----------------------------------
By: /s/ WILLIAM S. CARROLL
------------------------------------
Name: William S. Carroll
----------------------------------
By: /s/ MICHAEL S. FISCUS
------------------------------------
Name: Michael S. Fiscus
----------------------------------
By: /s/ ANNETTE DICKSON
------------------------------------
Name: Annette Dickson
----------------------------------
By: /s/ SAMUEL LITWIN
------------------------------------
Name: Samuel Litwin
----------------------------------
By: /s/ CHARLES S. MURDOCK IV
------------------------------------
Name: Charles S. Murdock IV
----------------------------------
By: /s/ TOM BAINBRIDGE
------------------------------------
Name: Tom Bainbridge
----------------------------------
By: /s/ KEITH OSER
------------------------------------
Name: Keith Oser
----------------------------------
By: /s/ KEVIN J. LIDDY
------------------------------------
Name: Kevin J. Liddy
----------------------------------
By: /s/ JOHN S. ROBLING, JR.
------------------------------------
Name: John S. Robling, Jr.
----------------------------------
By: /s/ DANIEL E. STRYKER, JR.
------------------------------------
Name: Daniel E. Stryker, Jr.
----------------------------------
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION - PAGE 24
eVENTURES GROUP, INC.
<PAGE> 30
SCHEDULE 1-A
LIST OF PURCHASERS, PURCHASE PRICE AND SHARE ALLOCATION
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON
STOCK, $0.00002 PAR VALUE, IN
NAME OF PURCHASER eVENTURES GROUP, INC., PURCHASED
(ADDRESS) FROM MICK Y. WETTREICH
<S> <C> <C>
1. Stuart Chasanoff 45,000 shares
6528 Mimosa Lane
Dallas, Texas 75230
2. Steve Loglisci 150,000 shares
eVolve Technology
2920 N. Green Valley Parkway
Building 3 Suite 321
Henderson, NV 89014
3. Trevor Huffard 50,000 shares
17 West 71st Street, Apt. 1B
New York, NY 10023
4. IEOH Shareholders:
IEO Investments Limited 3,422,552 shares
("IEOIL")
Infinity Emerging Subsidiary 2,515,255 shares
Limited ("IESL")
c/o Loughran & Co.
38 Hertford Street
London W1Y 7TG
ENGLAND
---------
Total 5,937,807 shares
5. Infinity Investors Limited 2,317,193 shares
c/o Loughran & Co.
38 Hertford Street
London W1Y 7TG
ENGLAND
---------
TOTAL 8,500,000 shares
=========
</TABLE>
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 31
SCHEDULE 1-B
LIST OF CONTRIBUTING PERSONS, CONTRIBUTED ASSETS AND SHARE ALLOCATIONS
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON STOCK,
PAR VALUE $0.00002 IN eVENTURES
ASSETS CONTRIBUTED TO eVENTURES GROUP, GROUP, INC., RECEIVED BY
NAMES OF CONTRIBUTING PERSONS INC., IN ASSET SALE CONTRIBUTING PERSON
----------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
1. Infinity Investors Limited a. 1,200 shares of stock in e.Volve;
c/o Loughran & Co. b. Warrant No. 1; and
38 Hertford Street c. 50% interest in the Debentures. 5,682,807 shares
London W1Y 7TG
ENGLAND
2. Samuel L. Litwin 500 shares of stock in Axistel 2,000,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
3. Mitchell C. Arthur 500 shares of stock in Axistel 2,000,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
4. Michael Fiscus 500 shares of stock in Axistel 2,000,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
5. Steve Robling 30 shares of stock in Axistel 120,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
6. Thomas Bainbridge 30 shares of stock in Axistel 120,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
7. William Carroll 15 shares of stock in Axistel 60,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
8. Annette Dickson 3.75 shares of stock in Axistel 15,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
9. Charles Murdock 7.5 shares of stock in Axistel 30,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
</TABLE>
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 32
<TABLE>
<CAPTION>
NUMBER OF SHARES OF COMMON STOCK,
PAR VALUE $0.00002 IN eVENTURES
ASSETS CONTRIBUTED TO eVENTURES GROUP, GROUP, INC., RECEIVED BY
NAMES OF CONTRIBUTING PERSONS INC., IN ASSET SALE CONTRIBUTING PERSON
----------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
10. Keith Oser 3.0 shares of stock in Axistel 12,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
11. Daniel E. Stryker, Jr. 3.0 shares of stock in Axistel 12,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
12. Kevin Liddy 3.0 shares of stock in Axistel 12,000 shares
Axistel Communications, Inc.
One Evertrust Plaza, 8th Floor
Jersey City, NJ 07302
Total 12,063,807 shares
</TABLE>
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 33
SCHEDULE 2.3.5
OFFICERS OF SURVIVING ENTITY
Fred Vierra Chairman of the Board
Barrett Wissman President and Chief Executive Officer
Stuart Chasanoff Vice President, Chief Development Officer, General
Counsel and Secretary
Steve Robling Vice President, Chief Financial Officer and
Assistant Secretary
Sam Litwin Managing Director of Communications Holdings
Mitch Arthur Managing Director of Communications Holdings
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 34
SCHEDULE 3.1.3
IEOH INVESTMENTS
1. e.Volve
o 50% interest in the Debentures
o Warrant No. 2
o 1,200 shares of common stock (representing a 1/3 equity interest based
upon the outstanding common shares as of August 31, 1999)
2. Axistel
o One Class B Share convertible into one Class A Common Share of Axistel;
one Warrant exercisable for 1,449 Class A Common Shares for aggregate
consideration of $3.5 million (which, when exercised and combined with
the one Class B Share represents 50% of the outstanding common shares
as of August 31, 1999)
o $3.5 million principal balance promissory note
3. i2v2.com
o 1,832,880 common shares purchased for $2.1 million on June 25, 1999,
representing approximately 21% of the shares of outstanding common
stock on a "fully diluted" basis at the time of purchase, and believed
to represent approximately 17% of the outstanding common shares in a
"fully diluted" basis as of August 31, 1999.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 35
SCHEDULE 3.1.7
IEOH MATERIAL CONTRACTS
Debentures
Warrant No. 2
Securities Purchase Agreement between IEOH and i2v2.com and related
documentation executed in connection therewith
Securities Purchase Agreement between IEOH and Axistel and related
documentation executed in connection therewith
Securities Purchase Agreement between IEOH and Orix Global Communication, now
known as e.Volve Technology Group, Inc. and related documentation
executed in connection therewith
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 36
SCHEDULE 3.1.10
IOEH FINANCIAL STATEMENTS
Axistel Communications, Inc.
Balance Sheets as of December 31, 1998 (audited) and June 30, 1999 (unaudited).
Statements of Operations for the year ended December 31, 1998 (audited) and
six months ended June 30, 1999 (unaudited).
e.Volve Technology Group, Inc.
Balance Sheets as of May 31, 1998 (audited) and February 28, 1999 (unaudited).
Statements of Operations for the year ended May 31, 1998 (audited) and nine
months ended February 29, 1999 (unaudited).
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 37
SCHEDULE 3.2.14
eVENTURES SEC DOCUMENTS
(See Attached)
[ATTACH SEC FILING HISTORY]
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 38
SCHEDULE 3.2.18
eVENTURES EXCEPTIONS TO TRADE NAMES AND RIGHTS
eVentures understands that other persons may be using or assert rights
to the name eVentures or derivations thereof.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 39
SCHEDULE 3.2.20
eVENTURES BANK ACCOUNTS
North Dallas Bank & Trust, Preston Rd @ LBJ Frwy.
Account No. 3103785
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 40
SCHEDULE 3.2.22
eVENTURES AFFILIATE AGREEMENTS
Transfer Agent Agreement between eVentures, Inc. and Stock Transfer Company of
America, Inc. dated February 15, 1988.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 41
SCHEDULE 5.2.1
DIRECTORS OF eVENTURES UPON CLOSING; OPTION GRANTS
eVENTURES DIRECTORS UPON CLOSING
Fred Vierra
Clark Hunt
Barrett Wissman
Mark Graham
Olaf-Guerrand Hermes
eVENTURES STOCK OPTIONS/GRANTS
<TABLE>
<CAPTION>
Name Number Price
---- ------ -----
<S> <C> <C>
A. Stuart Chasanoff (500,000 total) 166,666 $ 2.50
166,667 $ 5.00
166,667 $ 7.50
B. Samuel L. Litwin 425,000 $ 10.00
C. Mitchell C. Arthur 425,000 $ 10.00
D Steve Robling 425,000 $ 10.00
E. New Grants to Existing Axistel Employees - 75,000 $ 2.50
see Schedule 5.4.5
Total 1,850,000
=========
</TABLE>
Options have 3 year vesting, with 1/3 vesting at the end of each
year.
Directors' Options
<TABLE>
<CAPTION>
Name Number Price
---- ------ -----
<S> <C> <C>
A. Fred Vierra (Chairman) 200,000 $ 10.00
B. Clark Hunt 100,000 $ 10.00
C. Barrett Wissman 100,000 $ 10.00
D. Mark Graham 100,000 $ 10.00
E. Olaf-Guerrand Hermes 100,000 $ 10.00
=======
600,000
[All are two year vesting, 50% at the end of each year]
Total Options
Employees 1,850,000
Directors 600,000
---------
2,450,000
=========
</TABLE>
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 42
SCHEDULE 5.2.3
AUTHORIZED SIGNATURES FOR eVENTURES' BANK ACCOUNTS
Barrett Wissman
Steve Robling
Stuart Chasanoff
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 43
SCHEDULE 5.3.2
WIRE TRANSFER INSTRUCTIONS FOR PRINCIPAL STOCKHOLDER
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 44
SCHEDULE 5.4.2
WIRE TRANSFER INSTRUCTIONS FOR INFINITY CONTRIBUTION
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 45
SCHEDULE 5.4.5
AXISTEL REPLACEMENT OPTIONS
<TABLE>
<CAPTION>
AXISTEL EMPLOYEE OPTION SHARES IN eVENTURES* EXERCISE PRICE
- ---------------- --------------------------- --------------
<S> <C> <C>
Annette Dickson 15,000 $2.50
William Carroll 60,000 $2.50
</TABLE>
* 3 year vesting, with 1/3 vested at end of each year.
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 46
SCHEDULE 5.6.2
PERSONS TO RECEIVE EMPLOYMENT AGREEMENTS UPON CLOSING
eVentures (new Agreements)
Stuart Chasanoff
Steve Robling
Axistel (Amendments to existing agreements)
Samuel L. Litwin
Mitchell C. Arthur
Michael Fiscus
e.Volve (none)
Existing Employment and Consulting Agreements continue unchanged
- --------------------------------------------------------------------------------
AGREEMENT AND PLAN OF REORGANIZATION
eVENTURES GROUP, INC.
<PAGE> 1
AMENDED AND RESTATED BYLAWS
OF
eVENTURES GROUP, INC
(FORMERLY KNOWN AS ADINA, INC.)
A DELAWARE CORPORATION
(THE "COMPANY")
ARTICLE I.
OFFICES
SECTION 1.1. REGISTERED OFFICE. The registered office of the Company in
the State of Delaware is located at The Prentice-Hall Corporation, 1013 Centre
Road, City of Wilmington, County of New Castle.
SECTION 1.2. PRINCIPAL OFFICE. The principal office of the Company
will be in One Evertrust Plaza, 8th Floor, Jersey City, NJ 07302 or at such
other place as the Board of Directors may from time to time determine.
SECTION 1.3. OTHER OFFICES. The Company may also have offices at such
other places as the Board of Directors may from time to time determine or the
business of the Company may require.
ARTICLE II.
MEETINGS OF STOCKHOLDERS
SECTION 2.1. PLACE OF MEETINGS. All meetings of stockholders will be
held at the principal office of the Company, or at such other place as will be
determined by the Board of Directors and specified in the notice of the
meeting.
SECTION 2.2. ANNUAL MEETING. The annual meeting of stockholders will
be held at such date and time as will be designated from time to time by the
Board of Directors and stated in the notice of the meeting, at which meeting
the stockholders will elect by written ballot a Board of Directors and transact
such other business as may properly be brought before the meeting of
stockholders. The Board of Directors may postpone the time of holding the
annual meeting of stockholders for such period not exceeding ninety (90) days,
as they may deem advisable. Failure to hold the annual meeting at the
designated time shall not work a dissolution of the Company nor impair the
powers, rights and duties of the Company's officers and Directors. At annual
meetings, the stockholders shall elect Directors and transact such other
business as may properly be brought before the meeting. If the election of
Directors shall not be held on the day designated herein for any annual meeting
of the stockholders or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the stockholders as soon
thereafter as is convenient.
================================================================================
Amended and Restate Bylaws.doc
<PAGE> 2
SECTION 2.3. NOTICE OF ANNUAL MEETING. Written or printed notice of
the annual meeting, stating the place, day and hour thereof, will be delivered
personally to each stockholder at his residence or usual place of business or
mailed to each stockholder entitled to vote at such address as appears on the
books of the Company, not less than ten (10) nor more than sixty (60) days
before the date of the meeting. Waiver by a stockholder (or his duly authorized
attorney) in writing of notice of a stockholders' meeting, signed by the
stockholder, whether before or after the time of such meeting, shall be
equivalent to the giving of such notice. Attendance by a stockholder, whether
in person or by proxy, at a stockholders' meeting shall constitute a waiver of
notice of such meeting of which the stockholder has had no notice.
SECTION 2.4. SPECIAL MEETING. Special meetings of stockholders, for
any purpose or purposes, unless otherwise prescribed by statute, may be called
by the Chief Executive Officer or the Board of Directors, and will be called by
the Chief Executive Officer or Secretary at the request in writing of the
stockholders owning ten percent (10%) of the outstanding shares of capital
stock of the Company entitled to vote at such meeting. Such request will state
the purpose(s) of the proposed meeting, and any purpose so stated will be
conclusively deemed to be a "proper" purpose.
SECTION 2.5. NOTICE OF SPECIAL MEETING. Written or printed notice of a
special meeting stating the place, day, hour and purpose(s) thereof, will be
personally delivered to each stockholder at his residence or usual place of
business or mailed to each stockholder entitled to vote at such address as
appears on the books of the Company, not less than ten (10) nor more than sixty
(60) days before the date of the meeting.
SECTION 2.6. ADJOURNMENT. At any meeting of stockholders of the
Company, if less than a quorum be present, a majority of the stockholders
entitled to vote, present in person or by proxy, shall have the power to
adjourn the meeting from time to time without notice other than announcement at
the meeting until a quorum shall be present. Any business may be transacted at
the adjourned meeting which might have been transacted at the meeting
originally noticed. If the adjournment is for more than thirty days, or if
after the adjournment a new record date, as provided for in Section 2.7 of
these Bylaws, 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.
SECTION 2.7. FIXING OF DATE FOR DETERMINATION OF STOCKHOLDERS OF
RECORD. The Board of Directors may, by resolution, fix in advance a date as the
record date for the purpose of determining stockholders entitled to notice of,
or to vote at, any meeting of stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend or the allotment of
any rights, or in order to make a determination of stockholders for any other
purposes (other than determining stockholders entitled to consent to action by
stockholders proposed to be taken without a meeting of stockholders). Such
date, in any case, shall not be more than sixty (60) days and not less than ten
(10) days prior to the date on which the particular action requiring such
determination of stockholders is to be taken. If no record date is fixed for
the determination of stockholders entitled to notice of or to vote at a meeting
of
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 2
<PAGE> 3
stockholders, or stockholders entitled to receive payment of a dividend, such
date shall be at the close of business on the day on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, and shall be the record
date for such determination of stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof except where the determination has been made through the closing of the
stock transfer records and the stated period of closing has expired.
SECTION 2.8. STOCKHOLDER LIST. At least ten (10) days before each
meeting of stockholders, a complete list of stockholders entitled to vote at
each such meeting or in any adjournment thereof, arranged in alphabetical
order, with the address of and the number of shares held by each, will be
prepared by the Secretary or the officer or agent having charge of the stock
transfer ledger of the Company. Such list will be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours for such ten (10) day period either at a place within the city
where the meeting is to be held, or, if not so specified, the place where the
meeting is to be held. Such list will also be produced and kept open at the
time and place of the meeting. The stock ledger shall be the only evidence as
to who are the stockholders entitled to vote in person or by proxy at any
meeting of stockholders.
SECTION 2.9. QUORUM. The holders of a majority of the shares of
capital stock issued and outstanding and entitled to vote, represented in
person or by proxy, will constitute a quorum at all meetings of the
stockholders for the transaction of business. The stockholders present may
adjourn the meeting despite the absence of a quorum. When a meeting is
adjourned for less than thirty (30) days in any one adjournment, it will not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted which might have been transacted on the original date of the
meeting. When a meeting is adjourned for thirty (30) days or more, notices of
the adjourned meeting will be given as in the case of an original meeting. The
vote of the holders of a majority of the shares entitled to vote and thus
represented at a meeting at which a quorum is present shall be the act of the
stockholders' meeting unless the vote of a greater number is required by law,
the Certificate of Incorporation or these Bylaws, in which case the vote of
such greater number shall be requisite to constitute the act of the meeting.
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.
SECTION 2.10. PROXIES AND VOTING. Stockholders entitled to vote shall
have the number of votes specified in the Certificate of Incorporation for each
share of stock owned by them and a proportionate vote for a fractional share.
Stockholders may vote in person or by written proxy dated not more than six
months before the meeting named therein. Proxies shall be filed with the
Secretary of the meeting, or of any adjournment thereof, before being voted.
Except as otherwise limited therein, proxies shall entitle the person named
therein to vote at any meeting or adjournment of such meeting but shall not be
valid after final adjournment of such
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 3
<PAGE> 4
meeting. A proxy with respect to stock held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to its
exercise the Company receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
stockholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger.
When a quorum is present at any meeting, the holders of a majority of
the stock represented and entitled to vote on any question (or if there are two
or more classes of stock entitled to vote as separate classes, then in the case
of each such class, the holders of a majority of the stock of that class
represented and entitled to vote on any question) other than an election by
stockholders shall, except where a larger vote is required by law, by the
articles of organization or by these bylaws, decide any question brought before
such meeting. Any election by stockholders shall be determined by a plurality
of the votes cast.
SECTION 2.11. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Any action
that may be taken at any annual or special meeting of the stockholders of the
Company, 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,
provided that a consent must bear the date of each stockholder's signature and
no consent will be effective unless written consents received by a sufficient
number of stockholders to take the contemplated action are delivered to the
Company within sixty days of the date that the earliest consent is delivered to
the Company. Prompt notice of the taking of corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing. In the event that the action which is consented
to is such as would have required the filing of a certificate under any section
of Delaware law, if such action had been voted on by stockholders at a meeting
thereof, the certificate filed under such other section shall state, in lieu of
any statement required by such section concerning any vote of stockholders,
that written consent and that written notice have been given in accordance with
Section 228 of the General Corporation Law of the State of Delaware.
SECTION 2.12. PRESIDING OFFICER AND CONDUCT OF MEETINGS. The Chairman
of the Board of Directors shall preside at all meetings of the stockholders and
shall automatically serve as Chairman of such meetings. In the absence of the
Chairman of the Board of Directors, or if the Directors neglect or fail to
elect a Chairman, then the President of the Company shall preside at the
meetings of the stockholders and shall automatically be the Chairman of such
meeting, unless and until a different person is elected by a majority of the
shares entitled to vote at such meeting. The Secretary of the Company shall act
as Secretary at all meetings of the stockholders. In the absence or disability
of the Secretary, the Chairman of the Board of Directors, the Chief Executive
Officer, or the President shall appoint a person to act as Secretary at such
meetings.
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 4
<PAGE> 5
SECTION 2.13. INSPECTORS. The Board of Directors may, in advance of
any meeting of stockholders, appoint one or more inspectors to act at such
meeting or any adjournment thereof. If any of the inspectors so appointed shall
fail to appear or act, the chairman of the meeting may, or if inspectors shall
not have been appointed, the Chairman of the meeting shall, appoint one or more
inspectors. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector at
such meeting with strict impartiality and according to the best of his ability.
The inspectors shall determine the number of shares of capital stock of the
Company outstanding and the voting power of each, the number of shares
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine
all challenges and questions arising in connection with the right to vote,
count and tabulate all votes, ballots or consents, determine the results, and
do such acts as are proper to conduct the election or vote with fairness to all
stockholders. On request of the chairman of the meeting, the inspectors shall
make a report in writing of any challenge, request or matter determined by them
and shall execute a certificate of any fact found by them. No directors or
candidate for the office of director shall act as an inspector of an election
of directors.
ARTICLE III.
BOARD OF DIRECTORS
SECTION 3.1. FUNCTIONS AND NUMBER. The property, business and affairs
of the Company shall be managed and controlled by a board of directors, who
need not be stockholders, citizens of the United States or residents of the
State of Delaware. The number of members which shall constitute the Board of
Directors shall be determined by resolution of the Board of Directors or by the
stockholders at an annual or special meeting held for that purpose, but no
decrease in the Board of Directors shall have the effect of shortening the term
of an incumbent director. The Board of Directors shall consist of not less than
one (1) nor more than seven (7) members. Except as otherwise provided by law or
in these Bylaws or in the Certificate of Incorporation, the directors shall be
elected by the stockholders entitled to vote at the annual meeting of
stockholders of the Company, and shall be elected to serve until the next
annual meeting of stockholders and until their successors shall be elected and
shall qualify.
SECTION 3.2. ELECTION AND TERM. Except as provided in Section 3.3 of
this Article, Directors will be elected at the annual meeting of the
stockholders, and each Director will be elected to serve until the next annual
meeting or until his successor will have been elected and qualified, unless
sooner removed in accordance with these Bylaws or until the Company has
received a written resignation from a Director. Directors need not be
stockholders of the Company.
SECTION 3.3. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies and
newly created directorships resulting from any increase in the authorized
number of Directors may be filled by a majority of the Directors, although less
than a quorum, and the Directors so elected shall hold office for the unexpired
term of their predecessor in office until the next annual meeting and until
their successors are elected and have qualified. Vacancies created by the
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 5
<PAGE> 6
removal of Directors by the owners of a majority of the outstanding shares of
capital stock will be filled by the owners of the majority of the outstanding
shares of capital stock. A vacancy shall be deemed to exist by reason of the
death or resignation of any Director or upon the failure of stockholders to
elect Directors to fill the unexpired terms of any Directors removed in
accordance with the provisions of these Bylaws.
SECTION 3.4. RESIGNATION; REMOVAL. Any Director may resign at any time
by giving written notice thereof to the Board of Directors. Any such
resignation will take effect as of its date unless some other date is specified
therein, in which event it will be effective as of that date. The acceptance of
such resignation will not be necessary to make it effective. The Board of
Directors may, by majority vote of the Directors then in office, remove a
Director for cause. The owners of a majority of the outstanding shares of
capital stock may remove any Director or the entire Board of Directors, with or
without cause, either by a vote at a special meeting or annual meeting, or by
written consent.
SECTION 3.5. COMPENSATION. The Board of Directors shall have the
authority to fix the compensation of directors for their services. A director
may also serve the Company in other capacities and receive compensation
therefor.
ARTICLE IV.
MEETINGS OF THE BOARD
SECTION 4.1. REGULAR MEETINGS. The Board of Directors will meet each
year immediately following the annual meeting of the stockholders to appoint
the members of such committees of the Board of Directors as the Board may deem
necessary or advisable, to elect officers for the ensuing year, and to transact
such other business as may properly come before the Board of Directors at such
meeting. No notice of such meeting will be necessary to the newly elected
Directors in order legally to constitute the meeting provided a quorum will be
present. Regular meetings may be held at such other times as shall be
designated by the Board of Directors without notice to the Directors.
SECTION 4.2. SPECIAL MEETINGS. Special meetings of the Board of
Directors will be held whenever called by the Chairman of the Board, Chief
Executive Officer, chairman of the Executive Committee or by two or more
Directors. Notice of each meeting will be given at least two (2) days prior to
the date of the meeting either personally or by telephone, facsimile or
telecopy (with proof of transmission) to each Director, and will state the
purpose, place, day and hour of the meeting. Waiver by a Director in writing of
notice of a Directors meeting, signed by the Director, whether before or after
the time of said meeting, shall be equivalent to the giving of such notice.
Except as provided in Section 9.3, attendance by a Director, whether in person
or by proxy, at a Directors' meeting shall constitute a waiver of notice of
such meeting of which the Director had no notice.
SECTION 4.3. QUORUM AND VOTING. At all meetings of the Board of
Directors (except in the case of a meeting convened for the purpose specified in
Section 3.3 of these
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Bylaws) a majority of the number of the Directors will be necessary and
sufficient to constitute a quorum for the transaction of business and the act
of a majority of the Directors present at any meeting at which there is a
quorum will be the act of the Board of Directors. If a quorum will not be
present at any such meeting of Directors, the Directors present may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum will be present.
SECTION 4.4. TELEPHONE MEETINGS. Subject to the provisions of
applicable law and these Bylaws regarding notice of meetings, the Directors may
participate in and hold a meeting using conference telephone or similar
communications equipment by means of which all persons participating in a
meeting can hear each other simultaneously, and participation in a meeting
pursuant to this Section shall constitute presence in person at such meeting. A
Director so attending will be deemed present at the meeting for all purposes
including the determination of whether a quorum is present except when a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground the meeting was not lawfully called
or convened.
SECTION 4.5. ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken at a meeting of the Board of Directors may be taken
without a meeting if a consent in writing, setting forth the action so taken,
is signed by all the members of the Board of Directors.
SECTION 4.6. ATTENDANCE FEES. Directors will not receive any stated
salary, as such, for their services, but by resolution of the Board of
Directors a fixed sum and expenses of attendance may be allowed for attendance
at each regular or special meeting of the Board of Directors; however, this
provision will not preclude any Director from serving the Company in any other
capacity and receiving compensation therefor.
SECTION 4.7. INTEREST OF DIRECTORS IN CONTRACTS. Any contract or other
transaction between the Company and one (1) or more of its Directors, or
between the Company and any firm of which one or more of its Directors are
members or employees, or in which they are interested, or between the Company
and any corporation or association of which one or more of its Directors are
shareholders, members, directors, officers or employees, or in which they are
interested, shall be valid for all purposes, notwithstanding the presence of
such Director or Directors at the meeting of the Board of Directors of the
Company, which acts upon, or in reference to, such contract or transaction, and
notwithstanding their participation in such action, if the fact of such
interest shall be disclosed or known to the Board of Directors and the Board of
Directors shall, nevertheless, authorize, approve, and ratify such contract or
transaction by a vote of a majority of the Directors present, such interested
Director or Directors to be counted in determining whether a quorum is present,
but not to be counted in calculating the majority of such quorum necessary to
carry such vote. This Section shall not be construed to invalidate any contract
or other transaction which would otherwise be valid under the common and
statutory law applicable thereto.
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ARTICLE V.
COMMITTEES
SECTION 5.1. EXECUTIVE COMMITTEE. The Board of Directors by resolution
may designate one or more Directors to constitute an Executive Committee, which
committee, to the extent provided in such resolution, will have and may
exercise all of the powers and authority of the Board of Directors in the
management of the business and affairs of the Company, except where action of
the Board of Directors is required by statute. Unless expressly authorized by
resolution of the Board of Directors, no committee shall have the power or
authority to (a) amend the Certificate of Incorporation, (b) adopt an agreement
of merger or consolidation, (c) recommend to the shareholders the sale, lease
or exchange of all or substantially all of the Company's property and assets,
(d) recommend to the stockholders a dissolution of the Company or a revocation
of a dissolution, or (e) amend the Bylaws of the Company.
SECTION 5.2. OTHER COMMITTEES. The Board of Directors may by resolution
create other committees for such terms and with such powers and duties as the
Board shall deem appropriate.
SECTION 5.3. ORGANIZATION OF COMMITTEES. The chairman of each
committee of the Board of Directors will be chosen by the members thereof. Each
committee will elect a Secretary, who will be either a member of the committee
or the secretary of the Company. The chairman of each committee will preside at
all meetings of such committee.
SECTION 5.4. MEETINGS. Regular meetings of each committee may be held
without the giving of notice of time and a place will have been established by
the committee for such meetings. Special meetings (and, if the requirements of
the preceding sentence have not been met, regular meetings) will be called in
the manner provided as respect to notices of special meetings of the Board of
Directors.
SECTION 5.5. QUORUM AND MANNER OF ACTING. Subject to the provisions of
applicable law and these Bylaws regarding notice of meetings, the member of
each committee may participate in and hold a meeting using conference telephone
or similar communications equipment by means of which all persons participating
in a meeting can hear each other simultaneously, and participation in a meeting
pursuant to this Section shall constitute presence in person at such meeting. A
member so attending will be deemed present at the meeting for all purposes
including the determination of whether a quorum is present except when a person
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground the meeting was not lawfully called
or convened. The act of a majority of the members so present at a meeting at
which a quorum is present will be the act of such committee. The members of
each committee will act only as a committee, and will have no power or
authority, as such, by virtue of their membership on the committee.
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SECTION 5.6. ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken by any committee may be taken without a meeting if a
consent in writing, setting forth the action so taken, is signed by all the
members of the committee.
SECTION 5.7. RECORD OF COMMITTEE ACTION; REPORTS. Each committee will
maintain a record, which need not be in the form of complete minutes, of the
action taken by it at each meeting, which record will include the date, time,
and place of the meeting, the names of the members present and absent, the
action considered, and the number of votes cast for and against the adoption of
the action considered. All action by each committee will be reported to the
Board of Directors at its meeting next succeeding such action, such report to
be in sufficient detail as to enable the Board to be informed of the conduct of
the Company's business and affairs since the last meeting of the Board.
SECTION 5.8. REMOVAL. Any member of any committee may be removed from
such committee, either with or without cause, at any time, by resolution
adopted by a majority of the whole Board of Directors at any meeting of the
board.
SECTION 5.9. VACANCIES. Any vacancy in any committee will be filled by
the Board of Directors in the manner prescribed by these Bylaws for the original
appointment of the members of such committee.
ARTICLE VI.
OFFICERS
SECTION 6.1. APPOINTMENT AND TERM OF OFFICE. The officers of the
Company may consist of a President, a Secretary, and a Treasurer, and there may
be a Chief Executive Officer, one or more Vice Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other
officers as may be appointed by the Board in its discretion. One of the
Directors may also be chosen Chairman of the Board. Each of such officers will
be chosen annually by the Board of Directors at its regular meeting immediately
following the annual meeting of stockholders and, subject to any earlier
resignation or removal, will hold office until the next annual meeting of
stockholders or until his earlier death, resignation, retirement,
disqualification, or removal from office and until his successor shall have
been duly elected and qualified. Two or more offices may be held by the same
person.
SECTION 6.2. REMOVAL. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors, with or without
cause, whenever in its judgment the best interests of the Company will be
served thereby, but such removal will be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent will not of itself create contract rights.
SECTION 6.3. VACANCIES. Whenever any vacancy shall occur in any office
of any officer by death, resignation, increase in the number of officers of the
Company, or otherwise,
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the same shall be filled by vote of a majority of the Directors for the
unexpired portion of the term.
SECTION 6.4. COMPENSATION. The compensation of all officers of the
Company shall be determined by the Board of Directors and may be altered by the
Board from time to time, except as otherwise provided by contract, and no
officer shall be prevented from receiving such compensation by reason of the
fact such officer is also a Director of the Company. All officers shall be
entitled to be paid or reimbursed for all costs and expenditures incurred in
the Company's business.
SECTION 6.5. POWERS AND DUTIES. The powers and duties of the officers
will be those usually pertaining to their respective offices, subject to the
general direction and supervision of the Board of Directors. Such powers and
duties will include the following:
a. Chairman of the Board. The Chairman of the Board, if one
is designated, shall be selected among the members of the Board of
Directors and will preside when present at all meetings of the
Board of Directors and of the stockholders. The Chairman of the
Board shall be available to consult with and advise the officers of
the Corporation with respect to the conduct of the business and
affairs of the Corporation and shall have such other powers and
duties as designated in accordance with these Bylaws and as from
time to time may be assigned by the Board of Directors. The
Chairman of the Board shall be the highest officer of the
Corporation and, subject to the control of the Board of Directors,
shall in general supervise and control all business and affairs of
the Corporation.
b. President. The President, if one is designated, shall be
the Chief Executive Officer of the Company unless a Chief Executive
Officer is otherwise designated by the Board of Directors. The
President will be responsible for general supervision of the
affairs, properties, and operations of the Company, and over its
several officers and be the Company's general manager responsible
for the management and control in the ordinary course of the
business of the Company. The President may execute and deliver in
the name and on behalf of the Company, deeds, mortgages, leases,
assignments, bonds, notes, bills of sale, assignments, releases,
receipts, contracts or other instruments of any kind or character
authorized by the Board of Directors. Unless otherwise directed by
the Board, the President shall attend in person or by substitute or
by proxy and act and vote on behalf of the Company at all meetings
of the stockholders of any corporation in which the Company holds
stock. The President may appoint or employ and discharge employees
and agents of the Company and fix their compensation.
c. Vice Presidents. Each Vice President, if any are
designated, will perform the duties prescribed or delegated by the
President or by the Board of
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Directors, and at the request of the President or the Board of
Directors, will perform as well the duties of the President's
office.
d. Secretary. The Secretary, if one is designated, will
give notice to and attend all meetings and keep the minutes of all
of the proceedings at all meetings of the Board of Directors and
all meetings of the stockholders and will be the custodian of all
corporate records and of the seal of the Company. The Secretary
will see that all notices required to be given to the stockholders
and to the Board of Directors are duly given in accordance with
these Bylaws or as required by law. It shall also be the duty of
the Secretary to attest, by personal signature and the seal of the
Company, all stock certificates issued by the Company and to keep a
stock ledger in which shall be correctly recorded all transactions
pertaining to the capital stock of the Company. The Secretary shall
also attest, by personal signature and the seal of the Company, all
deeds, conveyances, or other instruments requiring the seal of the
Company. The person holding the office of Secretary shall also
perform, under the direction and subject to the control of the
President and the Board of Directors, such other duties as may be
assigned to such officer. Unless a transfer agent is appointed, the
Secretary shall also keep or cause to be kept at any such office
the stock and transfer records, which shall contain the names of
all stockholders and the record address and the amount of stock
held by each, for inspection by stockholders. Any such inspection
by a stockholder of the articles of organization, bylaws, records
of meetings of the incorporators or stockholders, or the stock and
transfer records must be at a reasonable time and for a proper
purpose, but not to secure a list of stockholders for the purpose
of selling said list or copies thereof or of using the same for a
purpose other than in the interest of the applicant, as a
stockholder, relative to the affairs of the Company. Said copies
and records need not all be kept in the same office. In the absence
of the appointment of a Treasurer for the Company, the Secretary
shall perform the duties of the Treasurer.
e. Any Assistant Secretary shall have the powers and
perform the duties of the Secretary in his absence or in case of
his inability to act and shall have such other powers and duties as
the directors may from time to time prescribe. If neither the
Secretary nor any Assistant Secretary is present at any meeting of
the stockholders, a temporary Secretary to be designated by the
person presiding at the meeting shall perform the duties of the
Secretary.
f. Treasurer. The Treasurer will be the principal
accounting and financial officer of the Company and will have
active control of and shall be responsible for all matters
pertaining to the accounts and finances of the Company. The
Treasurer will have charge of the corporate funds and securities
and will keep a record of the property and indebtedness of the
Company. If required by the Board of Directors, the Treasurer will
give bond for the faithful discharge of duties in such sum and with
such surety or sureties as the Board may
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require. The Treasurer shall keep such monies and securities of the
Company as may be entrusted to his keeping and account for the
same. The Treasurer shall be prepared at all times to give
information as to the condition of the Company and shall make a
detailed annual report of the entire business and financial
condition of the Company. The person holding the office of
Treasurer shall also perform, under the direction and subject to
the control of the President and the Board of Directors, such other
duties as may be assigned by either of such officers. The duties of
the Treasurer may also be performed by any Assistant Treasurer.
g. Other Officers. The Board of Directors may appoint such
other officers, agents or employees as it may deem necessary for
the conduct of the business of the Company. In addition, the Board
may authorize the President or other officers to appoint such
agents or employees as they deem necessary for the conduct of the
business of the Company.
SECTION 6.6. RESIGNATIONS. Any officer may resign at any time by
giving written notice thereof to the Board of Directors. Any such resignation
will take effect as of its date unless some other date is specified therein, in
which event it will be effective as of that date. The acceptance of such
resignation will not be necessary to make it effective.
ARTICLE VII.
SHARES OF STOCK AND THEIR TRANSFER; BOOKS
SECTION 7.1. FORMS OF CERTIFICATES. Shares of the capital stock of the
Company will be represented by certificates in such form, not inconsistent with
law or with the Certificate of Incorporation of the Company, as will be
approved by the Board of Directors, and will be signed by the Chairman of the
Board, President or a Vice President and the Secretary, an Assistant Secretary,
the Treasurer or an Assistant Treasurer and sealed with the seal of the
Company. Such seal may be facsimile, engraved or printed. Where any such
certificate is countersigned by a transfer agent or by a registrar, the
signature of such Chairman of the Board, President, Vice President, Secretary,
Assistant Secretary, Treasurer or Assistant Treasurer upon such certificate may
be facsimiles, engraved or printed. Such certificates shall be delivered
representing all shares to which stockholders are entitled.
SECTION 7.2. ISSUANCE. Shares of stock with par value (both treasury
and authorized but unissued) may be issued for such consideration (not less
than par value) and to such persons as the Board of Directors may determine
from time to time. Shares of stock without par value may be issued for such
consideration as is determined from time to time by the Board of Directors.
Shares may not be issued until the full amount of the consideration, fixed as
provided by law, has been paid.
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SECTION 7.3. PAYMENT FOR SHARES.
a. The consideration for the issuance of shares shall consist of
cash, services rendered (including services actually performed for the
Company) or real or personal property (tangible or intangible) or any
combination thereof actually received. Neither promissory notes nor
the promise of future services shall constitute payment for shares.
b. In the absence of actual fraud in the transaction, the
judgment of the Board of Directors as to the value of consideration
received shall be conclusive.
c. When consideration, fixed as provided by law, has been paid,
the shares shall be deemed to have been issued and shall be considered
fully paid and nonassessable.
d. The consideration received for shares shall be allocated by
the Board of Directors, in accordance with law, between stated capital
and capital surplus accounts.
SECTION 7.4. TRANSFER OF SHARES. Shares of stock of the Company will
be transferred only on the stock books of the Company by the holder of record
thereof in person, or by a duly authorized attorney, upon the endorsement and
surrender of the certificate therefor.
SECTION 7.5. STOCKHOLDERS OF RECORD. Stockholders of record entitled
to vote at any meeting of stockholders or entitled to receive payment of any
dividend or to any allotment of rights or to exercise the rights in respect of
any change or conversion or exchange of capital stock will be determined
according to the Company's stock ledger and, if so determined by the Board of
Directors in the manner provided by statute, will be such stockholders of
record (a) at the date fixed for closing the stock transfer books, or (b) as of
the date of record.
SECTION 7.6. LOST, STOLEN OR DESTROYED CERTIFICATES. The Board of
Directors may direct the issuance of new or duplicate stock certificates in
place of lost, stolen or destroyed certificates, upon being furnished with
evidence satisfactory to it of the loss, theft or destruction and upon being
furnished with indemnity satisfactory to it. The Board of Directors may
delegate to any officer authority to administer the provisions of this Section.
SECTION 7.7. CLOSING OF STOCK TRANSFER BOOKS. The Board of Directors
will have power, in its discretion, either (a) to close the stock transfer
books of the Company (i) for a period not exceeding sixty (60) days nor less
than ten (10) days preceding (A) the date of any meeting of stockholders, (B)
the date for the payment of any dividend, (C) the date for the allotment of
rights, or (D) the date when change or conversion or exchange of capital stock
will go into effect, (ii) for a period not exceeding sixty (60) days nor less
than ten (10) days in connection with obtaining the consent of stockholders for
any purpose; or (b) to fix a date, not more than sixty (60) days nor less than
ten (10) days before (i) any stockholders' meeting, (ii) the date for the
payment of any dividend, (iii) the date for the allotment of rights, or (iv)
the date when any change or conversion or exchange of capital stock will go
into effect as a record date for the determination of the stockholders entitled
to notice of, and to vote at, any such meeting
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and at any adjournment thereof, or entitled to receive payment of any such
dividend, (B) to any such allotment of rights, (C) to exercise the rights in
respect of such change, conversion, or exchange of capital stock, or (D) to
give such consent, and in such case such stockholders and only such
stockholders as will be stockholders of record on the date so fixed will be
entitled to notice of and to vote at such meeting and at any adjournment
thereof, or to receive payment of such dividend, or to exercise rights, or to
give such consent as the case may be, notwithstanding any transfer of any stock
on the books of the Company after such record date fixed as aforesaid.
SECTION 7.8. REGULATIONS. The Board of Directors may make such rules
and regulations as it may deem expedient concerning the issuance, transfer and
registration of certificates of stock. The Board of Directors may appoint one
or more transfer agents or registrars, or both, and may require all
certificates of stock to bear the signature of either or both.
SECTION 7.9. EXAMINATION OF BOOKS BY STOCKHOLDERS. The original or
duplicate stock ledger of the Company containing the names and addresses of the
stockholders and the number of shares held by them and the other books and
records of the Company will, at all times during the usual hours of business,
be available for inspection at its principal office, and any stockholder, upon
compliance with the conditions set forth in and to the extent authorized by
Section 220 of the General Corporation Law of the State of Delaware, will have
the right to inspect such books and records.
ARTICLE VIII.
INDEMNIFICATION; INSURANCE
SECTION 8.1. INDEMNIFICATION. Each person who was or is made a party
or is threatened to be made a party to or is involved in any threatened,
pending or completed action suit or proceeding, whether civil, criminal or
investigative (a "proceeding"), by reason of the fact that he or a person for
whom he is the legal representative is or was a director, officer, employee or
agent of the Company or is or was serving at the request of the Corporation as
a director, officer, employee, trustee 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 his 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 indemnified and held harmless by the Company to the fullest
extent permitted by the General Corporation Law of the State of Delaware
against all expenses, liability and loss (including attorneys' fees, judgments,
fines, special excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by such person in connection
therewith. Such right shall be a contract right and shall include the right to
require advancement by the Company of attorneys' fees and other 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 Company in his 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 by the Company only upon delivery to the corporation of an
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<PAGE> 15
undertaking, by or on behalf of such Director or officer, to repay all amount
so advanced if it should be determined ultimately that such Director or officer
is not entitled to be indemnified under this section or otherwise.
SECTION 8.2. INDEMNIFICATION NOT EXCLUSIVE. The indemnification and
advancement of expenses provided by this Article VIII shall not be deemed
exclusive of any other rights to which a person seeking indemnification may be
entitled under the Certificate of Incorporation, any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
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.
SECTION 8.3. INSURANCE. By action of its Board of Directors,
notwithstanding any interest of the Directors in the action, to the full extent
permitted by the General Corporation Law of the State of Delaware, the Company
may purchase and maintain insurance, in such amounts and against such risks as
the Board of Directors deems appropriate, on behalf of any person who is or was
a Director, advisory Director, officer, employee or agent of the Company, or of
any entity a majority of the voting stock of which is owned by the Company, or
who is or was serving at the request of the Company as a Director, advisory
Director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of the
status as such, whether or not the Company would have the power or would be
required to indemnify such person against such liability under the provisions
of this Article, or of the Certificate of Incorporation or of the General
Corporation Law of the State of Delaware.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. AMENDMENTS. These Bylaws may be altered, amended or
repealed or new Bylaws may be adopted at any regular meeting of the
stockholders or at any special meeting of the stockholders at which a quorum is
present or represented, provided notice of the proposed alteration or repeal be
contained in the notice of such special meeting, by the affirmative vote of a
majority of the shares entitled to vote at such meeting and present or
represented, or by a majority vote of the Board of Directors at any regular
meeting of the Board or at any special meeting of the Board if notice of
proposed alteration or repeal be contained in the notice of such special
meeting.
SECTION 9.2. METHODS OF NOTICE. Whenever any notice is required to be
given in writing to any stockholder pursuant to any statute, the Certificate of
Incorporation or these Bylaws, it will not be construed to require personal or
actual notice, and such notice will be deemed for all purposes to have been
sufficiently given at the time the same is deposited in the United States mail
or recognized overnight courier service with postage thereon prepaid, addressed
to the stockholder at such address as appears on the books of the Company.
Whenever any notice may be or is required to be given as (a) personally to any
Director, it will be deemed
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for all purposes to have been sufficiently given either (i) three (3) days
following the date the same is deposited in the United States mail with postage
prepaid thereon (ii) the day following the date the same is delivered to any
recognized overnight courier service, or (iii) to the date the same is
personally delivered, or (b) by facsimile to any Director, it will be deemed
for all purposes to have been sufficiently given at the time the same is
properly transmitted (with proof of transmission).
SECTION 9.3. WAIVER OF NOTICE. The giving of any notice of the time,
place or purpose of holding any meeting of stockholders or Directors and any
requirement as to publication thereof, whether statutory or otherwise, will be
waived by the attendance at such meeting by any person entitled to receive such
notice except when the person 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 and may be waived by
such person by an instrument in writing executed and filed with the records of
the meeting, either before or after the holding thereof.
SECTION 9.4. SEAL. The seal of the Company shall be in such form as
shall be adopted and approved from time to time by the Board of Directors. The
seal may be used by causing it, or a facsimile thereof, to be impressed,
affixed, imprinted or in any manner reproduced. The Board of Directors may
determine not to adopt a seal for the Company, in which case any documents or
instruments providing for the use of a seal shall be valid despite the lack of
a corporate seal.
SECTION 9.5. SECURITIES OF OTHER CORPORATION. The President or any
Vice President of the Company shall have power and authority to transfer,
endorse for transfer, vote, consent or take any other action with respect to
any securities of another issuer which may be held or owned by the Company and
to make, execute and deliver any waiver, proxy or consent with respect to any
such securities.
SECTION 9.6. FISCAL YEAR. The fiscal year of the Company shall be fixed
by resolution of the Board of Directors.
SECTION 9.7. DIVIDENDS. Dividends upon the outstanding stock of
the Company, subject to the provisions of the statutes and the Certificate of
Incorporation, may be declared by the Board of Directors at any regular or
special meeting. Dividends may be declared and paid in cash, in property or in
shares of the Company, or in any combination thereof.
SECTION 9.8. RESERVES. There may be created from time to time by
resolution of the Board of Directors, out of funds of the Company available for
dividends, such reserve or reserves as the Directors from time to time in their
discretion think proper (a) to provide for contingencies, (b) to equalize
dividends, (c) to repair or maintain any property of the Company, or (d) for
such other purpose as the Directors shall think beneficial to the Company, and
the Directors may modify or abolish any such reserve in the manner in which it
was created.
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 16
<PAGE> 17
SECTION 9.9. SIGNATURE OF NEGOTIABLE INSTRUMENTS. All bills, notes,
checks or other instruments for the payment of money shall be signed or
countersigned by such officer, officers, agent or agents, and in such manner,
as are prescribed by resolution (whether general or special) of the Board of
Directors or the executive committee.
SECTION 9.10. SURETY BONDS. Such officers and agents of the Company
(if any) as the Board of Directors may direct from time to time shall be bonded
for the faithful performance of their duties and for the restoration to the
Company, in case of their death, resignation, disqualification or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in their possession or under their control belonging to the Company, in
such amounts and by such surety companies as the Board of Directors may
determine. The premiums on such bonds shall be paid by the Company, and the
bonds so furnished shall be in the custody of the Secretary.
SECTION 9.11. LOANS AND GUARANTIES. The Company may lend money to,
guaranty obligations of, and otherwise assist its Directors, officers and
employees if the Board of Directors determines such loans, guaranties or
assistance reasonably may be expected to benefit, directly or indirectly, the
Company.
SECTION 9.12. RELATION TO CERTIFICATE OF INCORPORATION. These Bylaws
are subject to, and governed by, the Certificate of Incorporation.
================================================================================
AMENDED AND RESTATED BYLAWS OF eVENTURES GROUP, INC. - PAGE 17
<PAGE> 1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
eVENTURES GROUP, INC.
(Pursuant to Section 242 of the General
Corporation Law of the State of Delaware)
===============================================================================
eVENTURES GROUP, INC. (the "Corporation"), a corporation existing
under and by virtue of the General Corporation Law of the State of Delaware
("DGCL"),
DOES HEREBY CERTIFY:
FIRST: The name of the Corporation is eVENTURES GROUP, INC.
SECOND: The Board of Directors of the Corporation (the "Board"),
acting by unanimous written consent dated September 17, 1999, in accordance
with the applicable provisions of the DGCL and the Corporation's bylaws, did
duly adopt resolutions (a) approving the amendment to the Corporation's
Certificate of Incorporation described herein (the "Amendment"), (b) directing
that the Amendment be submitted to the stockholders of the Corporation for
their consideration and approval, and (c) directing that, upon approval and
adoption of such amendment by the stockholders of the Corporation, this
amendment be executed and filed with the Secretary of State of Delaware and
elsewhere as may be required by law.
THIRD: The stockholders of the Corporation (the "Stockholders") acting
by a written consent of the holders of a majority of the outstanding shares of
the corporation adopted resolutions adopting the Amendment.
FOURTH: The resolutions adopted by the stockholders are as follows:
"BE IT RESOLVED, that Article IV of the Certificate of Incorporation
of the Company be amended to read in its entirety as follows:
ARTICLE IV
The aggregate number of shares which the Corporation shall have the
authority to issue is 80,000,000 shares, consisting of (i) 75,000,000 shares of
Common Stock, par value $0.00002 per share (the "Common Stock"), and (ii)
5,000,000 shares of Preferred Stock, par value $0.00002 per share (the
"Preferred Stock").
<PAGE> 2
The aggregate stated capital of the common stock issued and
outstanding upon the taking effect of this ARTICLE FOUR shall be the same as
the aggregate stated capital of the common stock issued and outstanding
immediately prior to the taking effect of this ARTICLE FOUR.
The following is a statement of the designations, preferences,
limitations, and relative rights, including voting rights, in respect of the
classes of stock of the Corporation and of the authority with respect thereto
expressly vested in the Board of Directors of the Corporation:
COMMON STOCK
A. Each share of Common Stock of the Corporation shall have identical
rights and privileges in every respect. The holders of shares of Common Stock
shall be entitled to vote upon all matters submitted to a vote of the
stockholders of the Corporation and shall be entitled to one vote for each
share of Common Stock held.
B. Subject to the prior rights and preferences, if any, applicable to
shares of the Preferred Stock or any series thereof, the holders of shares of
the Common Stock shall be entitled to receive such dividends (payable in cash,
stock, or otherwise) when, if and as may be declared thereon by the Board of
Directors at any time and from time to time out of any funds of the Corporation
legally available therefor.
PREFERRED STOCK
C. The Board of Directors of the Corporation is hereby expressly
authorized, subject to the limitations provided by law, to establish and
designate series of the Preferred Stock, to fix the number of shares
constituting each series, and to fix the designations and the preferences,
limitations, and relative rights, including voting rights, of the shares of
each series and the variations of the relative rights and preferences as
between series, and to increase and to decrease the number of shares
constituting each series, provided that the Board of Directors may not decrease
the number of shares within a series to less than the number of shares within
such series that are then issued. Each such series of Preferred Stock shall be
designated so as to distinguish the shares thereof from the shares of all other
series and classes. The relative powers, rights, preferences, and limitations
may vary between and among series of Preferred Stock in any and all respects so
long as all shares of the same series are identical in all respects, except
that shares of any such series issued at different times may have different
dates from which dividends thereon cumulate.
The authority of the Board of Directors of the Corporation with
respect to each series shall include, but shall not be limited to, the
authority to determine the following:
(a) The designation of such series;
(b) The number of shares initially constituting such
series;
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<PAGE> 3
(c) The rate or rates and the times at which dividends on the
shares of such series shall be paid, the periods in respect of which
dividends are payable, the conditions upon such dividends, the
relationship and preferences, if any, of such dividends to dividends
payable on any other class or series of shares, whether or not such
dividends shall be cumulative, partially cumulative, or noncumulative,
if such dividends shall be cumulative or partially cumulative, the
date or dates from and after which, and the amounts in which, they
shall accumulate, whether such dividends shall be share dividends,
cash or other dividends, or any combination thereof, and if such
dividends shall include share dividends, whether such share dividends
shall be payable in shares of the same or any other class or series of
shares of the Corporation (whether now or hereafter authorized), or
any combination thereof, and the other terms and conditions, if any,
applicable to dividends on shares of such series;
(d) Whether or not the shares of such series shall be
redeemable or subject to repurchase at the option of the Corporation
or the holder thereof or upon the happening of a specified event, if
such shares shall be redeemable, the terms and conditions of such
redemption, including but not limited to the date or dates upon or
after which such shares shall be redeemable, the amount per share
which shall be payable upon such redemption, which amount may vary
under different conditions and at different redemption dates, and
whether such amount shall be payable in cash, property, or rights,
including securities of the Corporation or another corporation;
(e) The rights of the holders of shares of such series (which
may vary depending upon the circumstances or nature of such
liquidation, dissolution, or winding up) in the event of the voluntary
or involuntary liquidation, dissolution, or winding up of the
Corporation and the relationship or preference, if any, of such rights
to rights of holders of stock of any other class or series.
(f) Whether or not the shares of such series shall have
voting powers and, if such shares shall have such voting powers, the
terms and conditions thereof, including, but not limited to, the right
of the holders of such shares to vote as a separate class either alone
or with the holders of shares of one or more other classes or series
of stock and the right to have more (or less) than one vote per share;
(g) Whether or not a sinking fund shall be provided for the
redemption of the shares of such series and, if such a sinking fund
shall be provided, the terms and conditions thereof;
(h) Whether or not a purchase fund shall be provided for the
shares of such series and, if such a purchase fund shall be provided,
the terms and conditions thereof;
(i) Whether or not the shares of such series, at the option
of either the Corporation or the holder or upon the happening of a
specified event, shall be convertible
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<PAGE> 4
into stock of any other class or series and, if such shares shall be
so convertible, the terms and conditions of conversion, including, but
not limited to, any provision for the adjustment of the conversion
rate or the conversion price;
(j) Whether or not the shares of such series, at the option
of either the Corporation or the holder or upon the happening of a
specified event, shall be exchangeable for securities, indebtedness,
or property of the Corporation and, if such shares shall be so
exchangeable, the terms and conditions of exchange, including, but not
limited to, any provision for the adjustment of the exchange rate or
the exchange price; and
(k) Any other preferences, limitations, and relative rights
as shall not be inconsistent with the provisions of this Article Four
or the limitations provided by law.
D. Except as otherwise required by law, in the Corporation's
Certificate of Incorporation, or in any resolution of the Board of Directors
creating any series of Preferred Stock, the holders of shares of Preferred
Stock and all series thereof who are entitled to vote shall vote together with
the holders of shares of Common Stock, and not separately by class.
FURTHER RESOLVED, that the filing of a Certificate of Amendment of the
Certificate of Incorporation of the Corporation with the Secretary of State of
Delaware, and elsewhere as required by law, to effect the foregoing amendment
of the Certificate of Incorporation be, and it hereby is, approved, ratified
and confirmed in all respects."
FOURTH: This Certificate of Amendment to the Certificate of
Incorporation has been duly adopted and is being filed in accordance with the
provisions of Section 242 of the DGCL.
IN WITNESS WHEREOF, the Chief Executive Officer of the Corporation has
hereunto set his hand this 17th day of September, 1999.
eVENTURES GROUP, INC.
/s/ DANIEL WETTREICH
-----------------------------------------
By: Daniel Wettreich
Its: Chief Executive Officer
4
<PAGE> 1
CERTIFICATE OF DESIGNATION, PREFERENCE
AND RIGHTS OF SERIES A CONVERTIBLE
PREFERRED STOCK OF eVENTURES GROUP, INC.
We, BARRETT N. WISSMAN and STUART J. CHASANOFF, being the President and
the Secretary, respectively, of eVENTURES GROUP, INC., a corporation organized
and existing under the laws of Delaware, (the "Corporation"), DO HEREBY CERTIFY
that, pursuant to authority conferred upon the Board of Directors by the Amended
Certificate of Incorporation and Section 151 of the Delaware General Corporation
Law, the Board of Directors, at a meeting duly called and held on the 24th day
of September, 1999, adopted the following resolution providing for the issuance
of a series of Preferred Stock:
RESOLVED, that pursuant to authority vested in the Board of Directors
by Article Fourth of the Amended Certificate of Incorporation of this
Corporation, a series of 1,000 shares of Preferred Stock, par value
$0.00002 per share, is hereby established, the distinctive designation
of which shall be "Series A Convertible Preferred Stock" (such series
being hereinafter called "Series A Stock"), and the preferences and
relative, participating, optional or other special rights of Series A
Stock, and the qualifications, limitations or restrictions thereof (in
addition to the relative powers, preferences and rights, and
qualifications, limitations or restrictions thereof, set forth in
Article Fourth of the Amended Certificate of Incorporation of the
Corporation which are applicable to shares of Preferred Stock of all
series) shall be as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
PART 1. DIVIDENDS.
1.01 NO DIVIDEND OBLIGATION. The holders of the Series A Stock shall
have no rights to the payment of dividends on the Series A Stock
(regardless of whether the Corporation declares or pays dividends on
any other class of preferred stock or common stock of the Corporation).
PART 2. REDEMPTION.
2.01 OPTIONAL REDEMPTION. All or any shares of Series A Stock may be
redeemed by the Corporation at its election at any time and from time
to time expressed by resolution of its Board of Directors, in the
manner prescribed in this Part 2, provided that in any redemption under
this Section 2.01 the Corporation shall redeem not less than 750 shares
of Series A Stock.
2.02 [INTENTIONALLY OMITTED.]
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<PAGE> 2
2.03 REDEMPTION NOTICE. Before making any redemption pursuant to
Section 2.01, the Corporation shall mail by certified or registered
mail, return receipt requested, to each record holder of any shares of
Series A Stock at the address shown on the Corporation's records, a
written notice (a "Redemption Notice"), stating: (i) the number of
shares of Series A Stock held by record by such holder which the
Corporation proposes to redeem; (ii) the date (herein called the
"Redemption Date") on which the Corporation proposes to pay the
Redemption Price for the shares to be redeemed; (iii) the Redemption
Price which is to be paid for each share repurchased; and (iv) the
place at which the shares to be redeemed may be surrendered in exchange
for the Redemption Price for such shares. Upon the mailing of a
Redemption Notice with respect to any optional repurchase which the
Corporation may choose to make pursuant to rights granted in Section
2.01, the Corporation shall become obligated to redeem the shares of
Series A Stock specified in such notice on the date specified in such
notice as the Redemption Date. Each Redemption Notice under Section
2.01 shall be mailed at least 10 days before the Redemption Date,
provided that if the Corporation fails to pay the Redemption Price on
such date (for a reason other than a holder's failure to deposit Series
A Stock share certificates pursuant to Section 2.05(b)), the Redemption
Date shall be the date on which the Corporation actually pays the
Redemption Price.
2.04 DETERMINATION OF NUMBER OF EACH HOLDER'S SHARES TO BE REDEEMED.
The number of shares of Series A Stock to be redeemed from each holder
thereof in repurchases under Section 2.01 shall be determined by
multiplying the total number of shares of Series A Stock to be redeemed
times a fraction, the numerator of which shall be the total number of
shares of Series A Stock held by such holder and the denominator of
which shall be the total number of shares of Series A Stock
outstanding.
2.05 REDEMPTION PRICE.
(a) For each share of Series A Stock which shall be redeemed
by the Corporation at any time for any reason in redemptions pursuant
to Section 2.01, the Corporation shall be obligated to pay to the
holder of such share an amount (herein called the "Redemption Price"
for such share) equal to the Liquidation Value of such share. Such
payments shall be deemed to become "due" for all purposes of this
Section regardless of whether the Corporation shall be able or legally
permitted to make such payments on such Redemption Date.
(b) Each holder of Series A Stock shall be entitled to receive
on or at any time after any Redemption Date the full Redemption Price
for each share of Series A Stock held by such holder which the
Corporation shall be obligated to redeem on such Redemption Date upon
surrender by such holder at the Corporation's principal office of the
certificate representing such share duly endorsed in blank or
accompanied by an appropriate form of assignment duly endorsed in
blank. After the payment by the Corporation in the manner required by
Section 4.03 of the full Redemption Price for any Series A Stock, all
rights of the
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<PAGE> 3
holder of such share shall have been surrendered for cancellation)
cease and terminate with respect to such shares except, Series A Stock
as provided in Section 8 hereof.
2.06 ALLOCATION OF PARTIAL REDEMPTION PAYMENTS AMONG HOLDERS OF SERIES
A STOCK. If any time the Corporation shall not be able to pay the full
Redemption Price for all Series A Stock which the Corporation shall
have become obligated to redeem at or prior to such time in redemptions
under Section 2.01, each holder of shares of Series A Stock shall have
the right to have redeemed by the Corporation a number of such holder's
shares of Series A Stock equal to the product derived by multiplying
the total number of shares of Series A Stock which the Corporation
shall be able to redeem at such time times a fraction, the numerator of
which shall be the total number of shares of Series A Stock which the
Corporation shall have become obligated to redeem from such holder at
or prior to such time (but which the Corporation shall not have
redeemed at or prior to such time) and the denominator of which shall
be the total number of shares of Series A Stock which the Corporation
shall have become obligated to redeem at or prior to such time (but
which the Corporation shall not have redeemed at or prior to such
time).
2.07 REDEEMED SHARES OF SERIES A STOCK TO BE CANCELED. The Corporation
shall cancel each share of Series A Stock which it shall redeem or for
any other reason acquire, and no share of Series A Stock which shall be
redeemed or otherwise acquired by the Corporation shall thereafter be
reissued, sold, or transferred by the Corporation to any person. The
number of shares of Series A Stock which the Corporation shall be
authorized to issue shall be deemed to be reduced by the number of
shares of Series A Stock which the Corporation shall redeem or
otherwise acquire.
PART 3. LIQUIDATION.
3.01 RIGHTS OF HOLDERS OF SERIES A STOCK. In the event of any voluntary
or involuntary liquidation (whether complete or partial), dissolution
or winding up of the Corporation, the holders of shares of Series A
Stock shall be entitled to be paid out of the assets of the Corporation
available for distribution to its stockholders, whether from capital,
surplus or earnings, an amount in cash equal to the sum of $1000 per
share (the "Liquidation Value").
3.02 ALLOCATION OF LIQUIDATION PAYMENTS AMONG HOLDERS OF STOCK. If upon
any dissolution, liquidation (whether complete or partial), or winding
up of the Corporation, the assets of the Corporation available for
distribution to holders of shares of Series A Stock (hereinafter in
this Section 3.02 called the "Total Amount Available") shall be
insufficient to pay the holders of outstanding shares of Series A Stock
the full amounts to which they shall be entitled under Section 3.01,
each holder of shares of Series A Stock shall be entitled to receive an
amount equal to the product derived by multiplying the Total Amount
Available times a fraction the numerator of which shall be the number
of shares of Series A Stock held by such
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<PAGE> 4
holder and the denominator of which shall be the total number of shares
of Series A Stock then outstanding.
PART 4. ADDITIONAL PROVISIONS GOVERNING CUMULATIVE PREFERRED STOCK.
4.01 [INTENTIONALLY OMITTED.]
4.02 VOTING RIGHTS.
(a) Except as otherwise provided by the Certificate of
Incorporation or under the law, the entire voting power for the
election of directors and for all other purposes shall be vested
exclusively in the holders of the outstanding Common Stock and the
holder of shares of Series A Stock shall have no voting rights.
4.03 METHOD OF PAYMENT.
(a) Ordinary Payments. Any payment at any time due with
respect to any share of Series A Stock (including but not limited to
the payment of the Redemption Price for such share, and any payment due
on such share under Part 3) shall be made by means of a check (drawn
upon funds which are immediately available not later than the due date
of the payment being made by such check) to the order of the record
holder of such Share at the address for such record holder shown on the
Corporation's records, which check shall be mailed by United States
mail (by first class or any other class reasonably expected to effect
earlier delivery at such time so that such check should reasonably be
expected to arrive at the address to which it is required under this
sentence to be mailed) not later than the due date of the payment being
made by such check.
(b) When Payment Deemed to Have Been Made. Any payment at any time
due with respect to any share of Series A Stock (including but not
limited to payment of the Redemption Price for such share and any
payment due on such share under Part 3) shall be deemed to have been
paid by the Corporation at the time such payment shall have been
delivered pursuant to Section 4.03(a) the payment shall be deemed to
have been made on the date on which such check reasonably could have
been expected to be received by the addressee; and (ii) if any check or
other medium by which any payment shall be made shall prove not to be
immediately collectible on the due date of the payment being so made,
such payment shall not be deemed to have been made until cash in the
amount of such payment shall actually be received by the person
entitled to receive such payment.
4.04 AMENDMENT AND WAIVER. No change in the provision of this Section
affecting any interests of the holders of any shares of Series A Stock
shall be binding or effective unless such change shall have been
approved in writing by at least two unaffiliated holders of at least
66 2/3% of the shares of Series A Stock outstanding at the time such
change shall be made, provided that no such change
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<PAGE> 5
shall be made without the prior written consent of the holders of an
aggregate of at least 80% of the shares of Preferred Stock then
outstanding be made.
4.05 REGISTRATION OF TRANSFER OF PREFERRED STOCK. The Corporation will
keep at its principal office a register for the registration of the
shares of Series A Stock Upon the surrender of any certificate
representing shares of Series A Stock at the Corporation's principal
office, the Corporation will, at the request of the registered holder
of such certificate, execute and deliver, at the Corporation's expense,
a new certificate or certificates in exchange representing the number
of shares of Series A Stock represented by the surrendered certificate.
Each such new certificate shall be registered in such name and shall
represent such number of shares of Series A Stock as shall be requested
by the holder of the surrendered certificate and shall be substantially
identical in form to the surrendered certificate.
4.06 REPLACEMENT. Upon receipt by the Corporation of evidence
reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any certificate evidencing one or more
shares of Series A Stock (an affidavit of the Registered Holder,
without bond shall be satisfactory) the Corporation at its expense will
execute and deliver in lieu of such certificate, a new certificate of
like kind, representing the number of shares of Series A Stock which
shall have been represented by such lost, stolen, destroyed, or
mutilated certificate.
PART 5. [INTENTIONALLY OMITTED.]
PART 6. INTERPRETATION OF THIS INSTRUMENT.
6.01 DEFINITIONS. Each term defined in this Section 6.01 has the
meaning indicated in this instrument whenever such term is used in this
instrument.
(a) "AGREEMENT" means any agreement, as amended, modified or
extended, between the Corporation and any person holding Preferred
Stock, including without limitation the Subscription Agreement
anticipated to be executed by the Corporation on or about September 24,
1999.
(b) COMMON STOCK AND EXISTING COMMON STOCK. The term "Common
Stock" or "Common Shares" designates and includes the Corporation's
Existing Common Stock of all classes and any capital stock of any class
of the Corporation authorized after the date of the Agreement which
shall not be limited to a fixed sum or a percentage of par value in
respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon the voluntary or
involuntary liquidation or winding up of the Corporation. The term
"Existing Common Stock" designates the Corporation's authorized Common
Stock, par value $0.00002 per share, of all classes, as constituted on
the Closing Date as set forth in the Agreement.
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<PAGE> 6
(c) CONVERSION SHARE. The term "Conversion Share" means one
share of the Corporation's authorized Common Stock, provided that if
under the provisions hereof, there shall be a change such that the
securities purchasable hereunder shall be issued by an entity other
than the Corporation or class of securities purchasable hereunder, then
the term "Conversion Share" shall mean one share of the security
purchasable upon the exercise of the rights granted hereunder if such
security shall be issuable in shares or shall mean the smallest unit in
which such security shall be issuable if such security shall not be
issuable in shares.
(d) CONVERSION SHARES. The term "Conversion Shares" means the
aggregate Conversion Shares at any time issuable upon conversion of the
Series A Stock at such time.
(e) CONVERSION PRICE. The term "Conversion Price" means the
Initial Conversion Price of $5.00, as such price may be adjusted from
time to time pursuant to the provisions of Section 8 hereof.
(f) CORPORATION. The term "Corporation" means the corporation
filing this certificate and is sometimes herein referred to the
"Company".
(g) REGISTERED HOLDER. The term "Registered Holder" means the
holder of a share of Series A Stock as shown on the books and records
of the Corporation.
PART 7. CONVERSION RIGHTS.
7.01 DESCRIPTION AND CONVERSION PROCEDURE. The Series A shares shall be
convertible into an aggregate of 200,000 shares of the Common Stock of
the Corporation as hereinafter set forth.
(a) CONVERSION RiGHTS.
(i) Optional Conversion by the Holder. Except as expressly
herein provided otherwise, the Registered Holder of each share
of Series A Stock may exercise all or a portion of the
conversion rights at any time or from time to time after the
date of issuance and prior to the earlier to occur of (x) the
Corporation Conversion Date, (y) the Mandatory Conversion
Date, or (z) the date of redemption of the shares of such
Series A Stock;
(ii) Mandatory Conversion. On June 30, 2001 (the "Mandatory
Conversion Date"), each share of Series A Stock shall,
automatically and without further action on the part of any
Registered Holder of Series A Stock, be converted into the
number of shares of fully paid and nonassessable Common Stock
derived by dividing the Liquidation Preference by the
Conversion Price. Upon such conversion, each share of Series A
Stock shall be canceled and not subject to reissuance. On or
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before the twentieth (20th) Business Day prior to the
Mandatory Conversion Date, the Corporation shall provide
written notice (the "Mandatory Conversion Notice") to the
holders hereof of the Corporation's intention not to exercise
the redemption option provided for in Section 3 hereof and to
allow the shares of Series A Stock to automatically convert
pursuant to this Section 7.01 (a) (ii). The immediately
preceding sentence notwithstanding, the Corporation shall not
be deemed to have waived its right to redeem the Series A
Stock pursuant to Section 3 hereof by virtue of the issuance
of the Mandatory Conversion Notice;
(iii) Optional Conversion by the Corporation. On the tenth
(10th) Business Day (the "Corporation Conversion Date")
immediately following the fifth (5th) consecutive Trading Day
(the "Trigger Date") on which the Market Price of the Common
Stock equals or exceeds $10.00 per share (the "Target Price"),
the Corporation may (but has no obligation to) cause each
outstanding shares of Series A Stock (automatically and
without further action on the part of any holder of
outstanding shares of Series A Stock) be converted into the
number of shares of fully paid and nonassessable Common Stock
derived by dividing the Liquidation Preference by the
Conversion Price. Upon such conversion, each share of Series A
Stock shall be canceled and not subject to reissuance. On or
before the fifth (5th) Business Day following the Trigger
Date, the Corporation shall provide written notice (the
"Corporation Conversion Notice") to the holders of shares of
Series A Stock of the Corporation's intention not to exercise
the redemption option provided for in Section 3 hereof and to
allow the shares of Series A Stock to automatically convert
pursuant to this Section 7.01 (a) (iii). The immediately
preceding sentence notwithstanding, the Corporation shall not
be deemed to have waived its right to redeem the Series A
stock pursuant to Section 3 hereof by virtue of the issuance
of the Corporation Conversion Notice. Notwithstanding the
foregoing, the Corporation may elect not to exercise the
conversion rights set forth in this paragraph 7.01 (a) (iii)
by delivery of a written notice to that effect at any time
prior to the Trigger Date (whether or not a Corporation
Conversion Notice has been issued). Any waiver of a particular
Trigger Date shall not prejudice in any manner the
Corporation's rights under this paragraph 7.01 (a) (iii) or
Section 3. hereof.
(b) EXERCISE PROCEDURE. Any shares of Series A Stock shall be
deemed to have been exercised (the "Exercise Time") when the
Corporation shall have received the Certificate evidencing such shares
appropriately endorsed to reflect conversion thereof; whereupon the
Corporation shall issue so many shares of its Common Stock ("Conversion
Stock") computed on the basis of one share of Common Stock for $5.00 of
Liquidation Value of the shares of Series A Stock so converted.
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(c) DELIVERY OF NEW CERTIFICATES. Certificates for Conversion
Shares shall be delivered to the Holder named therein within 15 days
after the Exercise Time, acquirable Purchase Rights described in
Section 8.08. Unless all of the shares of Series A Stock evidenced by
the certificate delivered shall have been converted or shall have been
redeemed, the Corporation shall within a 15 day period prepare a new
certificate, substantially identical to that surrendered, representing
the balance of the shares of Series A Stock formerly represented by the
certificate which shall not have converted or redeemed and shall within
the said 15 day period deliver such certificate to the person
designated as the holder thereof.
(d) PAYMENT OF CONVERSION PRICE. Each share of Series A Stock
surrendered shall constitute payment of the Conversion Price equal to
the Liquidation Value of such share surrendered.
(e) RETURN OF CERTIFICATE. The certificates evidencing the
Series A Stock shall be endorsed to reflect the conversion of all or
such portion thereof as the Registered Holder determines to convert.
Unless the certificate surrendered contains an appropriate legend, the
certificate shall be accompanied by an appropriate investment
representation for purposes of confirming the availability of an
exemption from applicability of the registration provisions of the
Securities Act of 1933, as amended, signed by the Registered Holder of
such shares of Series A Stock. If the Conversion Shares are not to be
issued in the name of the Holder to whom the shares of Series A Stock
are registered, such Registered Holder shall also state the name of the
Person to whom the certificate for the Conversion Shares are to be
issued, and if the Conversion Shares to be issued shall not be all the
Conversion Shares into which the shares of Series A Stock may be
converted upon surrender of the shares of Series A Stock certificates
so surrendered, the name of the person to whom shall be delivered a new
certificate evidencing the balance of the shares of Series A Stock.
(f) ASSIGNMENT. Assignment of shares of Series A Stock shall
be in the form set forth on the reverse side of the certificate
evidencing same.
(g) AUTHORIZATION AND ISSUANCE. The Corporation covenants and
agrees that:
(i) the Conversion Shares issuable upon any conversion of any
shares of Series A Stock shall be deemed to have been issued
to the person exercising such conversion privilege at the
Exercise Time, and the person exercising such conversion
privilege shall be deemed for all purposes to have become the
record holder of such Conversion Shares at the Exercise Time;
(ii) all Conversion Shares which may be issued upon any
conversion of any shares of Series A Stock will, upon
issuance, be fully paid and
8
<PAGE> 9
nonassessable and free from all taxes, liens and charges with
respect to the issue thereof;
(iii) The Corporation will take all such action as may be
necessary to assure that all Conversion Shares issuable upon
conversion of Series A Stock may be issued without violation
of any applicable law or regulation or of any requirements of
any domestic securities exchange upon which securities of the
same class may be listed. The Corporation will not take any
action which would result in any adjustment of the Conversion
Price if the total number of shares of Common Stock issuable
after such action upon conversion of all Series A Stock
together with all shares of Common Stock then outstanding and
all shares of Common Stock then issuable upon the exercise of
all outstanding options, warrants, conversion and other
rights, would exceed the total number of shares of Common
Stock then authorized by the Corporation's Certificate of
Incorporation;
(iv) the issuance of certificates for Conversion Shares upon
conversion of Series A Stock shall be made without charge to
the Registered Holder thereof for any issuance tax in respect
thereof or other cost incurred by the Corporation in
connection with the conversion of the Series A Stock and the
related issuance of Conversion Shares; and
(v) The Corporation will at no time close its transfer books
against the transfer of the Series A Stock or of any
Conversion Share issued or issuable upon the conversion of the
Series A Stock in any manner which interferes with the timely
conversion of the Series A Stock.
(h) TRANSFERABILITY. The shares of Series A Stock and all
rights evidenced thereby are transferable on the Corporation's books by
the Registered Holder in person or by duly authorized attorney upon
surrender of certificate(s) evidencing said shares of Series A Stock
properly endorsed at the Corporation's principal office provided that
the Registered Holder complies with the provisions governing transfer
set forth in Section 4 of the Agreement.
(i) BREAKUP OF CERTIFICATES. Each certificate evidencing
shares of Series A Stock is exchangeable, upon the surrender of the
certificate by the Registered Holder at the Corporation's principal
office, for a new certificate or certificates of like tenor
representing in the aggregate the right to purchase the number of
Conversion Shares which may be purchased under the Certificate
surrendered, each of which new certificates shall represent the right
to purchase the number of Conversion Shares as shall be designated by
the Registered Holder of this certificate at the time of such
surrender.
PART 8. ANTIDILUTION PROVISIONS.
8.01 ADJUSTMENT OF NUMBER OF SHARES. In order to prevent
dilution of the rights granted hereunder, the Conversion Price shall be
subject to adjustment
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<PAGE> 10
from time to time in accordance with this Part 8. At any given time the
Conversion Price, whether as the Initial Price of $5.00 per share or as
last adjusted, shall be that dollar (or part of a dollar) amount the
payment of which shall be sufficient at the given time to acquire one
Conversion Share. Upon each adjustment of the Conversion Price pursuant
to this Part 8, the Registered Holder of the shares of Series A Stock
shall thereafter be entitled to acquire upon exercise, at the
Conversion Price resulting from such adjustment, the number of
Conversion Shares obtainable by multiplying the Conversion Price in
effect immediately prior to such adjustment by the number of Conversion
Shares acquirable immediately prior to such adjustment and dividing the
product thereof by the Conversion Price resulting from such adjustment.
8.02 LIQUIDATING DIVIDENDS. In the event the Corporation shall declare
a dividend upon the Common Stock (other than a dividend payable in
Common Stock) payable otherwise than out of earnings or earned surplus,
determined in accordance with generally accepted accounting principles,
including the making of appropriate deductions for minority interests,
if any, in subsidiaries (herein referred to as "Liquidating
Dividends"), then as soon as possible after the conversion of any
shares of Series A Stock the Corporation shall pay to the person
converting such shares of Series A Stock an amount equal to the
aggregate value at the time of such exercise of all Liquidating
Dividends (including but not limited to the Common Stock which would
have been issued at the time of such earlier exercise and all other
securities which would have been issued with respect to such Common
Stock by reason of stock splits, stock dividends, mergers or
reorganizations, or for any other reason). For the purposes of this
Section 8.02, a dividend other than in cash shall be considered payable
out of earnings or earned surplus only to the extent that such earnings
or earned surplus are charged an amount equal to the fair value of such
dividend.
8.03 SUBDIVISION OR COMBINATION OF STOCK. In case the Corporation shall
at any time subdivide (other than by means of a dividend payable in
Common Stock) its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be appropriately reduced, and, conversely, in
case the outstanding shares of Common Stock of the Corporation shall be
combined into a smaller number of shares, the Conversion Price in
effect immediately prior to such combination shall be proportionately
increased.
8.04 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization or reclassification of the capital stock
of the Corporation, or consolidation or merger of the Corporation with
another corporation, or the sale of all or substantially all of its
assets to another corporation shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities
or assets with respect to or in exchange for Common Stock, then, as a
condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby the
Registered Holders of the shares of Series A Stock shall thereafter
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<PAGE> 11
have the right to acquire and receive upon conversion of the shares of
Series A Stock such shares of stock, securities or assets as would have
been issuable or payable (as part of the reorganization,
reclassification, consolidation, merger or sale) with respect to or in
exchange for such number of outstanding shares of the Corporation's
Common Stock as would have been received upon conversion of the Series
A Stock immediately before such reorganization, reclassification,
consolidation, merger or sale and the number of Common Shares that
would have been so received), and in any such case appropriate
provisions shall be made with respect to the rights and interests of
the holders of the Series A Stock to the end that the provisions hereof
(including without limitation provisions for adjustments of the
Conversion Price and of the number of Conversion Shares acquirable and
receivable upon the conversion of the Series A Stock) shall thereafter
be applicable, in relation to any shares of stock, securities or assets
thereafter deliverable upon the conversion of the Series A Stock. In
the event of a merger or consolidation of the Corporation with or into
another corporation or the sale of all or substantially all of its
assets as a result of which a number of shares of Common Stock of the
surviving or purchasing corporation, greater or lesser than the number
of shares of Common Stock of the Corporation outstanding immediately
prior to such merger, consolidation or purchase are issuable to holders
of Common Stock of the Corporation, then the Conversion Price in effect
immediately prior to such merger, consolidation or purchase shall be
adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock of the
Corporation.
8.05 NOTICES. In the event that:
(a) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the
Company with, or sale of all or substantially all of its assets to,
another corporation; or
(b) there shall be a voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then, in connection with such event, the Company shall give to the
Registered Holders of the shares of Series A Stock at least twenty (20)
days prior written notice of the date when the same shall take place.
Such notice shall also specify the date on which the holders of Common
Stock shall be entitled to exchange their Common Stock for securities
or other property deliverable upon such reorganization,
reclassification, consolidation, merger or sale, dissolution,
liquidation or winding up, as the case may be. Each such written notice
shall be given by first class mail, postage prepaid, address to the
Registered Holders of the Series A Stock.
8.07 CERTAIN EVENTS. If any event occurs as to which, in the opinion of
the Board of Directors of the Company, the provisions of this Part 8
are not strictly applicable or if strictly applicable would not fairly
protect the rights of the holders
11
<PAGE> 12
of the Series A Stock in accordance with the essential intent and
principles of such provisions, then the Board of Directors shall make
an adjustment in the application of such provision, in accordance with
such essential intent and principles, so as to protect such rights as
aforesaid, but in no event shall any adjustment have the effect of
increasing the Conversion Price as otherwise determined pursuant to any
of the provisions of this Part 8 except in the case of a combination of
shares of a type contemplated in Section 8.03.
IN WITNESS WHEREOF, we have hereunto set our hands and seals as
President and Secretary, respectively, of the Corporation this 24th day
of September, 1999, and we hereby affirm that the foregoing Certificate
is our act and deed and the act and deed of the Corporation and that
the facts stated therein are true.
/s/ BARRETT N. WISSMAN
-------------------------------
Barrett N. Wissman, President
/s/ STUART J. CHASANOFF
-------------------------------
Stuart J. Chasanoff, Secretary
12
<PAGE> 1
eVENTURES GROUP, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into on the 22nd day of September, 1999, by and among eVENTURES GROUP,
INC., a Delaware corporation (the "COMPANY"), and the persons and entities
listed on Schedule 1 attached hereto (collectively, the "STOCKHOLDERS"), as
Holders of shares of common stock, par value $.00002 per share, of the Company
("COMMON STOCK").
W I T N E S S E T H:
WHEREAS, the Company, eVentures Holdings, L.L.C., a Delaware limited
liability company and wholly-owned subsidiary of the Company ("IEOH MERGER
SUBSIDIARY"), IEO Holdings Limited, a Nevis, West Indies corporation ("IEOH"),
Mick Y. Wettreich and various other persons have entered into that certain
Agreement and Plan of Reorganization dated of even date herewith (the "IEOH
REORGANIZATION AGREEMENT"), pursuant to which certain of the Stockholders
acquired shares of the Company's Common Stock; and
WHEREAS, in connection with the IEOH Reorganization Agreement, the
parties have agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and in the IEOH Reorganization Agreement, the
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. REGISTRABLE SHARES. For purposes of this Agreement "REGISTRABLE
SHARES" shall mean, at any time, and with respect to any Stockholder or
Qualified Transferee (as defined in Section 9(g) below), the shares of Common
Stock held by such Stockholder or Qualified Transferee which constitute
Restricted Securities (defined below), and "HOLDER" shall mean any Stockholder
or Qualified Transferee holding Registrable Shares. As to any particular
Registrable Shares, once issued, such Registrable Shares shall cease to be
Registrable Shares (1) when such Registrable Shares have been registered under
the Securities Act of 1933, as amended or any successor Federal statute (the
"ACT"), the Registration Statement in connection therewith has been declared
effective and they have been disposed of pursuant to and in the manner described
in such effective Registration Statement, (2) when such Registrable Shares are
sold or distributed pursuant to Rule 144, (3) when such Registrable Shares have
ceased to be outstanding or (4) when such Registrable Shares have been
transferred to a person or entity other than a Qualified Transferee. For
purposes of this Agreement, the term "RESTRICTED SECURITIES" shall mean, at any
time and with respect to any Stockholder or Qualified Transferee, the shares of
Common Stock and any other securities which by their terms are directly or
indirectly
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REGISTRATION RIGHTS AGREEMENT-Page 1
<PAGE> 2
exercisable or exchangeable for or convertible into Common Stock (other than
stock options granted to employees or directors of the Company in their capacity
as such, or Common Stock issuable upon the exercise thereof), and any securities
received on or with respect to any of the foregoing securities, which are held
by such Stockholder or Qualified Transferee and which theretofor have not been
sold to the public pursuant to a Registration Statement or pursuant to Rule 144
under the Securities Act. For purposes of this Agreement, the term "REGISTRATION
STATEMENT" shall mean any registration statement of the Company which covers any
of the Registrable Shares, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus (defined herein) contained therein, all exhibits
thereto and all material incorporated by reference therein. For purposes of this
Agreement, the term "PROSPECTUS" shall mean the prospectus included in a
Registration Statement, including any prospectus subject to completion, and any
such Prospectus as amended or supplemented by any prospectus supplement with
respect to the terms of the offering of any portion of the Registrable Shares
and, in each case, by all other amendments and supplements to such prospectus,
including post-effective amendments, and in each case including all material
incorporated by reference therein. For purposes of this Agreement, the term
"RULE 144" shall mean Rule 144 promulgated under the Securities Act or any
successor or similar rule thereto, as may be enacted by the Securities and
Exchange Commission from time to time.
2. DEMAND REGISTRATIONS.
(a) REQUESTS FOR REGISTRATION.
(i) At any time and from time to time after the third month
following the date hereof through the fourth anniversary of the
date of this Agreement (the "DEMAND PERIOD"), Holders owning an
aggregate of at least thirty-five (35%) of the aggregate number
of Registrable Shares shall have the right to request that the
Company file a registration statement under the Securities Act
covering the registration of all or any part of their
Registrable Shares (each, a "DEMAND REGISTRATION"), provided,
however, that unless the reasonably anticipated aggregate
offering price (net of underwriting discounts and commissions)
for the Registrable Shares proposed to be registered shall equal
at least $5,000,000, then such request shall cover the
registration of at least fifty percent (50%) of the Registrable
Shares. Any request (a "REGISTRATION REQUEST") for a Demand
Registration shall specify (x) the approximate number of shares
of Registrable Shares requested to be registered, (y) the
intended method of distribution of such shares, and (z) any
Lock-up Conditions to be imposed pursuant to Section 8 hereof.
Within ten days after the date of sending of such request, the
Company will give written notice of such requested registration
to all other Holders of Registrable Shares and will include in
such registration all shares of Registrable Shares which Holders
of Registrable Shares request the Company to include in such
registration by
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REGISTRATION RIGHTS AGREEMENT-Page 2
<PAGE> 3
written notice given to the Company within thirty (30) days
after the date of sending of the Company's notice.
(ii) The Company will be required to effect up to three (3)
Demand Registrations pursuant to this Section 2(a).
(iii) A registration will not count as one of the Demand
Registrations effected by the Company unless (a) the Holders of
Registrable Shares are able to register and, if the registration
is a firm commitment public offering, sell the Registrable
Shares requested to be included in such registration or (b) the
Registration Statement relating to a registration is withdrawn
or abandoned at the request of the Holders of a majority of the
Registrable Shares covered by such Registration Statement (other
than as a result of a material adverse change to the Company or
following a postponement by the Company pursuant to Section 2(d)
herein).
(iv) The Company will not include in any Demand Registration
any securities other than Registrable Shares and securities to
be registered for offering and sale on behalf of the Company
without the prior written consent of the Holders of a majority
of the Registrable Shares included in such registration. If the
managing underwriters for any such offering advise the Company
in writing that in their opinion the number of Registrable
Shares and, if permitted hereunder, other securities in such
offering, exceeds the number of Registrable Shares and other
securities, if any, which can be sold in an orderly manner in
such offering within a price range acceptable to the Holders of
a majority of the Registrable Shares initially requesting
registration, the Company will include in such registration,
prior to the inclusion of any securities which are not
Registrable Shares, the number of Registrable Shares requested
to be included which in the opinion of such underwriters can be
sold in an orderly manner within the price range of such
offering, pro rata among the respective Holders thereof on the
basis of the number of Registrable Shares which each such Holder
has requested the Company to include in such registration.
(b) SELECTION OF UNDERWRITER. The Holders of a majority of the
Registrable Shares to be included in a registration will have the right
to select one or more underwriters to manage the offering, subject to
the Company's approval which will not be unreasonably withheld or
delayed. The Company will have no obligation, however, to locate an
underwriter for the Holders.
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REGISTRATION RIGHTS AGREEMENT-Page 3
<PAGE> 4
(c) REGISTRATIONS ON FORM S-3. The Company shall use its reasonable
best efforts to qualify for registration on Form S-3 or any comparable
or successor form or forms. At any time during the Demand Period, after
the Company has qualified for the use of Form S-3, in addition to the
rights contained in Section 2(a), the Holders of at least 35% of the
aggregate number of Registrable Shares shall have the right to request
registrations on Form S-3; provided, that the Company shall not be
required to effect a registration on Form S-3 pursuant to this Section
2(c) unless the reasonably anticipated aggregate offering price (net of
underwriting discounts and commissions) for the Registrable Shares
proposed to be registered shall equal at least $1.5 million. Such
requests shall be in writing and shall state the number of Registrable
Shares proposed to be disposed of and the intended method of
distribution of such shares by such Holder or Holders. The Company shall
be required to effect up to two (2) registrations pursuant to this
Section 2(c), provided, however, that a registration shall not count as
one of the two unless it meets the requirements set forth in Section
2(a)(iii) above.
(d) RIGHT TO DEFER REGISTRATION. The Company shall not be obligated
to effect any registration within ninety (90) days after the effective
date of a previous registration statement in which the Holders of
Registrable Shares participated or were given an opportunity to
participate and declined to do so. The Company may postpone for up to
ninety (90) days the filing or the effectiveness of a registration
statement for a demand registration set forth above if (i) the Board of
Directors determines, reasonably and in good faith, that such
registration might have an adverse effect on any proposal or plan by the
Company, including, without limitation, a plan or proposal to engage in
any acquisition, merger, consolidation, tender offer or similar
transaction or (ii) any other material, nonpublic development or
transaction is pending and the filing of such registration would require
disclosure of such development or transaction at a time when the Company
did not otherwise have a duty to disclose such development or
transaction; provided, that the Company may not postpone the filing or
effectiveness of a registration statement pursuant to this sentence more
frequently than twice during any period of twelve (12) consecutive
months. If, after a registration statement becomes effective, the
Company advises the Holders of Registered Shares that the Company
considers it necessary in accordance with the Company's obligations
under applicable securities laws for the registration statement to be
amended, the Holders of such shares shall suspend any further sales of
their Registered Shares until the Company advises them that the
registration statement has been amended. The one (1) year time period
referred to in Section 4 during which the registration statement must
be kept current after its effective date shall be extended for an
additional number of business days equal to the number of business days
during which the rights to sell shares were suspended pursuant to the
preceding sentence.
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REGISTRATION RIGHTS AGREEMENT-Page 4
<PAGE> 5
3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. If the Company proposes to register any of
its securities under the Securities Act (other than pursuant to (i) a
Demand Registration, (ii) a registration solely in connection with an
employee benefit or stock ownership plan on Form S-8 or any comparable
or successor form, (iii) a registration solely in connection with an
acquisition consummated in a manner which would permit registration of
such securities to the public on Form S-4 or any comparable or successor
form or (iv) a "shelf" or similar registration for use solely in
connection with future acquisitions), and the registration form to be
used may be used for the registration of Registrable Shares (a
"PIGGYBACK REGISTRATION"), the Company will give prompt written notice
to all Holders of Registrable Shares of its intention to effect such a
registration (each a "PIGGYBACK NOTICE"). Subject to Section 3(b) below,
the Company will include in such registration all shares of Registrable
Shares which Holders of Registrable Shares request the Company to
include in such registration by written notice given to the Company
within twenty (20) days after the date of sending of the Company's
notice.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities by the
Company and the managing underwriters for such offering advise the
Company in writing that in their opinion the number of securities
requested to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to the Company, the Company will include in such registration
(i) first, the securities proposed to be sold by the Company, (ii)
second, the Registrable Shares requested to be included in such
registration, pro rata among the Holders of such Registrable Shares on
the basis of the number of shares owned by each such Holder, and (iii)
third, other securities requested to be included in such registration.
(c) PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration
relates to an underwritten public offering of equity securities held
solely by Holders of the Company's securities and the managing
underwriters advise the Company in writing that in their opinion the
number of securities requested to be included in such registration
exceeds the number which can be sold in an orderly manner in such
offering within a price range acceptable to the Holders initially
requesting such registration, the Company will include in such
registration (i) first, the securities requested to be included therein
by the Holders requesting such registration, (ii) second, the
Registrable Shares requested to be included in such registration, pro
rata among the Holders of such Registrable Shares on the basis of the
number of shares owned by each such Holder and (iii) third, other
securities requested to be included in such registration.
4. REGISTRATION PROCEDURES. Whenever the Holders of Registrable Shares
have requested that any Registrable Shares be registered pursuant to this
Agreement, the Company will use its best efforts to effect the registration and
the sale of such Registrable Shares in
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REGISTRATION RIGHTS AGREEMENT-Page 5
<PAGE> 6
accordance with the intended method of distribution thereof and will as
expeditiously as possible:
(i) prepare and file with the Securities and Exchange
Commission (the "COMMISSION") a Registration Statement with
respect to such Registrable Shares on any appropriate form under
the Securities Act, which form shall be selected by the Company
and shall be available for the sale of Registrable Shares in
accordance with the intended method or methods of distribution
thereof and use its best efforts to cause such Registration
Statement to become effective, provided that before filing a
Registration Statement or prospectus or any amendments or
supplements thereto, the Company will furnish to the counsel
selected by the Holders of a majority of the Registrable Shares
included in such Registration Statement copies of all such
documents proposed to be filed, which documents will be subject
to the review of such counsel;
(ii) prepare and file with the Commission such amendments
and post-effective amendments to such Registration Statement and
supplements to the Prospectus used in connection therewith (and
to file the Prospectus, as so supplemented, under Rule 424 under
the Securities Act, if required) as may be necessary to keep
such Registration Statement effective for a period of up to one
(1) year, and comply with the provisions of the Securities Act
with respect to the disposition of all securities included in
such Registration Statement during such period in accordance
with the intended methods of distribution by the selling Holders
thereof set forth in such Registration Statement or supplement
to such Prospectus;
(iii) furnish to each selling Holder of Registrable Shares
such number of copies of such Registration Statement, each
amendment and supplement thereto (in each case including all
exhibits), the Prospectus included in such Registration
Statement (including each preliminary Prospectus) and such other
documents as such selling Holder may reasonably request in order
to facilitate the disposition of the Registrable Shares owned by
such selling Holder;
(iv) notify the selling Holders of Registrable Shares and
the managing underwriters, if any, promptly and (if requested by
any such Stockholder) confirm such advice in writing, (A) when a
Prospectus, including any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the
same has become effective, (B) of any request by the Commission
for amendments or supplements to a Registration Statement or
related prospectus or for additional information, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose, (D) of the receipt by the
Company of any notification with
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REGISTRATION RIGHTS AGREEMENT-Page 6
<PAGE> 7
respect to the suspension of the qualification of any of the
Registrable Shares for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose,
and (E) of the existence of any fact which results in a
Registration Statement, a Prospectus or any document
incorporated therein by reference containing an untrue statement
of a material fact or omitting to state a material fact
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(v) use its best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws
of such jurisdictions as any selling Holder reasonably requests
and do any and all other acts and things which may be reasonably
necessary or advisable to enable such selling Holder to
consummate the disposition in such jurisdictions of the
Registrable Shares owned by such selling Holder, provided that
the Company will not be required (A) to qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph, (B) to subject
itself to taxation in any such jurisdiction, or (C) to consent
to general service of process in any such jurisdiction;
(vi) notify each selling Holder of such Registrable Shares,
at any time when a Prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any
event referred to in clause (iv)(E) of this Section 4, and, at
the request of any such seller, prepare a supplement to such
Prospectus or a post-effective amendment to such Registration
Statement so that, as thereafter delivered to the purchasers of
such Registrable Shares, such Prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(vii) cause all such Registrable Shares to be listed on each
securities exchange on which similar securities issued by the
Company are then listed and to be qualified for trading on each
system on which similar securities issued by the Company are
from time to time qualified;
(viii) provide a transfer agent and registrar for all such
Registrable Shares not later than the effective date of such
Registration Statement and thereafter maintain such transfer
agent and registrar;
(ix) enter into such customary agreements (including
underwriting agreements in customary form) and take all such
other actions as the Holders of a majority of the Registrable
Shares being sold or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of
such Registrable Shares;
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REGISTRATION RIGHTS AGREEMENT-Page 7
<PAGE> 8
(x) in connection with an underwritten offering, use its
best efforts to (A) obtain opinions of counsel to the Company
and updates thereof, which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the managing
underwriters, addressed to the underwriters, covering the
matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such underwriters; and (B) obtain "cold
comfort" letters and updates thereof from the Company's
independent certified public accountants, addressed to the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort"
letters to underwriters in connection with underwritten
offerings; and make available for inspection during normal
business hours by any underwriter participating in any
disposition pursuant to a registration statement, and any
attorney or accountant retained by such underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers,
directors and employees to supply all information reasonably
requested by such underwriter, attorney or accountant in
connection with such registration statement; provided that such
underwriters execute prior thereto an agreement with the Company
that all such records, information or documents shall be kept
confidential by such persons unless (1) disclosure of such
records, information or documents is required by law or by a
court or administrative order or (2) such records, information
or documents are or become (but only when they become) generally
available to the public other than as a result of disclosure in
violation of this paragraph; and make available for inspection
by any underwriter participating in any disposition pursuant to
such registration statement and any attorney, accountant or
other agent retained by any such underwriter, all financial and
other records, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information
reasonably requested by any such underwriter, attorney,
accountant or agent in connection with such registration
statement;
(xi) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(xii) permit any Holder of Registrable Shares which might be
deemed, in the sole and exclusive judgment of such Holder, to be
an underwriter or a controlling person of the Company, to
participate in the preparation of such registration or
comparable statement and to require the insertion therein of
material, furnished to the Company in writing, which in the
reasonable judgment of such Holder and its counsel should be
included;
(xiii) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of
any order suspending or preventing
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 8
<PAGE> 9
the use of any related prospectus or suspending the
qualification of any Registrable Shares included in such
registration statement for sale in any jurisdiction, the Company
will use its reasonable efforts promptly to obtain the
withdrawal of such order; and
(xiv) provide a CUSIP number for all Registrable Shares, not
later than the effective date of the applicable registration
statement.
If any such registration or comparable statement refers to any Holder by name or
otherwise as the Holder of any securities of the Company and if, in the sole and
exclusive judgment of such Holder, such Holder is or might be deemed to be a
controlling person of the Company, such Holder shall have the right to require
(a) the inclusion in such registration statement of language, in form and
substance reasonably satisfactory to such Holder, to the effect that the holding
of such securities by such Holder is not to be construed as a recommendation by
such Holder of the investment quality of the Company's securities covered
thereby and that such holding does not imply that such Holder will assist in
meeting any future financial requirements of the Company, or (b) in the event
that such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force, the deletion of the
reference to such Holder; provided, that with respect to this clause (b) such
Holder shall furnish to the Company an opinion of counsel to such effect, which
opinion and counsel shall be reasonably satisfactory to the Company.
5. REGISTRATION EXPENSES.
(a) DEFINITION. The term "REGISTRATION EXPENSES" means any expenses
incident to the Company's performance of or compliance with this
Agreement, including, without limitation, all registration and filing
fees, listing fees, fees and expenses of compliance with securities or
blue sky laws, printing expenses, messenger and delivery expenses,
internal expenses, the fees and expenses of counsel for the Company (but
not the fees and expenses of counsel to the Holders of the Registrable
Shares included in such registration) and all independent certified
public accountants, underwriting fees and expenses (excluding discounts
and commissions attributable to the Registrable Shares, which shall be
paid by the selling Holders out of the proceeds of the offering) and the
fees and expenses of any other Persons (defined below) retained by the
Company. For purposes of this Agreement, the term "PERSON" shall be
construed as broadly as possible and shall include an individual or
natural person, a partnership (including a limited liability
partnership), a company, an association, a joint stock company, a
limited liability company, a trust, a joint venture, an unincorporated
entity and a governmental authority.
(b) PAYMENT. The Company shall pay the Registration Expenses in
connection with any Demand Registration, any and all registrations on
Form S-3 pursuant to Section 2(c), and any and all Piggyback
Registrations.
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 9
<PAGE> 10
6. INDEMNIFICATION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
to the extent permitted by law, each Holder of Registrable Shares, such
holder's general and limited partners, officers and directors and each
Person who controls such Holder (within the meaning of the Securities
Act) against all losses, claims, damages, liabilities and expenses
caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary
prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in any information
furnished in writing to the Company by such Holder expressly for use
therein. In connection with an underwritten offering, the Company will
indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect to the
indemnification of the Holders of Registrable Shares.
(b) INDEMNIFICATION BY HOLDERS. In connection with any registration
statement in which a Holder of Registrable Shares is participating, each
such Holder will furnish to the Company in writing such information and
affidavits as the Company reasonably requests for use in connection with
any such registration statement or prospectus and, to the extent
permitted by law, will indemnify the Company, its directors and officers
and each Person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of
material fact contained in the registration statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto or
any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or
omission is contained in any written information or affidavit so
furnished in writing by such Holder; provided, that the obligation to
indemnify will be individual to each Holder and will be limited to the
net amount of proceeds received by such Holder from the sale of
Registrable Shares pursuant to such registration statement.
(c) NOTICE; DEFENSE OF CLAIMS. Any Person entitled to
indemnification hereunder will (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel
reasonably satisfactory to the indemnified party. If such defense is
assumed, the indemnifying party will not be subject to any liability for
any settlement made by the indemnified party without its consent (but
such consent will not be unreasonably withheld or delayed). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 10
<PAGE> 11
expenses of more than one special and one local counsel for all parties
indemnified by such indemnifying party with respect to such claim.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 6 is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, liability, claim,
damage or expense referred to herein, then the indemnifying party, in
lieu of indemnifying such indemnified party hereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of
such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party
on the other from the offering of the Registrable Shares or (ii) if the
allocation provided for by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the indemnifying party or parties on the one hand and the
indemnified party on the other hand in connection with the statements or
omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof).
The relative fault of the indemnifying party and of the indemnified
party shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative
intent, knowledge, access to information, and opportunity to correct or
prevent such statement or omission. The obligation to contribute will be
individual to each Holder of Registrable Shares and will be limited to
the amount by which the net amount of proceeds received by such Holder
from the sale of Registrable Shares exceeds the amount of losses,
liabilities, damages, and expenses which such Holder has otherwise been
required to pay by reason of such statements or omissions.
(e) SURVIVAL. The indemnification provided for under this Agreement
will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director
or controlling Person of such indemnified party and will survive the
transfer of securities.
(f) UNDERWRITING AGREEMENT. To the extent that the provisions on
indemnification and contribution contained in the underwriting
agreement entered into in connection with an underwritten public
offering are in conflict with the provisions of this Section 6, the
provisions contained in the underwriting agreement shall control.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements, (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements, provided, that no
Holder of
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 11
<PAGE> 12
Registrable Shares included in any underwritten registration shall be required
to make any representations or warranties to the Company or the underwriters
other than representations and warranties regarding such Holder and such
Holder's intended method of distribution, and (iii) if requested by the managing
underwriter or underwriters or the Demanding Persons (as defined below), agrees
not to sell Registrable Shares or other securities held by such Person in any
transaction other than pursuant to such underwriting for such period following
the effective date of the registration statement relating to such underwriting
as determined by either the Board of Directors or the Demanding Persons;
provided, that no Holder of Registrable Shares shall be required to enter into
such an agreement unless each other Holder of Registrable Shares, each director
and executive officer of the Company and each other Holder of at least one
percent of the Common Stock then outstanding enters into a substantially
identical agreement relating to such underwriting.
8. STOCKHOLDER LOCK-UP; AGREEMENT NOT TO SELL. During the two-year
period following the date hereof, no Holder of Registrable Shares may make any
public sale of Registrable Shares (pursuant to a Registration Statement, Rule
144 or otherwise) other than in compliance with any Lock-up Conditions then in
effect. If no Lock-up Conditions are then in effect, no public sales shall be
permitted by any Holder without the written consent of the Holders of
thirty-five (35%) of the Registrable Shares (such Holders consenting to a waiver
of the restrictions on the sale of Registrable Shares being referred to as
"CONSENTING HOLDERS"); provided that the Consenting Holders may not consent to
any waiver for themselves unless the same waivers are made available to all
Holders of Registrable Shares. Notwithstanding anything to the contrary
contained herein, each Holder hereby agrees to comply with the conditions or
restrictions (the "LOCK-UP CONDITIONS") imposed at the time of such demand by a
majority of Holders of a majority of the Registrable Shares (the "DEMANDING
PERSONS") making a request for such Demand Registration pursuant to Section 2(a)
of this Agreement, including, without limitation, any restriction on a Holder's
ability to sell, pledge, hypothecate, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of all or a portion of the
Registrable Shares, for a specified period following the effective date of such
registration; provided, however, that nothing herein shall prevent any Holder
(a) that is a partnership or corporation from making a distribution of
Registrable Shares to the partners or shareholders thereof that are otherwise in
compliance with applicable securities laws, so long as such permitted
distributees agree to be bound by the terms and conditions of the Lock-up
Conditions; (b) that desires to sell any Registrable Shares in a private
transaction in compliance with applicable securities laws from consummating such
a sale so long as the purchaser in any private sale agrees in writing to be
bound by the restrictions set forth in this Section 8; or (c) that is an
individual, from making a transfer of Registrable Shares by gift, will or the
laws of descent and distribution, subject to the restrictions set forth in this
Section 8. Any Lock-up Conditions imposed by a Demanding Person shall apply to
each Holder of Registrable Shares (including without limitation, any Demanding
Person).
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 12
<PAGE> 13
9. MISCELLANEOUS.
(a) INFORMATION AND REPORTING.
(i) The Company shall, at all times during which it is
neither subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), nor exempt from reporting pursuant to Rule
12g3-2(b) under the Exchange Act, upon the written request of
any Stockholder, provide in writing to such Stockholder and to
any prospective transferee of the Registrable Shares of such
Stockholder the information concerning the Company described in
Rule 144A(d)(4) or any successor rule under the Securities Act
("RULE 144A INFORMATION"). Upon the written request of any
Stockholder, the Company shall cooperate with and assist such
Stockholder or any member of the National Association of
Securities Dealers, Inc. PORTAL system in applying to designate
and thereafter maintain the eligibility of the Registrable
Shares for trading through PORTAL. The Company's obligations
under this Section 9(a)(i) shall at all times be contingent upon
receipt from the prospective transferee of Registrable Shares of
a written agreement to take all reasonable precautions to
safeguard the Rule 144A Information from disclosure to anyone
other than Persons who will assist such transferee in evaluating
the purchase of any Registrable Shares.
(ii) When it is first legally required to do so, the Company
shall register its Common Stock under Section 12 of the Exchange
Act and shall keep effective such registration and shall timely
file such information, documents and reports as the Commission
may require or prescribe under Section 13 of the Exchange Act.
From and after the effective date of the first registration
statement filed by the Company under the Securities Act, the
Company shall (whether or not it shall then be required to do
so) timely file such information, documents and reports which a
corporation, partnership or other entity subject to Section 13
or 15(d) (whichever is applicable) of the Exchange Act is
required to file. The Company shall promptly upon request
furnish any Holder of Registrable Shares (a) a written statement
by the Company that it has complied with the reporting
requirements of Section 13 or 15(d) of the Exchange Act, (b) a
copy of the most recent annual or quarterly report of the
Company, and (c) such other reports and documents filed by the
Company with the Commission as such Holder may reasonably
request in availing itself of an exemption for the sale of
Registrable Shares without registration under the Securities
Act. The Company acknowledges and agrees that the purposes of
the requirements contained in this Section 9(a)(ii) are to
enable any such Holder to comply with the current public
information requirement contained in paragraph (c) of Rule 144
under the Securities Act, should such Holder ever wish to
dispose of any of the securities of the Company acquired by it
without registration under the Securities Act in reliance upon
Rule 144 (or any other similar exemptive provision), and to
qualify the Company for the use of registration statements on
Form S-3. In addition, the Company shall
- --------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT-Page 13
<PAGE> 14
take such other measures and file such other information,
documents and reports, as shall hereafter be required by the
Commission as a condition to the availability of Rule 144 under
the Securities Act (or any similar exemptive provision hereafter
in effect) and the use of Form S-3. The Company also covenants
to use its best efforts, to the extent that it is reasonably
within its power to do so, to qualify for the use of Form S-3.
(b) NO INCONSISTENT AGREEMENTS. The Company will not hereafter (i)
enter into any agreement with respect to its securities which is
inconsistent with or violates the rights granted to the Holders of
Registrable Shares in this Agreement or (ii) grant registration rights
to any other Person (unless consented to by a majority vote of the
Stockholders).
(c) ADJUSTMENTS AFFECTING REGISTRABLE SHARES. The Company will not
take any action, or permit any change to occur, with respect to its
securities for the purpose of materially and adversely affecting the
ability of the Holders of Registrable Shares to include such Registrable
Shares in a registration undertaken pursuant to this Agreement or
materially and adversely affecting the marketability of such Registrable
Shares in any such registration (including, without limitation,
effecting a stock split or a combination of shares), provided that this
Section 9(c) shall not apply to actions or changes with respect to the
Company's business, balance sheet, earnings or revenue where the effect
of such actions or changes on the Registrable Shares is merely
incidental.
(d) NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be
deemed effectively given when delivered personally or by facsimile
transmission or by overnight delivery service or 72 hours after being
mailed by first class certified or registered mail, return recent
requested, postage prepaid:
(i) If to the Company, c/o Stuart Chasanoff, 1601 Elm
Street, Suite 4000, Dallas, Texas 75201, or at such other
address or addresses as may have been furnished in writing by
the Company to the Stockholders.
(ii) If to a Stockholder, to it at its address as set forth
in the applicable IEOH Reorganization Agreement, or at such
other address or addresses as may have been furnished in writing
by such Stockholder with a copy to (which shall not constitute
notice): Arter & Hadden LLP, 1717 Main Street, Suite 4100,
Dallas, Texas 75201, Attention: Victor B. Zanetti, Esq. (Fax:
214.741.7139).
(e) REMEDIES. Any Person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically to
recover damages caused by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. The parties
hereto agree and acknowledge that money damages
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REGISTRATION RIGHTS AGREEMENT-Page 14
<PAGE> 15
may not be an adequate remedy for any breach of the provisions of this
Agreement and that any party may in its sole discretion apply to any
court of law or equity of competent jurisdiction (without posting any
bond or other security) for specific performance and for other
injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.
(f) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, no
amendment, modification, termination or cancellation of this Agreement
shall be effective unless made in writing signed by the Company and the
Holders of a majority of the shares of Registrable Shares; provided that
no amendment may be made to Sections 8 or 9(f) of this Agreement unless
agreed upon by the Company and the Holders of all the Registrable
Shares.
(g) ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Shares pursuant to this Agreement may be
assigned (but only with all related obligations) by a Holder to any
transferee (a "QUALIFIED TRANSFEREE") that acquires from a Holder either
(i) 100,000 or more Registrable Shares or (ii) if less than 100,000
Registrable Shares are owned by a Holder at the time of a transfer, all
of the Registrable Shares owned by such Holder, in either case in
connection with the permitted transfer of Registrable Shares. Such
assignment shall not affect the rights of Holders hereunder which shall
remain in full force in accordance with the terms hereof. Any
transferring Holder shall provide the Company with prior written notice
of such transfer(s)/assignment(s), provided, however, that the failure
to provide such notice shall not be deemed to preclude assignment
hereunder.
(h) SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
(i) ENTIRE AGREEMENT. This Agreement embodies the entire agreement
of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements relating to such subject matter.
(j) HEADINGS. The headings of this Agreement are for convenience
only and do not constitute a part of this Agreement.
(k) GOVERNING LAW. The construction, validity and interpretation of
this Agreement will be governed by the internal laws of the State of
Delaware without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
(l) FURTHER ASSURANCES. Each party to this Agreement hereby
covenants and agrees, without the necessity of any further
consideration, to execute and deliver any and
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REGISTRATION RIGHTS AGREEMENT-Page 15
<PAGE> 16
all such further documents and take any and all such other actions as
may be necessary or appropriate to carry out the intent and purposes of
this Agreement and to consummate the transactions contemplated hereby.
(m) COUNTERPARTS. This Agreement may be executed by facsimile and in
one or more counterparts, each of which shall be deemed to be an
original, but all of which shall be one and the same document.
(Signature Page Follows)
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REGISTRATION RIGHTS AGREEMENT-Page 16
<PAGE> 17
IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the date first written above.
COMPANY:
eVENTURES GROUP, INC.
By: /s/ BARRETT WISSMAN
----------------------------
Name: Barrett Wissman
----------------------------
Title: President
----------------------------
[SIGNATURE PAGE FOR EACH STOCKHOLDER FOLLOWS]
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REGISTRATION RIGHTS AGREEMENT-Page 17
<PAGE> 18
Signature page to Registration Rights Agreement dated September 22, 1999 among
eVentures Group, Inc. the undersigned and certain of its other Stockholders.
STOCKHOLDER:
/s/ JOHN S. ROBLING, JR.
--------------------------------------
Printed Name: John S. Robling, Jr.
-------------------------
/s/ ARNOLD GLABERSON
--------------------------------------
Printed Name: Arnold Glaberson
-------------------------
/s/ DANIEL STRYKER
--------------------------------------
Printed Name: Daniel Stryker
-------------------------
/s/ STEVEN R. LOGLISCI
--------------------------------------
Printed Name: Steven R. Loglisci
-------------------------
/s/ KEVIN J. LIDDY
--------------------------------------
Printed Name: Kevin J. Liddy
-------------------------
/s/ TREVOR L. HUFFARD
--------------------------------------
Printed Name: Trevor L. Huffard
-------------------------
/s/ KEITH OSER
--------------------------------------
Printed Name: Keith Oser
-------------------------
/s/ TOM BAINBRIDGE
--------------------------------------
Printed Name: Tom Bainbridge
-------------------------
/s/ CHARLES D. MURDOCK IV
--------------------------------------
Printed Name: Charles D. Murdock IV
-------------------------
/s/ SAMUEL LITWIN
--------------------------------------
Printed Name: Samuel Litwin
-------------------------
/s/ MICHAEL A. FISCUS
--------------------------------------
Printed Name: Michael A. Fiscus
-------------------------
/s/ ANNETTE DICKSON
--------------------------------------
Printed Name: Annette Dickson
-------------------------
/s/ WILLIAM H. CARROLL
--------------------------------------
Printed Name: William H. Carroll
-------------------------
SUISSE FINANCE CORPORATION
By: /s/ JAMES E. MARTIN
-----------------------------------
Name: James E. Martin
---------------------------------
Its: Director
----------------------------------
IEO INVESTMENTS LTD.
By: /s/ PIERCE LOUGHRAN
-----------------------------------
Name: Pierce Loughran for Dungate Ltd.
---------------------------------
Its: Director
----------------------------------
INFINITY EMERGING SUBSIDIARY LIMITED
By: /s/ PIERCE LOUGHRAN
-----------------------------------
Name: Pierce Loughran for Dungate Ltd.
---------------------------------
Its: Director
----------------------------------
IEO HOLDINGS LIMITED
By: /s/ JOHN A. BROOKS
-----------------------------------
Name: John A. Brooks
---------------------------------
Its: Director/President
----------------------------------
INFINITY INVESTORS LIMITED
By: /s/ JAMES A. LOUGHRAN
-----------------------------------
Name: James A. Loughran
---------------------------------
Its: Director
----------------------------------
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REGISTRATION RIGHTS AGREEMENT-Page 18
<PAGE> 19
SCHEDULE I
STOCKHOLDERS
<TABLE>
<CAPTION>
NAME REGISTRABLE SHARES
<S> <C>
Infinity Investors Limited 8,000,000
IEO Investments Limited 11,816,200
Infinity Emerging Subsidiary Limited 8,683,800
Stuart Chasanoff 45,000
Steve Loglisci 150,000
Trevor Huffard 50,000
Samuel L. Litwin 2,000,000
Mitchell C. Arthur 2,000,000
Michael Fiscus 2,000,000
Steve Robling 120,000
Thomas Bainbridge 120,000
William Carroll 120,000
Annette Dickson 15,000
Charles Murdock 30,000
Keith Oser 12,000
Daniel E. Stryker, Jr. 12,000
Kevin Liddy 12,000
</TABLE>
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REGISTRATION RIGHTS AGREEMENT-Page 19
<PAGE> 1
Thursday September 23, 9:24 am Eastern Time
Company Press Release
SOURCE: eVentures Group, Inc.
eVentures, a New Internet Holding Company Makes Acquisitions and Announces New
Management
DALLAS, Sept. 23 /PRNewswire/ -- eVentures Group, Inc. (OTC Bulletin Board:
EVNT - news), an Internet venture holding company focused on next-generation
Internet communications businesses, today announced the acquisition of AxisTel
Communications Inc. and stakes in e.Volve Technology Group, Inc. and i2v2.com,
Inc., as well as the appointment of five new directors, a new CEO and Chairman
of the Board. After the acquisitions, the approximate pro forma annualized
revenues for the Company based upon the revenue run rate for the month of
August is $60 million. After giving effect to these acquisitions, eVentures has
approximately 38 million shares of common stock issued and outstanding.
eVentures plans to apply for listing on the Nasdaq Stock Market during or prior
to the 1st calendar quarter of 2000.
ACQUISITIONS
eVentures has acquired 100% of AxisTel, a leading next-generation
communications company focused on the transmission of packetized voice, video,
and data over Internet Protocol (IP) and Asynchronous Transfer Mode (ATM)
networks. AxisTel not only markets its products to international wholesale
carriers, but also to retail consumers and business customers worldwide.
Recently, AxisTel has focused its energies on developing IP-based networks in
emerging markets such as Latin America, the Middle East and Asia. AxisTel will
continue to be run by Samuel L. Litwin, CEO and Mitchell C. Arthur, President,
the founders of the Company. Both are seasoned communications executives with
years of combined experience as executives of various major communications
companies, including Worldcom. eVentures also acquired a 17% stake in i2v2.com,
Inc. i2v2.com, Inc. is a Delaware corporation which develops and markets an
Internet Telephony product and web site called PhoneFree. The PhoneFree
software, which can be downloaded from the web site, allows users to conduct
"real-time" duplex voice conversations over the Internet. With almost 1 million
downloads of its software, PhoneFree is a leader in web-based Internet
Telephony, competing with Net2Phone and DeltaThree. This software functions
with normal multimedia PC hardware over existing Internet networks. Calls are
free, regardless of their duration and destination. Additional features such as
video conferencing, teleconferencing, picture and file sharing, voice mail,
caller ID, call blocking, white boarding and group text chat make this
innovative and cutting edge company a leader in the Internet Telephony
industry. PhoneFree has just begun rolling out its national radio and print
advertising campaigns, which have already resulted in a five-fold increase in
site traffic. eVentures acquired a 66% stake in e.Volve. e.Volve is an emerging
facilities-based communications company building an international IP and ATM
network capable of compressing voice, video, and data transmissions at rates of
<PAGE> 2
up to 8 times greater than more conventional methods. eVolve's technology
focuses on the convergence of the transmission of voice, video and data over
the public Internet and private Intranets. eVolve's customers include Qwest
Communications International Inc., RSL Communications, Ltd. and STAR
Telecommunications, Inc.
The combination of these Internet communications assets places eVentures in a
position as the leading Internet communications venture holding company with
significant combined revenues and an extensive international IP/ATM network.
KEY INVESTORS
Following these acquisitions, approximately 75% of the outstanding stock of
eVentures will be owned by investment funds managed by HW Capital and HW
Partners, asset management companies affiliated with the Lamar Hunt family of
Dallas, Texas. Management of AxisTel will own approximately 10% of eVentures.
MANAGEMENT AND BOARD
FRED VIERRA is the Chairman of the Board of eVentures. Mr. Vierra served as CEO
of Tele-Communications International, Inc. the international arm of
Tele-Communications, Inc. (TCI). He also served as Vice Chairman of the Board
of Directors of TCI until November 1998, when TCI was acquired by AT&T. Prior
to joining TCI, Mr. Vierra was President and Chief Operating Officer of United
Artists Entertainment Company, where he was in charge of all day-to-day
operations and ongoing strategies for the corporation. Mr. Vierra has served on
the boards of Turner Broadcasting, AboveNet Communications Inc., Discovery
Channel, and Telewest PLC. Currently, Mr. Vierra is on the boards of WLL
International, Flextech PLC, Formus Communications, Inc. and Jones
International Networks, Ltd.
BARRETT WISSMAN will serve on the Board and be CEO of eVentures. Mr. Wissman
has extensive expertise in capitalizing and operating emerging technology,
Internet and communications companies. His experience focuses specifically on
the convergence of integrated voice, video and data transmission over IP/ATM
networks. Mr. Wissman is currently a director of IBS Interactive, a leading
Internet consulting and hosting Company. Mr. Wissman is a principal of HW
Capital, an asset management company focusing on hedge fund, private equity,
and venture capital investing.
Also joining the Board of eVentures are Clark Hunt, Olaf Guerrand-Hermes and
Mark Graham.
CLARK HUNT is a Managing Director of HW Capital, an investment manager of funds
focusing on private equity, venture capital, and public market investments.
Prior to founding HW Capital, Mr. Hunt worked for Goldman, Sachs & Co. in New
York and Los Angeles.
OLAF GUERRAND-HERMES has been investing privately in Europe and in the United
States since the early 1990's. He is a Managing Partner at Blue Growth Capital,
LLC, an investment partnership. Prior to organizing Blue Growth Capital, Mr.
Guerrand-Hermes was Managing Director of International Equities at The Athena
Group, a private international investment management company. Mr.
<PAGE> 3
Guerrand-Hermes is a member of the Board of Hermes Selier.
MARK GRAHAM is a private investor based in New York City. Mr. Graham co-
founded Drake Goodwin & Graham, a private equity investment firm, in 1992 and
served as director until 1997. Prior to co-founding Drake Goodwin & Graham, Mr.
Graham was employed with Morgan Stanley and E.F. Hutton & Co.
STRATEGY
With the announcement today of eVentures' acquisition of AxisTel, Inc. and
stakes in i2v2.com and e.Volve Technology Group, Inc., eVentures has set out to
become the leading Internet venture holding company focusing on investments in
Internet communications companies and business-to-business e-commerce
communications enterprises. eVentures will potentially invest in all aspects of
Internet communications, including, but not limited to, Internet Telephony
software and hardware, IP and ATM networks, communications portals, business
and retail communications applications, Internet data storage, the Internet
backbone, hosting, and ASP (application service provider) companies. "We are
extremely excited about being a leader in the Internet communications
investment arena - our current portfolio companies are leaders in their
respective businesses with tremendous operating, technological and marketing
synergies. As CMGI and Internet Capital Group have successfully developed
Internet venture investment businesses focused on specific lines of business,
we hope to do the same for the burgeoning field of Internet communications, one
of the last frontiers of the Internet" stated Barrett Wissman, CEO of
eVentures. Fred Vierra, Chairman of the Board of the Company, notes that "he
looks forward to investing in and developing Internet-based technologies and
businesses taking advantage of the evolution of convergent communications."
SAFE HARBOR STATEMENT
This press release included "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended and Section 21E of the
Securities and Exchange Act of 1934, as amended. All statements other than
statements of historical fact, included, in this press release, including
without limitation, eVentures business strategy, plans and objectives, are
forward-looking statements. Although eVentures believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to be. Numerous factors could cause
actual results to differ materially from eVentures' expectations.
SOURCE: eVentures Group, Inc.
More Quotes and News:eVentures Group Inc (OTC BB:EVNT.OB - news)
Related News Categories: internet
<PAGE> 1
Friday October 1, 9:02 am Eastern Time
Company Press Release
eVentures Group Announces Capital Raised and Strategic Alliance
DALLAS--(BUSINESS WIRE)--Oct. 1, 1999--eVentures Group (OTCBB: EVNT - news), an
Internet venture capital holding company, today announced the completion of a
$6 million private placement of common and preferred stock. This represents
eVentures' first capital raised after its acquisition of AxisTel and
investments in e.Volve and i2v2.com. The proceeds will be used for general
corporate purposes and as capital for new investments and projects. Investors
in this first private placement include John Kluge and Stuart Subotnick, who
are general partners and sole owners of Metromedia Company; Chairman and CEO,
respectively, of Metromedia International Group (AMEX: MMG news); and board
members and significant shareholders in Metromedia Fiber (Nasdaq: MFNX - news).
Messrs. Kluge and Subotnick have extensive experience in investing and managing
telecommunications and fiber assets. eVentures believes that Messrs. Kluge and
Subotnick and the various holdings of Metromedia will be key strategic partners
in helping eVentures develop the network infrastructure supporting its Internet
communications assets. This relationship will be enhanced by Metromedia Fiber's
recent purchase of AboveNet (Nasdaq: ABOV news), which eVentures believes will
be instrumental in improving the quality of eVentures internet telephony
network and service in comparison to other players in the IP market such as
Net2Phone (Nasdaq: NTOP - news) and DeltaThree.com (Nasdaq: DDDC - news). "We
are extremely excited about Mr. Kluge and Mr. Subotnick's involvement in
eVentures as strategic partners and foresee the potential for a number of
strategic alliances between eVentures' holdings and Metromedia's diverse
communications and Internet assets," said Barrett Wissman, CEO of eVentures.
"We believe this key relationship brings eVentures one step closer to achieving
its goal of becoming the leading Internet venture holding company focusing on
communications assets, as CMGI (Nasdaq: CMGI - news) and Internet Capital Group
(Nasdaq: ICGE - news) have focused on portal and business-to-business
e-commerce strategies." eVentures Group is an Internet venture capital holding
company focused on next-generation Internet communications and
business-to-business communications enterprises. The Company invests in all
aspects of Internet communications including telephony, internet protocol
networks, communications portals, internet data storage, hosting and ASP
companies. This press release included "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. All statements
other than statements of historical fact included in this press release,
including, without limitation, eVentures' business strategy, plans and
objectives, are forward-looking statements. Although eVentures believes that
the expectations
<PAGE> 2
reflected in such forward-looking statements are reasonable,
it can give no assurance that such expectations will prove to be reasonable.
Numerous factors could cause actual results to differ materially from
eVentures' expectations.
Contact:
eVentures Group, Inc.
Barrett Wissman, CEO
214/720-1653
or
Carl Thompson Associates
Sheila Whitman, Senior Account Executive
Kevin Campbell, Account Executive
800-959-9677
More Quotes and News:eVentures Group Inc (OTC BB:EVNT.OB - news)
Related News Categories: banking, computers, internet, telecom
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