PLAN OF MERGER
This Agreement and Plan of Merger, dated September 9, 1999 by and
between Online International Corporation (hereinafter referred to as "Online"),
and Condor West Corporation (hereinafter referred to as "Condor").
Online International Corporation is duly organized and existing under
the laws of the State of Nevada, having an authorized capital stock of
100,000,000 shares, par value $.001, of which 5,507, 244 shares of common stock
are issued and outstanding, and 7,800,156 shares of Series A preferred stock are
issued and outstanding; and
Condor West is a corporation duly organized and existing under the laws
of the State of Nevada, having an authorized capital stock consisting of
35,000,000 shares of common stock, par value$.001, of which 311,238 shares are
issued and outstanding. Condor has 5,000,000 preferred shares authorized, of
which none are issued or outstanding.
Whereas, the board of directors of each of the constituent corporations
deems it advisable, for the general welfare and advantage of the corporations
and their respective shareholders, that Online merge with and into Condor; and
The board of directors of each of the constituent corporations has
approved this Agreement of Merger.
The parties agree, in accordance with the provisions of the Nevada
Revised Statutes Annotated, that Online and Condor shall be, and they hereby
are, merged into a single corporation. The terms and conditions of the merger
and the mode of carrying the merger into effect and the manner of converting the
shares of each of the constituent corporations into shares of the surviving
corporation, shall be as set forth in this Plan of Merger. The Amended Articles
of Incorporation of Condor West, upon the effective date of this agreement shall
be duly filed with the Secretary of State of Nevada.
ARTICLE I
CORPORATE EXISTENCE OF SURVIVING CORPORATION
Except as otherwise specifically set forth in this agreement, the
identity, existence, purposes, powers, franchises, rights and immunities of
Condor shall continue unaffected and unimpaired by the merger, and the corporate
identity, existence, purposes, powers, franchises, rights and immunities of
Online. Online shall cease to exist and will be merged into Condor. The separate
corporate existence of Online shall be extinguished as soon as this agreement
becomes effective, and Condor and Online shall become a single corporation
("Surviving Corporation"). Condor and Online are sometimes referred to as the
"Constituent Corporations," and the time at which the Constituent Corporations
become a single corporation is referred to as the "effective date of this
agreement."
The parties hereto agree, any stock option plan in existence for a
period greater than one month prior to the execution of the instant agreement
shall and hereby is canceled forthwith.
As soon as practicable on or following the effective date of this
Agreement, Condor and Online will cause the Articles of Merger to be delivered
to the Secretary of State of Nevada.
ARTICLE II
AMENDMENT OF ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION
The Amended Articles of Incorporation of the Surviving Corporation, as
amended, shall, upon the effective date of this agreement, be and be deemed to
be further amended to read as follows the term "Corporation" (as used in this
article referring to the "Surviving Corporation");
First: The name of the Corporation is Online International Corporation.
Second: The principal office of the Corporation is located at 150 Laser
Court, Hauppauge, New York.
Third: The Corporation is formed for the purpose of the design and
manufacture of lottery tickets and play slips for automated on-line contractors
and parimutuels (on track and off track betting) as well as lottery management,
investments in the lottery business, consultation and operation and for doing
all things of every kind incident to the business, including but not limited to:
Engage in any lawful activity and to manufacture, purchase or otherwise
acquire, invest in, own mortgage, pledge, sell, assign and transfer or otherwise
dispose of, trade, deal in and deal with goods, wares and merchandise and
personal property of every class and description;
To hold, purchase and convey real and personal estate and to mortgage
or lease any such real and personal estate with its franchises and to take the
same devise or bequest;
To acquire, and pay for in cash, stocks, bonds or any other security of
this Company, the good will, rights assets and property and to undertake or
assume the whole or any part of the obligations or liabilities for any person,
firm, association or corporation;
To acquire, hold use, sell, lease, grant license in respect of,
mortgage or otherwise dispose of letters of patents of the United States or any
foreign country, patent rights, licenses and privileges, inventions, improvement
and processes, copyright , trade marks and trade names relating to our useful in
connection with any business in this Corporation;
To borrow money and contract debts when necessary for the transaction
of its business, or for the exercise of its corporate rights, privileges or
franchises, or for any other lawful purpose of its incorporation ; to issue
bonds, promissory notes, bills of exchange, debentures and other obligations and
evidence of indebtedness, payable at specified time or times or payable upon the
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happening of a specified event or events, whether secured by mortgage, pledge or
otherwise, or unsecured for money borrowed, or in payment for property
purchased, or acquired, or for any other lawful objects;
To do all and everything necessary and proper for the accomplishment of
the objects enumerated in this plan or necessary or incidental to the protection
and benefit of the Corporation and, in general, to carry on any lawful business
necessary or incidental to the attainment of the objects of the Corporation,
whether or not such business is similar in nature to the objects herein set
forth above.
Fourth: Section 1. The maximum number of shares which the Corporation
is authorized to have outstanding is 100,000,000 shares, which shall be
classified as common stock.
Section 2. The express terms and provisions of the shares of preferred
stock are as follows
Subject to the limitations and restrictions set forth in this Article
Fourth, the board of directors is authorized and empowered at one time or from
time to time.
(1) To create one or more series of preferred stock and to authorize the
issuance of preferred stock in such series, and to fix or alter in respect of
any particular series, the following express terms and provisions of any
authorized and unissued shares of preferred stock (whether or not such shares
shall have been previously designated as shares of a particular series):
(a) The designation of the series;
(b) The number of shares of the series, which number may at any time or
from time to time be increased or decreased by the board of directors,
notwithstanding that shares of the series may be outstanding at the time of such
increase or decrease, unless the board of directors shall have otherwise
provided in creating such series;
(c) The dividend rate, not exceeding, however, 5% per annum;
(d) The dates at which dividends, if declared, shall be payable;
(e) The redemption price if any, may be fixed by the board of
directors, plus accrued dividends to the date of redemption;
(f) The liquidation price, in the case of voluntary dissolution,
liquidation or winding up, shall be, if any, fixed for redemption, plus accrued
dividends to the date of distribution, and in the case of involuntary
dissolution, liquidation or winding up shall be $5.00 per share plus accrued
dividends to the date of distribution;
(2) To make the preferred stock of any one or more series convertible
into or exchangeable for common stock of the Corporation, and in any such event,
prior to the issuance, to fix or alter the conversion price or prices or the
rate or rates of exchange and adjustments, if any, at which such conversion or
exchange may be made, including provisions for protection against dilution or
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impairment of the rights of conversion or exchange, and any other terms and
provisions in respect to conversion or exchange, not repugnant to law; and
(3) To adopt amendments to the Articles of Incorporation as may be
required or permitted by law to accomplish the foregoing purposes.
In connection with the subject merger, the parties hereto acknowledge
the following representations related to the preferred share structure and
obligations within the capital structure of Online International Corporation to
the consummation of the subject merger. The parties hereto further acknowledge,
the preferred share structure shall continue as an integral part of the
surviving company.
DIVIDENDS TO PREFERRED
Online has issued Series A Preferred Shares. The Series A Preferred
Shares carry a fixed preferential non-cumulative cash dividend rate of 5%
payable semi-annually.
RIGHTS ON DISSOLUTION
The rights of the preferred shareholders upon dissolution or winding up
is the preferential right to participate in any distribution or liquidation or
dissolution of the Company.
VOTING RIGHTS
The Series A Preferred Shareholders have the right to vote in the same
manner and on the same matters as do the holders common stock, except in
circumstance where the Company is deemed to be in default of its obligations to
the holders of the Series A Preferred Shareholders. See paragraph 6 of this
article for the additional voting rights associated with the holders of
preferred shares.
DEFAULT
The Company is deemed to be in default of its obligations to the
holders of the Series A Preferred Shares if it fails to:
(I) provide such preferred shares with
(i) all regularly prepared annual and quarterly financial statements
of the Company;
(ii) reasonable access to the books and records of the Company;
(II) obtain prior written approval of the preferred shareholders of 51% of the
then issued and outstanding Series A Preferred Shareholders for any:
(i) appointment or compensation of all executive, management and
supervisory personnel;
(ii) capital expenditures in excess of $100,000;
(iii) acquisition(s) or merger(s); and
(iv) issuance of securities or non-trade debt, declaration of dividends
or adjustment to the Company's capital structure; or
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(III) maintain at all time a positive shareholder equity and working capital.
CONVERSION
Upon written notice to the Company of the intent to exercise such
conversion rights, a holder of Series A Preferred Shares may convert all or any
portion thereof into common shares of the surviving company at the rate of one
common share for each Series A Preferred Share held. However, this limitation
does will not apply in circumstances where the Company is deemed to be in
default of its obligations to the holders of the Series A Preferred Shares, as
set forth above.
SUBDIVISION B. GENERAL PROVISIONS APPLICABLE TO ALL SERIES.
The following general provisions shall apply to the preferred stock of
the Corporation, with the exception of the above described Seris A Preferred
shares.
1. Dividends. The holders of preferred stock of each series shall be
entitled to receive dividends, payable quarterly or annually on such dates as
may be fixed for such series, when and as declared by the board of directors, at
the rate fixed for such series and no more. Dividends on each share of each
series shall commence to accrue and be cumulative from the first day of the
current dividend period within which such share was issued. A "dividend period"
in respect of any share is the period between any two consecutive dividend
payment dates, including the first of these dates, as fixed for the series to
which the share shall belong. If for any past or current dividend period or
periods, dividends shall not have been paid or declared and set apart for
payment upon all outstanding shares of any series at the rate fixed for such
series, the deficiency shall be fully paid, or dividends in the amount of such
deficiency shall be declared and set apart for payment before, any dividend
shall be declared and paid upon common stock of the Corporation or upon any
other shares ranking junior to the preferred stock; provided, however, that
dividends in full shall not be declared and set apart for payment or paid on
preferred stock of any one series for any dividend period unless dividends in
full have been or are contemporaneously declared and set apart for payment or
paid on preferred stock of all series for the dividend periods terminating on
the same or an earlier date when dividends on preferred stock of any one or more
series are not paid in full at the stated rate, the preferred stock of all
series shall share ratably in any payments of dividends in accordance with the
sums which would be payable on the preferred stock if dividends for all dividend
periods terminating on the same or an earlier date were declared and paid in
full. Accumulations of dividends shall not bear interest.
After full cumulative dividends upon the preferred stock of all series
then outstanding for all past dividend periods and for the current dividend
period shall have been paid or declared and set apart for payment, then, and not
otherwise, dividends may be declared and paid upon shares ranking junior to the
preferred stock subject, however, to the restrictions set forth in paragraph 4
of this subdivision B.
"Accrued dividends" shall mean, in respect to each share of preferred
stock of any series, an amount equal to simple interest upon the par value of
such share at an annual rate equal to the rate fixed for such series from the
date from which dividends on such share became cumulative to the date of
computation, less the aggregate amount of dividends paid.
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2. Dissolution, Liquidation and Winding Up. Upon any voluntary
dissolution, liquidation or winding up of the Corporation, the holders of
preferred stock of each series shall be entitled to receive out of the assets of
the Corporation, whether capital or surplus, the liquidation price per share
fixed for the respective series and payable upon such voluntary dissolution,
liquidation or winding up, before any distribution of the assets to be
distributed shall be made to holders of common stock of the Corporation or of
any other shares ranking junior to the preferred stock.
If the assets distributable on such dissolution, liquidation or winding
up, whether voluntary or involuntary, shall be insufficient to permit the
payment to holders of preferred stock of the full amounts, then the assets shall
be distributed ratably among the holders of preferred stock of the respective
series in accordance with the sums which would be payable in respect of such
shares upon such dissolution, liquidation or winding up if all sums payable were
discharged in full. After payment to holders of preferred stock of the full
preferential amounts, the holders of preferred stock as such shall have no right
or claim to any of the remaining assets of the Corporation, which remaining
assets shall be distributed among the holders of shares ranking junior to the
preferred stock in accordance with their respective rights thereto. The sale of
all the property and assets of the Corporation to, or the merger or
consolidation of the Corporation into or with, any other corporation shall not
be deemed to be a dissolution, liquidation or winding up for the purposes of
this paragraph.
3. Redemption. At the option of the board of directors of the
Corporation, the Corporation may redeem any series of preferred stock, or any
part of any series, at any time at the redemption price fixed for such series;
provided, however, that not less than 30 days prior to the date fixed for
redemption a notice of the time and place shall be given to the holders of
record of the preferred stock, by mailing a copy of the notice to the holders at
their respective addresses as the same appear upon the books of the Corporation,
and, if the board of directors shall so determine, by publication of notice in
such manner as may be prescribed by resolution of the board of directors. In
case of redemption of less than all of the outstanding preferred stock of any
one series such redemption shall be made pro rata, or the shares of such series
to be redeemed shall be chosen by lot, in such manner as may be prescribed by
resolution of the board of directors.
If at any time the Corporation shall have failed to pay dividends in
full on preferred stock of any one or more series, thereafter, and until
dividends in full, including accumulations, on preferred stock of every series
shall have been paid or declared and set apart for payment, the Corporation
shall not redeem preferred stock except as a whole, or directly or indirectly
purchase any preferred stock. Subject to the foregoing, any preferred stock may
be purchased by the Corporation and, if purchased for the purpose or in
anticipation of redemption, may be redeemed by action of the board of directors.
Preferred stock which shall have been acquired by the Corporation through
conversion into or exchange for common stock shall have the same status as
shares which have been redeemed. Preferred stock which shall have been redeemed
shall not be reissued.
4. Restrictions on Payment of Dividends Upon Shares Ranking Junior to
the Preferred Stock. So long as any preferred stock is outstanding the
Corporation shall not pay or declare and set apart for payment any dividend, or
make any other distribution out of earnings, surplus or capital, on its common
stock or on any shares ranking junior to the preferred stock, or purchase or
acquire any of
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its common stock or any shares ranking junior to the preferred stock, if any
such action will result in any of the following:
(a) Reducing consolidated current assets below an amount equal to twice
consolidated current liabilities;
(b) Reducing consolidated surplus below an amount equal to two years
dividend requirements on outstanding preferred stock and any outstanding shares
ranking equally with or prior thereto and any outstanding preferred stocks of
subsidiaries, owned by others than the Corporation and its subsidiaries;
(c) Reducing consolidated net tangible assets to less than 200% of the
sum of an amount equal to $3.00 per share on outstanding preferred stock and the
amount received as consideration upon the issuance of any outstanding shares
ranking equally with or prior to the preferred stock and of any outstanding
preferred stocks of subsidiaries, owned by others than the Corporation and its
subsidiaries;
(d) Reducing consolidated net tangible assets plus consolidated
long-term debt to less than 175% of the sum of the consolidated long-term debt
and an amount equal to $5.00 per share on outstanding preferred stock and the
amount received as consideration upon the issuance of any outstanding shares
ranking equally with or prior to the preferred stock and of any outstanding
preferred stocks of subsidiaries, owned by others than the Corporation and its
subsidiaries.
A determination by the board of directors that the conditions of this
paragraph 4 have been complied with shall be binding and conclusive with respect
to all shareholders of the Corporation if, in making such determination, the
board of directors rely and act in good faith upon the books of the Corporation,
or upon any balance sheet, profit and loss statement and statement of assets of
the Corporation represented to the board of directors to be correct by the
president or the officer of the Corporation having charge of or supervision of
its accounts.
5. Action by Corporation Requiring Approval of a Majority of Preferred
Stock. The Corporation shall not, without the affirmative vote at a meeting, or
the written consent with or without a meeting, of the holders of at least a
majority of the then outstanding preferred stock as a class:
(a) Change the express terms and provisions of the preferred stock in
any manner substantially prejudicial to the holders thereof;
(b) Increase the authorized number of shares of preferred stock or
create any class of shares which shall rank equally with or prior to the
preferred stock;
(c) Sell, lease, exchange or otherwise dispose of all or substantially
all of its property and assets;
(d) Merge or consolidate into another corporation, or merge or
consolidate into itself any other corporation when such merger or consolidation
would involve any of the acts referred to in (a) or
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(b) of this paragraph 5;
(e) Create, assume or guarantee any mortgage on fixed assets, or permit
any subsidiary of the Corporation to do so, unless all the indebtedness secured
thereby be acquired and held by the Corporation or its subsidiaries; provided,
however, that the Corporation or any subsidiary may create purchase money
mortgages or other purchase money liens on fixed assets hereafter acquired, or
acquire fixed assets which at the time of acquisition are subject to existing
mortgages or other liens (and assume the same) and extend the time for payment
of such purchase money or existing mortgages or other liens, or renew the same,
or replace the same with other mortgages or liens upon the same fixed assets
solely for the purpose of providing funds for the payment of the obligations
secured by the mortgages or other liens thus replaced.
6. Voting Rights. The holders of preferred stock shall be entitled at
all times to one vote for each share of preferred stock held by them
respectively; provided, however, that if the Corporation shall be in default in
the payment of dividends on the preferred stock or any series thereof in an
amount equal to four quarterly dividends, the holders of preferred stock shall
be entitled, at all elections of directors, voting concurrently with the holders
of common stock and not as a separate class, to three votes for each share of
preferred stock so held. Upon the payment, or the declaration and setting apart
for payment, at any time of dividends in full on preferred stock of every series
outstanding, the right then vested in the holders of preferred stock to three
votes at all elections of directors shall cease and determine (subject to
revesting in the event of any subsequent default of the character and extent
above specified), and the holders of preferred stock shall thereafter be
entitled at all times to one vote for each share of preferred stock held by
them, respectively.
If notice in writing shall be given by any stockholder to the president
or a vice president of the Corporation not less than 24 hours before the time
fixed for holding a meeting for the election of directors that such stockholder
intends to cumulate his or her votes at such election, and if an announcement of
the giving of such notice is made upon the convening of the meeting, each
stockholder shall have the right to cumulate his or her votes and to give one
candidate as many votes as the number of directors to be elected multiplied by
the number of votes to which he is entitled equals, or to distribute them on the
same principle among as many candidates as such holder sees fit.
7. Preemptive Rights. No holder of preferred stock of any series shall
as such holder, have any preemptive right in, or preemptive right to subscribe
to any additional preferred stock of any series, or any shares of any other
class of stock, or any bonds, debentures or other securities convertible into or
exchangeable for shares of stock of any class or series.
8. Conversion or Exchange Rights. If the board of directors makes the
preferred stock of one or more series convertible into or exchangeable for
common stock of the Corporation pursuant to the provisions of this Agreement
then and in such event the preferred stock of such series shall be convertible
into or exchangeable for common stock of the Corporation at such conversion
price or prices or rate or rates of exchange, with provisions for protection
against dilution or impairment of such rights of conversion or exchange and such
other terms in respect of conversion or exchange in a manner not repugnant to
law.
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9. Definitions. As used in subdivision "b" of the above Section 2, the
following terms shall have the meanings respectively, stated.
(a) "Subsidiary" shall mean any corporation, trust or association of
which the Corporation shall own directly or indirectly more than 50% of the
capital stock or shares having the right to vote for directors of such
corporation, trust or association or persons performing similar functions,
except for the happening of a default or other contingency; provided, however,
that the term "subsidiary" shall not include any corporate limited liability
company, trust or association the accounts of which are not consolidated with
the accounts of the Corporation if the omission to consolidate such accounts is
approved as sound accounting practice by the independent certified public
accountants employed by the Corporation to audit or verify the annual financial
statements of the Corporation and its subsidiaries.
(b) "Long-term debt" shall mean as to any corporation all indebtedness of
whatsoever nature at any time contracted, made, issued, assumed or renewed by
such corporation, which shall be payable more than twelve months from the date
of the original creation, issuance or assumption. or any renewal thereof, as the
case may be, provided; however, that this definition shall not apply to any
contracts for service's or construction or for the purchase or sale of
commodities or merchandise in the ordinary course of conducting business or to
obligations incurred under lease or royalty agreements.
(c) "Consolidated long-term debt" shall mean the total long-term debt
of the Corporation and its subsidiaries after eliminating any of such debt as is
owed to the Corporation or its subsidiaries.
(d) "Consolidated net tangible assets shall mean the excess of all
assets (except patents trademarks copyrights trade names, goodwill, unamortized
discount and expense and other like intangibles) over all liabilities (including
contingent liabilities or proper reserves therefor), including all proper
reserves not otherwise deducted, but not deducting any interest in preferred
stocks of subsidiaries owned by others than the Corporation and its
subsidiaries, all as determined in accordance with sound accounting principles
approved by the independent accountants referred to above. For the purposes of
this definition, fixed assets owned by the Corporation and its subsidiaries as
at December 31, 1998, shall be taken at the amount appearing in the consolidated
balance sheet as at such date, subsequent additions to fixed assets to be taken
at cost to the Corporation or its subsidiaries, if acquired for cash and if
acquired for a consideration other than cash, then at the fair value thereof as
determined by the board of directors of the Corporation at the time of such
acquisition, in each case after deducting therefrom all proper reserves,
including reserves for depreciation and depletion and making other proper
deductions.
e) "Consolidated current assets and consolidated current liabilities
shall mean such assets and liabilities (including contingent liabilities or
proper reserves therefor) as may be properly so classified in accordance with
generally accepted accounting principle approved by the independent accountants
for the Corporation. For the purposes of this definition there shall not be
included in consolidated current assets any assets which are pledged or
deposited as security for, or for the purpose of paying any obligation which is
not included in consolidated current liabilities, and there shall not be
included in consolidated current liabilities at liabilities for the payment of
which cash has been irrevocably deposited in trust.
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Section 3. The express terms and provisions of the shares of common stock are as
follows:
1. Dividends. Out of the assets of the Corporation available for
dividends remaining after full dividends on all shares ranking prior to the
common stock shall have been paid or declared and set apart for payment, then,
and not otherwise, and subject to any restrictions or limitations contained in
the express terms and provisions of any shares ranking prior to the common
stock, dividends may be declared and paid upon the common stock, but only when
and as determined by the board of directors.
2. Dissolution. Liquidation and Winding Up. Upon any dissolution,
liquidation, or winding up of the Corporation, or any proceedings resulting in
any distribution of all its assets to its stockholders, after there shall have
been paid to or set apart for holders of all shares ranking prior to the common
stock the full preferential amounts to which they are respectively entitled, the
holders of common stock shall be entitled to receive pro rata all of the
remaining assets of the Corporation available for distribution to its
stockholders.
3. Voting Rights. The holders of common stock shall be entitled at all times to
one vote for each share of common stock held.
If notice in writing shall be given by any stockholder to the president
or a vice president of the Corporation not less than 24 hours before the time
fixed for holding a meeting for the election of directors that such stockholder
intends to cumulate his votes at such election, and if an announcement of the
giving of such notice is made upon the convening of the meeting each stockholder
shall have the right to cumulate his votes and to give one candidate as many
votes as the number of directors to be elected multiplied by the number of votes
to which he is entitled equals, or to distribute them on the same principle
among as many candidates as such holder sees fit.
4. Preemptive Rights. No holder of common stock shall, as such holder,
have any preemptive right in or preemptive right to subscribe to, any shares of
any other class, or any bonds, debentures or other securities convertible into
or exchangeable for shares of any other class, or any preferred stock authorized
by, and which may be made convertible into or exchangeable for common stock
pursuant to, the provisions of this Article Two.
ARTICLE III
BYLAWS OF SURVIVING CORPORATION
The bylaws of Online International Corporation as they shall exist on
the effective date of this agreement, shall be and remain the bylaws of the
Surviving Corporation until they shall be respectively altered, amended or
repealed.
ARTICLE IV
DIRECTORS AND OFFICERS OF SURVIVING CORPORATION
The names and addresses of the first directors of the Surviving
Corporation, who shall hold
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office until the annual meeting of shareholders in the year set opposite their
respective names below and until the election and qualification of their
successors. In the event of a vacancy, the remaining members of the board of
directors are empowered to fill the vacancy until the pending the next annual
meting.
DIRECTORS
Name Address Term of Office
- ---- ------- --------------
Stanley James White 201 Center Street 1 year (August 5, 2000)
Pearl River, NY 10965
Leslie Nochomovitz 5 German Mill Road 1 year (August 5, 2000)
Thornhill, Ontario l3T4HH
Alex Igelman 101 Caines Avenue 1 year (August 5, 2000)
Toronto, Ontario M3N 2L6
The names and addresses of the first officers of the Surviving
Corporation, who shall hold office until the first meeting of the board of
directors following the next annual meeting of shareholders and until their
successors are elected and qualified, are as follows:
OFFICERS
Office Name Address Term of Office
- ------ ---- ------- --------------
President, Stanley James 201 Center Street 1 year (August
Secretary White Pearl River, NY 10965 5, 2000)
Chief Financial Vicki Danseglio 27 Rocket Drive 1 year (August
Officer Islip, NY 11752 5, 2000)
If on the effective date of this agreement or anytime thereafter a
vacancy shall exist on the board of directors of the Surviving Corporation or in
any of the above specified offices, by reason of the failure or inability of any
of the above named persons to accept a directorship in the Surviving Corporation
or the office to which he or she is designated, as the case may be, such vacancy
may be filled by the appointment of a successor by a majority of the remaining
members of the board of directors.
ARTICLE V
MANNER OF CONVERTING SHARES OF THE CONSTITUENT CORPORATIONS
INTO SHARES OF THE SURVIVING CORPORATION
The manner of converting the shares of common stock of Online and the
shares of common stock of Condor into shares of common stock, of the Surviving
Corporation shall be as follows:
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(a) Each share of common stock of Condor which shall be outstanding
(sum total of 311,238) on the effective date of this agreement shall be
converted into one share of common stock of the Surviving Corporation. After the
effective date of this agreement each holder of outstanding certificate or
certificates representing common stock shall be entitled, upon surrender of the
same to the Surviving Corporation, to receive in exchange certificates
representing the number of shares of common stock of the Surviving Corporation.
Until so surrendered for exchange for a certificate or certificates for common
stock of the Surviving Corporation, each outstanding certificate which prior to
the effective date of this agreement represented shares of common stock of shall
be deemed for all corporate purposes, including the payment of dividends, to
evidence the ownership of the shares of common stock of the Surviving
Corporation. Upon consummation of the merger, the 85,000 shares held by the
majority of the shareholders of Condor West shall be subject to the terms and
conditions of the lock-up agreement executed contemporaneously with the instant
agreement. The Post merger the share distribution shall be as follows: Online's
shareholders will own 201,458 shares of the Surviving Corporation; the majority
shareholders of the former Condor and their respective financial consultant will
beneficially own the sum of 85,000 shares of common stock. The former minority
shareholders of Condor will beneficially own the sum of 24,780 shares of the
common stock of the Surviving Corporation. The 5,507,244 shares of common stock
and the 7,800,156 shares of Series A preferred shares owned by the pre-merger
shareholders of Online respectively will be converted into shares of the
Surviving Corporation on a one for one share basis.
(b) The shareholders of Online represent they are not in possession of
their respective stock certificates and such certificates were, in fact, created
but not delivered. Counsel for Online will endeavor to secures said
certificates. In the absence of securing said certificates, the following steps
must be taken. Prior to the issuance of any certificates to the shareholders of
Online, each shareholder must warrant and swear he, she or it is in fact a bona
fide shareholder of Online and, as such, is entitled to the designated shares of
common stock of the Surviving Corporation. Such representation must be made with
the understanding that such representations, if false, constitute serious
violations of the federal securities laws and could result in imprisonment and
or cause the Company to become the subject of an enforcement proceeding by the
U.S. Securities and Exchange Commission.
(c) Upon satisfaction and compliance with the of the foregoing
paragraph, the surviving corporation shall without unnecessary delay issue
certificates of stock in a form the board of directors deems advisable and the
board shall provide and adopt rules and regulations as may be necessary or
proper for the issuing and transfer of the shares of the capital stock of the
consolidated corporation.
(d) Any and all shares held by the former directors of Online
International Corporation and Norla Russell (875,000), James Russell (875,000),
and Erik Fisher (750,000) shall be restricted and nontradeable for a period of
five years. Legal counsel for the Surviving Company shall hold said stock
certificates.
ARTICLE VI
MISCELLANEOUS PROVISIONS
1. This agreement shall be submitted to the respective majority
shareholders of the Constituent
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Corporations as provided by law, and upon its adoption by a majority of votes of
shareholders of Online and Condor representing the total number of shares of its
capital stock and by the vote of the holders of shares of entitling them to
exercise a majority of the voting power of such corporation, such facts shall be
duly certified by the respective presidents and secretaries, and this agreement
shall take effect and be deemed and taken to be the agreement and act of merger
of the Constituent Corporations and the merger shall be and become effective
upon the Articles of Merger being filed with the Secretary of State of Nevada.
2. At the first meeting of the board of directors of the Surviving
Corporation, which shall be held as soon as practicable thereafter the merger,
the directors or their successors shall elect or appoint the officers of the
surviving corporation.
3. Online International shall pay the expenses of carrying this
agreement of merger into effect and of accomplishing the merger.
4. On the effective date of this agreement the Surviving Corporation
shall without other transfer, succeed to all the rights, capacity, privileges
powers, franchises and immunities, as well of a public as of a private nature,
and be subject to all the restrictions, disabilities. liabilities, obligations
and duties of each of the Constituent Corporations, and all and singular the
rights, privileges, powers, franchises and immunities of each of the Constituent
Corporations and all property real, personal and mixed, and all debts,
obligations and liabilities due to either of the Constituent Corporations on
whatever account, as well for stock subscriptions as all other things in action
or belonging to each of the Constituent Corporations shall be vested in the
Surviving Corporation, and all property, rights, privileges, powers, franchises
and immunities, and all and every other interest shall be thereafter the
property of the Surviving Corporation and the title to any real estate in either
of the Constituent Corporations, shall not revert or be in any way impaired by
reason of the merger; provided that all rights of creditors and all liens upon
any property of each of the Constituent Corporations shall be preserved
unimpaired limited to the property affected by such liens at the time of the
merger, and all debts, liabilities and duties of the respective Constituent
Corporations shall then attach to the Surviving Corporation and may be enforced
against it to thesame extent as if said debts liabilities and duties had been
incurred or contracted by it.
5. If at any time the Surviving Corporation shall deem or be advised
that any further assignments or assurances in law or things are necessary or
desirable to vest or to perfect or confirm, of record or otherwise in the
Surviving Corporation the title to any property of Condor acquired or to be
acquired by reason of or as a result of the merger provided for by this
agreement, Condor and its proper officers and directors shall and will execute
and deliver any and all such proper documents as necessary in law and do all
things necessary or proper so to vest, perfect or confirm title to such property
in the Surviving Corporation and otherwise to carry out the purposes of this
agreement.
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CONDOR WEST CORPORATION
By: /s/ Carl D. Nation
-------------------------------------
Carl D. Nation
Title: Chief Executive Officer, President
Secretary
Online International Corporation
By: /s/ Stanley James White
-------------------------------------
Stanley James White
Title: Chief Executive Officer, President
Secretary
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