PLAN AND AGREEMENT OF REORGANIZATION
This Plan and Agreement of Reorganization (this "Agreement") is entered
into on this 7th day of March, 1997, by and among IMAGE TECHNOLOGY, INC., a
Nevada corporation ("ITI"), BRIDGESTONE CORP., a Delaware corporation subject
to the reporting requirements imposed pursuant to Section 15(d) of the
Securities Exchange Act of 1934, as amended ("Bridgestone"), Xxxxxx X. Xxxxxx
("Xx. Xxxxxx") and Xxxxxx Xxx Xxxxx ("Xx. Xxxxx").
PLAN OF REORGANIZATION
The transaction contemplated by this Agreement is to be a reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Bridgestone will acquire all of ITI's issued and outstanding common stock,
without par value (the "ITI Stock" or the "ITI Shares"), in exchange for
450,000,000 shares of the common stock, par value $.00001 per share, of
Bridgestone (the "Common Stock").
AGREEMENT
1. Status of ITI Shares; Transfer of ITI Shares; Lack of
Encumbrances.
(a) ITI, Xx. Xxxxxx, and Xx. Xxxxx jointly and severally
represent that, as of the date of this Agreement, Xx. Xxxxxx and Xx. Xxxxx are
the only holders of ITI Stock. Xx. Xxxxxx and Xx. Xxxxx sometimes are
referred to collectively in this Agreement as the "Original Shareholders." It
is contemplated that the Original Shareholders will transfer portions of their
respective holdings of ITI Stock to other persons or entities prior to the
Closing (as defined in Section 3). The persons or entities who will
constitute all of the holders of ITI Stock as of the Closing are referred to
in this Agreement individually as a "Shareholder" and collectively as the
"Shareholders" or the "ITI Shareholders", irrespective of whether such persons
or entities own any ITI Stock as of the date of this Agreement.
(b) The ITI Shareholders shall transfer, assign, convey and
deliver to Bridgestone at the Closing certificates representing, as of the
Closing Date (as defined in Section 3), all of the ITI Shares.
(c) The transfer of the ITI Shares shall be made free and clear
of all liens, mortgages, pledges, encumbrances, or charges, whether disclosed
or undisclosed, except as the ITI Shareholders and Bridgestone shall have
otherwise agreed in writing.
2. Issuance of Exchange Stock to ITI Shareholders.
(a) As consideration for the transfer, assignment, conveyance
and delivery of the ITI Stock, Bridgestone shall, at the Closing, issue to the
ITI Shareholders, pro rata in accordance with each Shareholder's percentage
ownership of ITI immediately prior to the Closing, certificates representing
445,000,000 shares of Common Stock (the "Bridgestone Exchange Stock") which
shall represent 89.0% of the outstanding Common Stock immediately following
the Closing.
(b) As additional consideration for the transfer, assignment,
conveyance and delivery of the ITI Stock, the persons listed on Exhibit A-1,
being the founding stockholders of Bridgestone (individually, a "Founding
Stockholder" and, collectively, the "Founding Stockholders"), shall, at the
Closing, transfer to the ITI Shareholders, pro rata in accordance with each
Shareholder's percentage ownership of ITI immediately prior to the Closing,
certificates representing in the aggregate 5,000,000 shares of Common Stock
(the "Founder's Exchange Stock") which shall represent 1.0% of the outstanding
Common Stock immediately following the Closing. The respective number of
shares of Founder's Exchange Stock to be transferred by each Founding
Stockholder is set forth opposite the name of the stockholder on Exhibit A-1.
The Bridgestone Exchange Stock and the Founder's Exchange Stock sometimes
shall be referred to collectively in this Agreement as the "Exchange Stock."
(c) The issuance of the Bridgestone Exchange Stock and the
transfer of the Founder's Exchange Stock shall be made free and clear of all
liens, mortgages, pledges, encumbrances, or charges, whether disclosed or
undisclosed, except as the ITI Shareholders and Bridgestone shall have
otherwise agreed in writing.
(d) As provided herein, and immediately prior to the Closing,
Bridgestone shall have issued and outstanding not more than 55,000,000 shares
of Common Stock, not more than 10,000,000 Class A Warrants, and not more than
10,000,000 Class B Warrants, and shall not have any shares of preferred stock
issued and outstanding.
(e) None of the Exchange Stock issued or transferred to the
Shareholders and none of the ITI Stock transferred to Bridgestone hereunder
shall, at the time of Closing, be registered under federal securities laws
but, rather, shall be issued pursuant to an exemption therefrom and be
considered "restricted stock" within the meaning of Rule 144 promulgated under
the Securities Act of 1933, as amended (the "Act"). All of such shares shall
bear a legend worded substantially as follows:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and are "restricted
securities" within the meaning of Rule 144 under the Act. The securities may
not be offered for sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act, or pursuant to an exemption
from registration under the Act, the availability of which is to be
established to the satisfaction of the Company.
The respective transfer agents of Bridgestone and ITI shall
annotate their records to reflect the restrictions on transfer embodied in the
legend set forth above. There shall be no requirement that Bridgestone
register the Exchange Stock under the Act, nor shall ITI or the Shareholders
be required to register any ITI Shares under the Act.
3. Closing. The consummation of the exchange described in Sections 1
and 2 (the "Closing") shall take place on a date (the "Closing Date") chosen
by mutual agreement of ITI and Bridgestone within thirty (30) days from the
date of this Agreement, unless a later time shall be mutually agreed upon by
the parties.
4. Deliveries at Closing.
(a) ITI and the Shareholders shall deliver to Bridgestone, at
Closing:
(1) certificates representing all shares of the ITI Stock
as described in Section 1(b), each endorsed in blank by the registered owner;
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(2) an agreement from each Shareholder, substantially in
the form of Exhibit B, agreeing to a restriction on the transfer of the
Exchange Stock as described in Section 11(c) hereof;
(3) a copy of a consent of ITI's board of directors
authorizing ITI to take the necessary steps toward consummation of the
transactions described by this Agreement; and
(4) a copy of a Certificate of Good Standing for ITI
issued not more than thirty days prior to Closing by the Nevada Secretary of
State.
(b) Bridgestone shall deliver to the ITI Shareholders, at
Closing, certificates representing the Exchange Stock, in the names of the
appropriate Shareholders, each in the appropriate denomination, as described
in Section 2.
(c) Bridgestone shall deliver to the new Bridgestone Board,
appointed pursuant to Section 11(k) below, at Closing, all of Bridgestone's
corporate records.
(d) Bridgestone shall deliver to ITI at Closing:
(1) a copy of a consent of Bridgestone's board of
directors authorizing Bridgestone to take the necessary steps toward
consummation of the transactions described by this Agreement and electing the
new directors designated by ITI effective as of the Closing; and
(2) a copy of a Certificate of Good Standing for
Bridgestone issued not more than thirty days prior to Closing by the Secretary
of State of Delaware.
5. Covenants, Representations and Warranties of ITI and the Original
Shareholders. Subject to the schedule of exceptions, attached hereto as
Exhibit C and incorporated herein by this reference, which schedule shall be
acceptable to Bridgestone, ITI and the Original Shareholders represent and
warrant to Bridgestone as follows:
(a) Organization and Standing of ITI. ITI is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada. ITI's books and records are complete and correct and have been
maintained with good business practice and accurately reflect in all material
respects the transactions to which they relate. Copies of ITI's Articles of
Incorporation, and all amendments thereof to date, certified by the proper
Nevada officials and of ITI's bylaws as amended to date, together with all
minutes of shareholder and directors' meetings, certified by ITI's Secretary,
will be delivered to Bridgestone prior to Closing and will be complete and
correct as of the date of delivery of said documents. The same shall be
subject to the review and approval of counsel for Bridgestone.
(b) Subsidiaries and Ownership of Securities. ITI has, as of
the date of this Agreement, no subsidiaries.
(c) Capitalization. The aggregate number of shares of common
stock, without par value, which ITI is authorized to issue is 25,000, all of
which are currently issued and outstanding. All of such outstanding shares
are validly issued, fully paid and nonassessable. ITI's Articles of
Incorporation do not authorize the issuance of any preferred stock. ITI has
no outstanding warrants or options to purchase common stock and no such
warrants or options will be issued prior to the Closing.
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According to ITI's books and records, ITI currently has two
shareholders. Each of the persons or entities that is to be a Shareholder at
Closing is domiciled in one of the following jurisdictions: California,
Indiana, Louisiana, New York or Ohio. All securities issued by ITI as of the
date of this Agreement have been issued in compliance with all applicable
state and federal laws.
(d) Financial Statements. ITI will deliver to Bridgestone,
prior to Closing, a copy of ITI's audited and unaudited financial statements
through January 31, 1997, which will be true and complete and will have been
prepared in accordance with generally accepted accounting principles and
Regulation S-X appearing in Title 17 of the Code of Federal Regulations
("Regulation S-X").
(e) Absence of Undisclosed Liabilities. Except to the extent
reflected in this Agreement or in ITI's unaudited balance sheet at January 31,
1997, ITI has no actual knowledge of any liabilities of any nature, whether
accrued, absolute, contingent, or otherwise, including, without limitation,
annual franchise taxes or other corporate charges in the normal course of
business.
(f) Absence of Certain Changes. Except as disclosed in Exhibit
C, since January 31, 1997, there has not been, and as of the Closing, there
will not be (I) any change in ITI's financial condition, assets, liabilities,
or business other than changes in the ordinary course of business, none of
which, taken individually or considered together with other changes, has been
materially adverse, or (ii) any damage, destruction, or loss, whether or not
covered by insurance, materially and adversely affecting ITI's properties or
business.
(g) Title to Properties. ITI has good and marketable title to
all of its properties and assets, real and personal, tangible and intangible,
none of which is subject to any security interest, mortgage, pledge, lien,
encumbrance, or charge, except for liens, if any, shown on ITI's financial
statements as of January 31, 1997, or on Exhibit D prepared in compliance with
subsection (j) below as securing specified liabilities set forth therein (with
respect to which no default exists) and, except for minor imperfections of
title and encumbrances, if any, which are not substantial in amount, do not
materially detract from the value of the properties subject thereto, or
materially impair ITI's operations and have arisen in the ordinary course of
business.
(h) Accounts Receivable. ITI represents that, except to the
extent disclosed in Exhibit C or reserved against on its balance sheet at
January 31, 1997, it is not aware of any accounts and contracts receivable
existing that in its judgment would be uncollectible.
(i) Litigation. Except as disclosed in Exhibit C, there is no
litigation or proceeding pending, or to ITI's knowledge threatened, against or
relating to ITI, its properties, or business, nor does ITI know or have
reasonable grounds to know, of any basis for any such action, or of any
governmental investigation relative to ITI, its properties, or business. ITI
is not, and on the Closing Date will not be, in default under or with respect
to any judgment, order, writ, injunction or decree of any court or of any
federal, state, municipal or other governmental authority, department,
commission, board, agency or other instrumentality; and ITI has, and on the
Closing Date will have, complied in all material respects with all laws,
rules, regulations and orders applicable to it and to its business, if any.
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(j) Exhibits Relating to Certain Matters. Exhibit D contains a
complete and accurate recitation of the following documents: a description of
all liens, mortgages, charges, and encumbrances that are outstanding with
respect to any of the properties and assets of ITI; a list of all leases
wherein ITI is either lessor or lessee; a list of all other written or oral
contracts, commitments, agreements, and other contractual obligations to which
ITI is a party; a list of all insurance policies carried by ITI; a description
of all bonus, pension, profit sharing, retirement, stock purchase, stock
option, hospitalization, insurance, and other executive or employee
compensation or benefit plans to which ITI is a party; a list of all notes
payable of ITI; and, a list of all notes and contracts receivable of ITI.
(k) Contracts. ITI is not a party to any contract, except
contracts described in Exhibits C or D. To the best of its knowledge, ITI has
in all material respects performed all obligations required to be performed by
it to date and is not in default in any material respect under any agreements,
leases, or other documents to which it is a party, except as disclosed in
Exhibit D to this Agreement.
(l) Taxes. ITI has filed in correct form, or has received
proper extensions to file, all federal and state income tax returns due with
respect to all periods through the end of its last fiscal year, and all real
and personal property tax schedules, franchise, sales or use tax returns, and
all federal and state employment and withholding tax returns that are required
to be filed, and has paid all taxes as shown on the said returns and all
assessments received by it to the extent that such taxes and assessments have
become due. The Internal Revenue Service has not examined any income tax
return of ITI.
(m) Authority to Execute Agreement. The Board of Directors of
ITI, pursuant to the power and authority legally vested in it, has duly
authorized the execution and delivery by ITI of this Agreement, and has duly
authorized each of the transactions hereby contemplated. A copy of the
Consent of Board of Directors of ITI authorizing such action is attached
hereto as Exhibit E and incorporated herein by this reference. ITI has the
power and authority to execute and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions required to be
taken by it pursuant to the provisions hereof. ITI has taken all actions
required by law, its Articles of Incorporation, as amended, its bylaws, as
amended, or otherwise to authorize the execution and delivery of this
Agreement. This Agreement is valid and binding upon ITI and the Shareholders
in accordance with its terms. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
constitute a violation or breach of the Articles of Incorporation, as amended,
or the bylaws, as amended, of ITI, or any agreement, stipulation, order, writ,
injunction, decree, law, rule or regulation applicable to ITI.
(n) Finder's Fees. Xxxxxx Xxxxxx of San Diego, California, has
been engaged by ITI as a finder in connection with the transactions covered by
this Agreement. To compensate Xx. Xxxxxx for his services as a finder, ITI
plans to issue shares of ITI Stock to him prior to the Closing. Except as set
forth in the immediately preceding sentence, ITI and the Shareholders are not,
and on the Closing Date will not be, liable or obligated to pay any finder's,
agent's or broker's fee arising out of or in connection with this Agreement or
the transactions contemplated by this Agreement.
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(o) Disclosure. No representation or warranty by ITI in this
Agreement, nor any statement or certificate hereto, or in connection with the
transactions contemplated hereby, knowingly contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading.
(p) Compliance. To the best of its knowledge, ITI has complied
in all material respects with all applicable laws, orders and regulations of
federal, state, municipal and/or other governments and/or any instrumentality
thereof, domestic or foreign, currently applicable to its assets and to the
business conducted by it.
(q) Change of Bridgestone Name. ITI agrees to use its best
efforts to amend Bridgestone's Certificate of Incorporation immediately
following the Closing to change Bridgestone's name to Image Technology, Inc.,
or to a name that is substantially similar.
(r) Reverse Stock Split. Within ten business days following the
Closing, ITI shall cause to be implemented a one-for-fifty reverse split of
the outstanding Common Stock in accordance with the requirements of Delaware
law.
(s) Bridgestone Representative or Board Member. ITI agrees that
the current Bridgestone board shall have the right, in lieu of naming a board
member pursuant to Section 11(k), to designate a non-board advisor who shall
be entitled to notice of and to attend all board meetings. In any of the
circumstances stated above or in Section 11(k), ITI agrees that the
Bridgestone representative (or board member) shall have the right to be
reimbursed for all travel expenses to attend meetings and shall receive the
same compensation that any other "outside" director of Bridgestone may
receive. Such compensation shall be independent of any compensation payable
under the consulting agreements described in Sections 11(q) and 11(r).
6. Access and Information. Subject to the protections provided by
Section 14, ITI shall give to Bridgestone and to Bridgestone's counsel,
accountants, and other representatives full access, during normal business
hours throughout the period prior to the Closing, to all of ITI's properties,
books, contracts, commitments, and records, including information concerning
products and customer base, and patents held by, or assigned to, ITI, and
furnish Bridgestone during such period with all such information concerning
ITI's affairs as Bridgestone reasonably may request.
7. Covenants, Representation and Warranties of Bridgestone.
Bridgestone represents and warrants as follows:
(a) Organization and Standing of Bridgestone. Bridgestone is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Bridgestone's books and records are complete
and correct and have been maintained with good business practice and
accurately reflect in all material respects the transactions to which they
relate. Copies of Bridgestone's Certificate of Incorporation, and all
amendments thereof to date, certified by the proper Delaware officials, and of
Bridgestone's bylaws as amended to date, together with all minutes of
shareholders' and directors' meetings, certified by Bridgestone's Secretary,
will be delivered to ITI prior to Closing and shall be complete and correct as
of the date of delivery of said documents. The same shall be subject to the
review and approval of counsel for ITI.
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(b) Subsidiaries. Bridgestone has, as of the date of this
Agreement, no subsidiaries.
(c) Capitalization. As of the date of this Agreement, the
aggregate number of shares of common stock, par value $.00001 per share, which
Bridgestone is authorized to issue is 500,000,000 of which 55,000,000 shares
are currently issued and outstanding. In addition, there are 10,000,000 Class
A Common Stock Purchase Warrants and 10,000,000 Class B Common Stock Purchase
Warrants issued and outstanding, each of which warrants is exercisable for one
share of common stock at a price of $.25 per share. Except for the Class A
Common Stock Purchase Warrants and Class B Common Stock Purchase Warrants, no
options or rights to purchase common stock or preferred stock are currently
outstanding, or will be outstanding as of the Closing. The aggregate number
of shares of preferred stock, par value $.00001 per share, which Bridgestone
is authorized to issue is 20,000,000, of which no shares are issued and
outstanding.
(d) Financial Statements. Bridgestone will deliver to ITI,
prior to Closing, copies of all of Bridgestone's audited and unaudited
financial statements through September 30, 1996, all of which are true and
complete and have been prepared in accordance with generally accepted
accounting principles and Regulation S-X.
(e) Absence of Undisclosed Liabilities. Except to the extent
reflected in this Agreement or in Bridgestone's balance sheet at September 30,
1996, Bridgestone has no actual knowledge of any liabilities, as of such date,
of any nature, whether accrued, absolute, contingent, or otherwise, including,
without limitation, annual franchise taxes or other corporate charges in the
normal course of business.
(f) Absence of Certain Changes. Bridgestone is engaged in no
business and conducts no operations. Since September 30, 1996, there has not
been any material change in Bridgestone's financial condition, assets or
liabilities, except the incurring of expenses in connection with the
acquisition of ITI or as reflected in this Agreement.
(g) Litigation. There is no litigation or proceeding pending,
or to Bridgestone's knowledge threatened, against or relating to Bridgestone,
nor does Bridgestone know or have reasonable grounds to know, of any basis for
any such action, or of any governmental investigation relative to Bridgestone.
Bridgestone is not, and on the Closing Date will not be, in default under or
with respect to any judgment, order, writ, injunction or decree of any court
or of any federal, state, municipal or other governmental authority,
department, commission, board, agency or other instrumentality; and
Bridgestone has, and on the Closing Date will have, complied in all material
respects with all laws, rules, regulations and orders applicable to it, if
any.
(h) Contracts. Bridgestone is not a party to any contract, nor
is Bridgestone a party to any written or oral commitment, for capital
expenditures. Bridgestone has in all material respects performed all obliga-
tions required to be performed by it to date and is not in default in any
material respect under any agreements or other documents to which it was a
party.
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(i) SEC Filings. As of the date of this Agreement, Bridgestone
has filed with the Securities and Exchange Commission ("SEC") all registration
statements, financial statements, applications, reports, schedules, forms,
proxy statements and all other instruments, documents and written information
(collectively, the "SEC Filings") required to be filed by Bridgestone under
the Act and the Securities Exchange Act of 1934, as amended. At the date
hereof, none of the SEC Filings contains or, on the Closing Date, will contain
any untrue statement of a material fact or omits or, on the Closing Date, will
omit to state a material fact necessary in order to make the statements
contained therein, in light of the circumstances in which they were made or
shall have been made, not misleading.
(j) Authority to Execute Agreement. The Board of Directors of
Bridgestone, pursuant to the power and authority legally vested in it, has
duly authorized the execution and delivery by Bridgestone of this Agreement
and the Bridgestone Exchange Stock, and has duly authorized each of the
transactions hereby contemplated. A copy of the Consent of Board of Directors
of Bridgestone authorizing such action is attached hereto as Exhibit F and
incorporated herein by this reference. Bridgestone has the power and
authority to execute and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions required to be
taken by it pursuant to the provisions hereof. Bridgestone has taken all the
actions required by law, its Certificate of Incorporation, as amended, its
bylaws, as amended, or otherwise to authorize the execution and delivery of
the Bridgestone Exchange Stock pursuant to the provisions hereof. This
Agreement is valid and binding upon Bridgestone in accordance with its terms.
Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will constitute a violation or breach of
the Certificate of Incorporation, as amended, or the bylaws, as amended, of
Bridgestone, or any agreement, stipulation, order, writ, injunction, decree,
law, rule or regulation applicable to Bridgestone. Upon issuance, the
Bridgestone Exchange Stock shall be validly issued, fully paid and non-
assessable.
(k) Finder's Fees. Xxxx Xxxxxxxx of Las Vegas, Nevada, has
acted as a finder on behalf of Bridgestone in connection with the transactions
covered by this Agreement. To compensate Xx. Xxxxxxxx, the Founding
Stockholders intend to transfer a portion of their Common Stock, not exceeding
1,000,000 shares in the aggregate, to him subsequent to the Closing. Except
as set forth in the immediately preceding sentence, Bridgestone is not, and on
the Closing Date will not be, liable or obligated to pay any finder's, agent's
or broker's fee arising out of or in connection with this Agreement or the
transactions contemplated by this Agreement.
(l) Disclosure. No representation or warranty by Bridgestone in
this Agreement, nor any statement or certificate furnished or to be furnished
to ITI or the Shareholders pursuant hereto, or in connection with the
transactions contemplated hereby, knowingly contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements contained therein not misleading.
(m) Taxes. Bridgestone has filed all federal income tax returns
due with respect to all periods through the end of its last fiscal year, and
has paid all taxes as shown on the said returns and all assessments received
by it to the extent that such taxes and assessments have become due. The
Internal Revenue Service has not examined any income tax return of
Bridgestone.
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(n) Registration Rights. Except to the extent set forth on page
iii of Bridgestone's Prospectus, dated April 17, 1990, which pertains to
Bridgestone's obligations in favor of its warrantholders, Bridgestone has not
granted any registration rights to holders of warrants or to holders of
restricted Common Stock.
8. Access and Information. Subject to the protections provided by
Section 14, Bridgestone shall give to ITI, the ITI Shareholders and their
counsel, accountants, and other representatives full access, during normal
business hours throughout the period prior to the Closing, to all of
Bridgestone's properties, books, contracts, commitments, and records, if any,
and shall furnish ITI and the ITI Shareholders during such period with all
such information concerning Bridgestone's affairs as ITI and the ITI
Shareholders reasonably may request.
9. Conduct of ITI Business Pending Closing. ITI and each of the
Shareholders, to the extent within each Shareholder's control, covenant that
pending the Closing:
(a) Except as described in, or as may be necessary to effect the
transactions contemplated by, the next sentence, no change will be made in
ITI's Articles of Incorporation or bylaws and no change will be made in ITI's
issued shares of stock, other than such changes as may be first approved in
writing by Bridgestone. Bridgestone and the Original Shareholders acknowledge
that the Original Shareholders intend to transfer outstanding ITI shares,
prior to the Closing, to one or more of the persons or entities listed on
Exhibit A-2.
(b) No contract or commitment will be entered into by or on
behalf of ITI, or indebtedness otherwise incurred, except as contemplated by
this Agreement or as may be pre-approved in writing by Bridgestone.
(c) No dividends shall be declared, no stock options shall be
granted, no other- than-normal increases in compensation to employees,
including officers, shall be declared and no new employment agreements, shall
be entered into with officers or directors of ITI, except as contemplated by
this Agreement or as may be first approved in writing by Bridgestone.
(d) Except as otherwise requested by Bridgestone, ITI will use
its best efforts (without making any commitment on Bridgestone's behalf) to
preserve ITI's business organization intact; to keep available to ITI the
services of its present officers and employees; and to preserve the goodwill
of those having business relations with ITI.
10. Conduct of Bridgestone Pending Closing. Bridgestone covenants
that, pending the Closing:
(a) No change will be made in Bridgestone's Certificate of
Incorporation or bylaws or in Bridgestone's authorized or issued shares of
stock, except as may be first approved in writing by ITI.
(b) No dividends shall be declared, no stock options granted and
no employment agreements shall be entered into with officers or directors of
Bridgestone, except as contemplated by this Agreement or as may be first
approved in writing by ITI.
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11. Conditions Precedent to Closing. All obligations of Bridgestone,
ITI and the ITI Shareholders under this Agreement are subject to the
fulfillment, prior to or at the Closing, of all conditions elsewhere herein
set forth, including, but not limited to, receipt by the appropriate party of
all deliveries required by Section 4 herein, and fulfillment, prior to the
Closing, of each of the following conditions:
(a) The respective representations, warranties and covenants of
ITI, of the Shareholders, and of Bridgestone contained in this Agreement shall
be true at the time of Closing as though such representations, warranties and
covenants were made at such time.
(b) ITI, the ITI Shareholders and Bridgestone shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by each prior to or at the Closing.
(c) Each ITI Shareholder acquiring Exchange Stock will be
required, at Closing, to submit an agreement, substantially in the form of
Exhibit B, confirming that all the Exchange Stock received will be acquired
for investment and not with a view to, or for sale in connection with, any
distribution thereof, and agreeing not to transfer any of the Exchange Stock
for a period of two years from the Closing Date, except to those persons
approved by legal counsel to Bridgestone as falling within an exemption from
registration under the Act and any applicable state securities laws, which
transfers do not constitute a public distribution of securities, and in which
the transferees execute an investment letter in form and substance
satisfactory to counsel for Bridgestone. The foregoing provision shall not
prohibit the registration of those shares at any time following the Closing.
Each ITI Shareholder acquiring Exchange Stock will be required to transfer to
Bridgestone at the Closing his or her respective ITI Shares, free and clear of
all liens, mortgages, pledges, encumbrances or changes, whether disclosed or
undisclosed.
(d) Bridgestone shall have been presented with, and shall have
approved, an updated version of Exhibits C and D, prepared by ITI, current as
of the Closing.
(e) Each party shall have received favorable opinions from the
other party's counsel on such matters in connection with the transactions
contemplated by this Agreement as are reasonable, including an opinion from
counsel for ITI that the Exchange, if consummated, will not in any manner
violate corporate or securities laws of the States of California, Indiana,
Louisiana, Nevada, New York, Ohio and any other states where any ITI
Shareholder resides.
(f) Each party shall have satisfied itself that since the date
of this Agreement the business of the other party has been conducted in the
ordinary course except to the extent otherwise contemplated by this Agreement.
In addition, each party shall have satisfied itself that no withdrawals of
cash or other assets have been made and no indebtedness has been incurred
since the date of this Agreement, except with respect to services rendered or
expenses incurred in connection with the consummation of the transactions
contemplated by this Agreement, unless said withdrawals or indebtedness were
either contemplated by the terms of this Agreement or subsequently consented
to in writing by the parties.
-10-
(g) Each party covenants that, to the best of its knowledge, it
has complied in all material respects with all applicable laws, orders and
regulations of federal, state, municipal and/or other governments and/or any
instrumentality thereof, domestic or foreign, applicable to their assets, to
the business conducted by them and to the transactions contemplated by this
Agreement.
(h) Bridgestone shall have provided to ITI through September 30,
1996, all audited and unaudited financial statements prepared in accordance
with generally accepted accounting principles and with Regulation S-X, and the
audited statements certified as such by independent accountants of
Bridgestone.
(i) ITI shall have provided to Bridgestone audited financial
statements of ITI for the three most recently completed fiscal years (or for
such shorter period as ITI or its subsidiaries, if any, shall have been in
existence), prepared in accordance with generally accepted accounting
principles and Regulation S-X, together with consolidated unaudited financial
statements in the same form for the period from the end of the most recently
ended fiscal year to a date within thirty days of the Closing. Such unaudited
financial statements of ITI shall have included the following schedules:
Schedule of Assets; Schedule of Notes Payable; Schedule of Accounts Payable;
and Schedule of Notes Receivable or, in their absence, an affirmation that
such items do not exist. ITI shall also provide, as of a date within ten days
of Closing, an update of any material change in the aforementioned schedules.
In addition, ITI will deliver to Bridgestone, prior to Closing, in a form
satisfactory to Bridgestone, a letter from ITI's independent auditors, who
shall be a firm satisfactory to Bridgestone, confirming that ITI's financial
statements, covering the period from inception to the Closing Date, are
auditable and can be prepared in accordance with generally accepted accounting
principles and Regulation S-X within seventy-five (75) days of the Closing
Date.
(j) Each party shall have granted to the other party (acting
through its management personnel, counsel, accountants or other
representatives designated by it) full opportunity to examine its books and
records, properties, plants and equipment, proprietary rights and other
instruments, rights and papers of all kinds in accordance with Sections 6 and
8 hereof (and Bridgestone shall have full access to the books and records, to
the extent within the control of any affiliate of ITI, of American
Registration Systems, Inc., of Advanced Identification Management Systems,
Inc., and of any other entity with which ITI has any affiliation), and each
party shall be satisfied to proceed with the transactions contemplated by this
Agreement upon completion of such examination and investigation.
(k) Effective as of the Closing Date, all (or, at Bridgestone's
option, all but one) of the members of Bridgestone's current board of
directors and each and every person serving as an officer of Bridgestone shall
resign their respective positions and/or offices by tendering written
resignations. Immediately prior to said resignations, Bridgestone's board of
directors shall appoint as members of Bridgestone's new board those persons
designated by ITI to fill said director positions, with such appointments to
be effective as of the Closing. If all members of Bridgestone's current board
of directors (the "Current Board") resign as of the Closing, the parties
hereto agree that the Current Board may designate, at any time within twelve
months following the Closing, one person to serve as a member of the Board.
-11-
(l) All press releases, shareholder communications, SEC Filings
and other publicity generated by Bridgestone or ITI regarding the transactions
contemplated by this Agreement shall have been reviewed and approved by the
other party before their release to the public or any governmental agency.
(m) Each party shall have satisfied itself that all transactions
contemplated by this Agreement, including those contemplated by the exhibits
attached hereto, shall be legal and binding under applicable statutory and
case law of the States of Delaware and Nevada, respectively, including, but
not limited to Nevada's securities laws and all other applicable state
securities laws.
(n) The transactions contemplated by this Agreement shall be
approved by the shareholders of ITI, if deemed necessary or appropriate by
counsel for the same, within twenty-five (25) days following execution of this
Agreement. If such a meeting is deemed necessary, the management of ITI
agrees to recommend approval to their Shareholders and to solicit proxies in
support of the same.
(o) Either Bridgestone or ITI shall have entered into an
employment contract with Xxxx X. Xxxx, together with any other personnel who
might be essential to the operations of ITI, such contracts to be satisfactory
to the parties, and, if the contract be with ITI, that Bridgestone shall have
ratified, adopted and confirmed the contract.
(p) Each of the Founding Stockholders shall have tendered his or
her stock certificate or certificates to Bridgestone, endorsed in blank, to
permit the transfer of the Founder's Exchange Stock at Closing as contemplated
by Section 2(b).
(q) Either Bridgestone or ITI shall have entered into a
consulting agreement with Xxxxxx Xxxxx, such agreement to be satisfactory to
the parties, and, if the agreement be with ITI, that Bridgestone shall have
ratified, adopted and confirmed the agreement.
(r) Either Bridgestone or ITI shall have entered into a
consulting agreement with Xxxxxx X. Xxxxxx, such agreement to be satisfactory
to the parties, and, if the agreement be with ITI, that Bridgestone shall have
ratified, adopted and confirmed the agreement.
(s) Bridgestone shall be satisfied that it is highly likely that
ITI shall obtain an equity capital infusion of at least $2,800,000 within 15
business days following the Closing, and such other infusions as shall be
sufficient to meet ITI's working-capital needs in the 180-day period
immediately following the Closing.
(t) ITI shall have granted to the Founding Stockholders a right
to participate in any equity-capital financing, other than an offering
pursuant to a registration statement declared effective by the U.S. Securities
and Exchange Commission, that ITI might undertake prior to the first
anniversary of closing.
12. Additional Covenants of the Parties.
-12-
(a) Prior to the closing, neither Bridgestone, ITI, nor any of
the Shareholders may discuss or negotiate with any other corporation, firm or
person, or entertain or consider any inquiries or proposals relating to the
possible disposition of their shares of capital stock of their companies, or
their assets, and each of them will cause their respective companies to
conduct business only in the ordinary course. Notwithstanding the foregoing,
each party shall be free to engage in activities mentioned in the preceding
sentence which are designed to further the mutual interests of the parties for
the contemplated consolidation of the companies.
(b) Should ITI terminate this Agreement for any reason other than
(I) the failure of Bridgestone to perform a material condition set forth
hereunder, or (ii) the failure of ITI to be satisfied to proceed at the
Closing because of a material deficiency which is identified upon ITI's
examination and investigation contemplated by subsection 11(j) herein, and
enters into any agreement within six (6) months of said termination with any
entity for the purpose of accomplishing a public offering of stock or status
as a public-traded concern, or receives equity or debt funding through sources
introduced by Bridgestone, it is hereby agreed that Bridgestone shall receive
an amount which, immediately following issuance, shall be equal to ten percent
(10%) of the common stock outstanding in ITI (or any successor public entity)
upon the accomplishment of said offering or public status.
(c) Bridgestone and ITI shall indemnify each other party against
any liability to any broker or finder to which that party may become
obligated. In particular, ITI and the ITI Shareholders acknowledge that Xxxx
Xxxxxxxx has acted on behalf of Bridgestone as finder in connection with this
transaction, and Bridgestone shall indemnify ITI and the Shareholders against
any claims that may arise in connection therewith. Bridgestone acknowledges
that Xxxxxx Xxxxxx has been engaged by ITI as a finder in connection with this
transaction, and ITI and the ITI Shareholders shall indemnify Bridgestone
against any claims that may arise in connection therewith.
13. Termination. This Agreement may be terminated prior to Closing,
and the contemplated transactions abandoned, without liability to either
party, except with respect to the obligations of Bridgestone, ITI and the ITI
Shareholders under Section 14 hereof:
(a) by mutual consent of the parties;
(b) by Bridgestone, if in its reasonable belief there has been a
material misrepresentation or breach of warranty on the part of ITI or any
Shareholder in the representations and warranties set forth in the Agreement;
(c) by ITI or a majority in interest of Shareholders if, in the
reasonable belief of ITI or such Shareholders, there has been a material
misrepresentation or breach of warranty on the part of Bridgestone in the
representations and warranties set forth in the Agreement;
(d) by either Bridgestone or by a majority in interest of the
Shareholders if the Closing shall not have occurred by the Closing Date;
(e) by Bridgestone if, in its opinion or that of its counsel,
the transactions contemplated by this Agreement do not qualify for exemption
from registration under applicable federal and state securities laws, or
qualification, if obtainable, cannot be accomplished, in Bridgestone's opinion
or that of its counsel, without unreasonable expense or effort;
-13-
(f) by Bridgestone if, in its opinion or that of its counsel,
the transactions contemplated by this Agreement cannot be consummated under
Nevada or other relevant state corporate law or, if consummation is possible,
that it cannot be accomplished, in Bridgestone's opinion or that of its
counsel, without unreasonable expense or effort;
(g) by Bridgestone or by a majority in interest of the
Shareholders if Bridgestone in its sole discretion or such Shareholders in
their discretion shall determine that any of the transactions contemplated by
this Agreement have become inadvisable or impracticable by reason of the
institution or threat by state, local, or federal governmental authorities or
by any other person of material litigation or proceedings against any party;
(h) by Bridgestone if the business or assets or financial
condition of ITI, taken as a whole, have been materially and adversely
affected, whether by the institution of litigation or by reason of changes or
developments or in operations in the ordinary course of business or otherwise;
or, by a majority in interest of the Shareholders if the business or assets or
financial condition of Bridgestone, taken as a whole, have been materially and
adversely affected, whether by the institution of litigation or by reason of
changes or developments or in operations in the ordinary course of business or
otherwise;
(I) by Bridgestone if it shall appear to Bridgestone that ITI
shall not be able to obtain within a reasonable amount of time after Closing
all consents and approvals of all governmental authorities having any
jurisdiction over the business of ITI, or if such authorities shall withdraw
any approvals, licenses, or permits given to ITI or to any other entity with
which ITI is affiliated or in which ITI has an interest;
(j) by Bridgestone if any Shareholder dissents from the exchange
described in Sections 1 and 2, or is unable or for any reason refuses to
transfer any or all of his or her ITI Shares to Bridgestone in accordance with
Section 1, or fails to tender at the Closing the certificate or certificates,
endorsed in blank, representing all of his or her ITI Stock;
(k) by Bridgestone or ITI if any Founding Stockholder dissents
from the exchange described in Sections 1 and 2, or is unable or for any
reason refuses to transfer any of his or her proportionate share of the
Founder's Exchange Stock to the ITI Shareholders in accordance with Section 2,
or fails to tender at the Closing a certificate or certificates, endorsed in
blank, that represent at least his or her proportionate share of the Founder's
Exchange Stock;
(l) by ITI if Bridgestone fails to perform material conditions
set forth in Section 11;
(m) by ITI if examination of Bridgestone's books and records
pursuant to Section 8 uncovers a material deficiency;
(n) by Bridgestone if ITI fails to perform material conditions
set forth in Section 11;
(o) by Bridgestone if, in its sole discretion, it should appear
that the conditions stated in Section 11(s) will not be satisfied.
-14-
14. Confidentiality. While each party is obligated to provide access
to and furnish information in accordance with Sections 6 and 8 herein, it is
understood and agreed that such disclosures and information subsequently
obtained as a result of such disclosures are proprietary and confidential in
nature. Each party agrees to hold such information in confidence and not to
reveal any such information to any person who is not a party to this
Agreement, or an officer, director, key employee, or shareholder thereof, and
not to use the information obtained for any purpose other than assisting in
its due diligence inquiry precedent to the Closing. Upon request of any
party, a confidentiality agreement, acceptable to the disclosing party, will
be executed by any person selected to receive such proprietary information,
prior to receipt of such information.
15. Nature and Survival of Representations. All statements contained
in any certificate or other instrument delivered by or on behalf of ITI, the
ITI Shareholders or Bridgestone, pursuant hereto, or in connection with the
transactions contemplated hereby, shall be deemed representations and
warranties by ITI, the ITI Shareholders or Bridgestone, respectively, and
shall survive the closing for a period of twenty-four (24) months.
16. Binding Agreement.
(a) This Agreement shall become binding upon the parties when,
but only when, it shall have been signed by or on behalf of all parties.
(b) Subject to the condition stated in subsection (a), above,
this Agreement shall be binding upon, and inure to the benefit of, the
respective parties and their legal representatives, successors and assigns.
This Agreement, in all of its particulars, shall be enforceable by legal
action for the recovery of damages or by way of specific performance and the
terms and conditions of this Agreement shall remain in full force and effect
subsequent to Closing and shall not be deemed to be merged into any documents
conveyed and delivered at the time of Closing. In the event that any person
is required to initiate any action at law or in equity for the enforcement of
this Agreement, the prevailing party in such litigation shall be entitled to
recover, from the party determined to be in default, all of its reasonable
costs incurred in said litigation, including attorneys' fees.
17. Construction. This Agreement is intended to be performed in the
State of Colorado, and shall be construed and enforced in accordance with the
laws of that State.
18. Notices. All notices, requests, demands, and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered or mailed, first class postage, prepaid, to ITI, at 00000 Xxxxxxx
Xxxxxx, Xxxxx X, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx M. Rousseff,
or if to Bridgestone, at 000 Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxx 00000-0000, Attention: Xxxxxx Xxxxx, President; or if to the
Original Shareholders, to the respective addresses indicated beneath each
Original Shareholder's name on the signature page of this Agreement.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
-15-
20. Arbitration. Any dispute arising pursuant to or in any way
related to this Agreement or the transactions contemplated hereby shall be
settled by arbitration in the City and County of Denver, State of Colorado,
provided, however, that nothing in this Section shall restrict the right of
either party to apply to a court of competent jurisdiction for emergency
relief pending final determination of a claim by arbitration in accordance
with this Section. All arbitration shall be conducted in accordance with the
rules and regulations of the American Arbitration Association by a panel of
three arbitrators, one selected by each party and the third selected by the
other two arbitrators. Each party shall pay their own expenses associated
with such arbitration, including the expenses of any arbitrator selected by
such party and 50% of the expenses of the third arbitrator. The decision of
the arbitrator shall be binding upon the parties and judgment in accordance
with that decision may be entered in any court having jurisdiction thereof.
21. Enforceability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction. To the
extent permitted by applicable law, the parties hereto hereby waive any
provision of law which renders any provision hereof prohibited or
unenforceable in any respect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
IMAGE TECHNOLOGY, INC. BRIDGESTONE CORP.
By:/s/ Xxxxxx M. Rousseff By:/s/ Xxxxxx Xxxxx
Xxxxxx M. Rousseff, Chairman Xxxxxx Xxxxx, President
and Chief Executive Officer
SHAREHOLDERS OF IMAGE TECHNOLOGY, INC.
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
/s/ Xxxxxx Xxx Xxxxx
Xxxxxx Xxx Xxxxx
000 Xxxxxx Xxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000
-16-
EXHIBIT LIST
Exhibit A-1 -- Names and Respective Share Holdings in Bridgestone of
the Founding Stockholders.
Exhibit A-2 -- Names and Anticipated Respective Shareholdings in ITI
of the Individuals and Entities that are to be ITI
Shareholders immediately prior to Closing.
Exhibit B -- Form of Investment Letter of ITI Shareholders.
Exhibit C -- Schedule of Exceptions to Covenants, Representations
and Warranties of Image Technology, Inc.
Exhibit D -- Description of Liens, Mortgages, Charges and
Encumbrances of Image Technology, Inc.
Exhibit E -- Consent of Board of Directors of Image Technology,
Inc.
Exhibit F -- Consent of Sole Director of Bridgestone Corp.
EXHIBIT A-1
Name of Founding Number of Shares Number of Shares Number of Shares to
Stockholder (or of Unregistered to be Transferred be Retained by
Successor) Common Currently to ITI Stock- Founding Stockhold-
Owned by Founding holders er (or Successor)
Stockholder (or after Closing, but
Successor) prior to Reverse
Split
Xxxxxxx Xxxxxxxx 3,375,000 375,000 3,000,000
Xxxxxxx Xxxxxxxx 500,000 55,556 444,444
Xxxxxxx X. Xxxxxxxx 1,125,000 125,000 1,000,000
Xxxxx Xxxxx Xxxxxx 2,500,000 277,778 2,222,222
Xxxxxxx X. XxXxxxxx 4,500,000 500,000 4,000,000
Xxxxxx X. Xxxxxx 11,250,000 1,250,000 10,000,000
Xxxxxx Xxxxx 12,000,000 1,333,333 10,666,667
Xxxx X. Xxxxxxxxx 9,750,000 1,083,333 8,666,667
TOTALS: 45,000,000 5,000,000 40,000,000
EXHIBIT A-2
NAMES AND ANTICIPATED RESPECTIVE SHAREHOLDINGS IN ITI
OF THE INDIVIDUALS AND ENTITIES THAT ARE TO BE
ITI SHAREHOLDERS IMMEDIATELY PRIOR TO CLOSING
NAME/ADDRESS ITI SHARES
L & R Realty 597
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxx 2,139
000 Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxxx 8,333
0000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Litchin Family Partnership 1,944
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
Xxxxxx Beverage Co. 1,000
0000 Xxxxxxxx Xxxxx
Xxxx Xxxxx, XX 00000
The J & S Trust 9,722
c/o Xxxxxx X. Xxxxx, Trustee
000 Xxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Xxxxxxx X. Xxxxxxxxx 56
000 Xxxx Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Xxxxxx X. Xxxxx, Xx. 28
0000 Xxxxxx Xxxxxx
X.X. Xxx 00000
Xxxx Xxxxx, XX 00000
Xxx Xxxxxx 167
00000 Xxxxxxx Xxxxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Xxxxxxxxxxx X. Xxxx 69
000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 42
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Xxxx X. Xxxx 500
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxxx 56
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx XxXxxx 139
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx by the Xxx, XX 00000
The JC Trust 208
c/o Xxxxxx XxXxxx, Trustee
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx by the Xxx, XX 00000
-2-
EXHIBIT B
FORM OF INVESTMENT LETTER OF ITI SHAREHOLDERS
BRIDGESTONE CORP.
000 Xxxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[Date]
Dear Subscriber:
In connection with your acquisition of shares (the "Shares") of common
stock, par value $.00001 per share, of Bridgestone Corp., a Delaware
corporation (the "Company"), to be acquired pursuant to an exchange of shares
(the "Exchange") memorialized in a Plan and Agreement of Reorganization (the
"Agreement") among the Company, selected shareholders of the Company, Image
Technology, Inc., a Nevada corporation ("ITI"), and each of the shareholders
of ITI, we wish to advise you as follows:
The Shares have not been registered under the Securities Act of 1933, as
amended (the "Act"), or the securities or blue sky laws of any state.
Moreover, the Company has no current plan to undertake any such registration
in the future. In selling the Shares without registration, the Company is
relying upon exemptions from registration provided by either or both of (a)
Section 4(2) of the Act and (b) Rules 504, 505, or 506 of Regulation D under
the Act, and upon corresponding exemptions under state securities laws. The
Company claims these exemptions on the basis, among others, that this sale is
a transaction not involving any public offering. You have been advised and
understand that the Company's reliance upon such exemptions from registration
is predicated in part upon your representation to the Company that you are
acquiring the Shares for your own account, with no present intent to resell or
distribute any or all of the Shares, in addition to the representations made
by you below. The Shares are "restricted securities" within the meaning of
Rule 144 of the General Rules and Regulations under the Act. You have
acknowledged and you understand that the Shares are unregistered and must be
held indefinitely, unless (i) they are subsequently registered under the Act
and under any applicable registration provisions of state securities laws or
(ii) an exemption from registration is available.
You have agreed that any and all certificates which may be issued
representing the Shares shall contain a legend substantially in the form set
forth below, which you have read and understand:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE "RESTRICTED
SECURITIES" WITHIN THE MEANING OF RULE 144 UNDER THE ACT. THE SHARES MAY NOT
BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE
ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
You have further agreed not to transfer any of the shares acquired pursuant to
the Agreement for a period of two years from the date of the closing of such
Agreement, except
a. to those persons approved by the Company's legal counsel as
falling within an exemption from registration under Section 4(1) of the Act
and any applicable state securities laws, which transfers do not constitute a
public distribution of securities, and in which the transferees execute an
investment letter in form and substance satisfactory to Company counsel; or
b. pursuant to (i) an effective registration under the Act and (ii)
an effective registration, or an available exemption from registration, under
the securities laws of each applicable state.
You further acknowledge your understanding that, if the Shares have been
held for a period of at least two years and if Rule 144 adopted under the Act
is applicable (there being no representations by the Company that Rule 144
will be applicable), then you may make only routine sales of the Shares in
limited amounts in a specified manner in accordance with the terms and
conditions of Rule 144. In case Rule 144 is not applicable, any sales made by
you can be made only pursuant to an effective registration statement or an
available exemption from registration.
You further acknowledge that you are aware that only the Company can
file a registration statement or a Form 1-A NotiEcation under Regulation A,
and that the Company has no obligation to do so or to take steps necessary to
make Rule 144 available to you. You also have been advised and acknowledge
your understanding that, in the event Rule 144 is not available, the
circumstances under which you can sell the securities, absent registration or
compliance with Regulation A, are extremely limited.
You further acknowledge and represent to the Company that you are a
knowledgeable, sophisticated investor who can fend for yourself and have
adequate means to make the investment contemplated herein; that, in connection
with this investment, you have obtained any necessary investment advice from
outside sources, including your broker, banker, investment adviser, and
private attorney or accountant; and that you had available to you all
information with respect to the Company which was deemed necessary by yourself
and your respective advisers.
You further acknowledge that, to the best of your knowledge, there are
only a limited number of purchasers involved in this particular placement of
securities. Further, you have communicated with officers and directors of the
Company, at which time one or more of yourself, your attorney, or your
investment adviser had an opportunity to ask all questions that any of you
deemed necessary or appropriate, all of which questions have been answered
fully. Further, to the best of your knowledge, each of the other purchasers
conducted similar communications with such officers and directors. You further
acknowledge that you are able to bear the economic risk of your investment in
the Shares and to maintain such investment for an indefinite period of time,
and, further, that you could bear a total loss of this investment and not
change your standard of living as it exists at the time of this investment.
You hereby covenant and agree to protect, indemnify, and hold the
Company, and each of its officers, directors, and shareholders, harmless from
and against any and all claims, demands, causes of action, judgments, orders,
decrees, damages, liabilities, court or other costs, attorney fees, reasonable
costs of investigation, and other costs and expenses whatsoever (i) arising
out of or attributable to any breach or violation of, or the falsity,
inaccuracy, or failure of, any representation, warranty, or covenant made by
you in this letter, and (ii) arising from or related to the acquisition,
ownership, or disposition by you of any or all the Shares.
-2-
You represent that you are a resident of the State of California and
that, as of the date of this letter, you are the beneficial owner of
securities of the Company.
You have made all the above acknowledgments, representations, and
covenants to induce the Company to issue the Shares to you pursuant to the
contemplated Exchange and understand that the Company is relying thereon and
would not issue any securities to you absent such acknowledgments,
representations, and covenants.
IF THE FOREGOING CORRECTLY EXPRESSES YOUR INTENT, UNDERSTANDING, AND
ACKNOWLEDGEMENTS, PLEASE SIGN THE FORM OF CONFIRMATION APPEARING AT THE BOTTOM
OF THIS PAGE ON EACH OF THE TWO COPIES OF THIS LETTER THAT HAVE BEEN PRESENTED
TO YOU AND RETURN ONE OF THE SIGNED COPIES TO THE UNDERSIGNED. YOU SHOULD
RETAIN THE OTHER SIGNED COPY FOR YOUR FILES.
Dated: ___________________, 1997.
Very truly yours,
BRIDGESTONE CORP.
By: _______________________________
Xxxxxx Xxxxx, President
-3-
TO THE PRESIDENT OF
BRIDGESTONE CORP.
I CONFIRM THAT I HAVE READ THE FOREGOING AND AGREE TO THE TERMS THEREOF
AND ACKNOWLEDGE THAT IT EXPRESSES MY INTENT AND UNDERSTANDING. I HEREBY AGREE
TO ACCEPT __________ SHARES OF BRIDGESTONE CORP. COMMON STOCK IN EXCHANGE FOR
__________ SHARES OF IMAGE TECHNOLOGY, INC.
_________________________________________
Subscriber
Print Name: ______________________________________
Address:__________________________________________
__________________________________________
Telephone:(___)___________________________________
Soc. Sec.#:_______________________________________
EXHIBIT C
SCHEDULE OF EXCEPTIONS TO COVENANTS,
REPRESENTATIONS AND WARRANTIES OF
IMAGE TECHNOLOGY, INC.
CONTRACTS AS TO WHICH ITI IS A CONTRACTING
PARTY AS OF JANUARY 31, 1997
1) Equipment Lease, Support and Maintenance Agreement with Indiana Bureau
of Motor Vehicles Commission, effective as of November 1, 1996.
2) Purchase Order dated October 7, 1992 (New Hampshire; originally AIMS).
3) Subcontract with Valley Software Systems, Inc. dated September 11, 1996.
4) Subcontract with XXX Xxxxxxxxxxx dated August 1, 1996 (Indiana).
5) NCR Purchase Order dated November 1, 1996 (Maryland).
6) Purchase Order No. 101596-2 Rev. 2 (1/14/97). Supplier: 3M Traffic
Control Materials Division.
7) Purchase Order No. 101596-1 Rev. 3 (1/15/97). Supplier: 3M Traffic
Control Materials Division.
8) Purchase Order No. 111196-01 dated 11/11/96. Supplier: Factura Kiosk.
9) Purchase Order No. 100196-1 dated 10/01/96. Supplier: Zebra Technologies
Corp.
EXHIBIT D
DESCRIPTION OF LIENS, MORTGAGES,
CHARGES AND ENCUMBRANCES OF
IMAGE TECHNOLOGY, INC.
NONE
EXHIBIT E
CONSENT OF BOARD OF DIRECTORS
OF
IMAGE TECHNOLOGY, INC.
A special meeting of the Board of Directors of Image Technology, Inc.
(the "Corporation"), a Nevada corporation, was held by consent and without an
actual meeting. The undersigned, being the Directors of the Corporation,
hereby waive notice of the time, place and purpose of this meeting of the
Board of Directors of the Corporation and, in lieu thereof, hereby agree and
consent to the taking of the following corporate actions and adoption of the
following directors' resolutions:
WHEREAS, the Corporation entered into a letter of intent dated January
24, 1997, and fully executed on January 30, l997, with Bridgestone Corp., a
Delaware corporation ("Bridgestone"), whereby the Corporation intends to sell
all of its issued and outstanding capital stock in exchange for a specified
number of shares of Bridgestone's common stock;
WHEREAS, the Bridgestone's legal counsel has prepared a formal agreement
consistent with the terms of the letter of intent, which agreement is entitled
"Plan and Agreement of Reorganization", a copy of which is attached as Exhibit
"A" hereto.
WHEREAS, it is in the Corporation's best interests to approve the terms
and the execution of the Plan and Agreement of Reorganization on behalf of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED that the terms and condition of the
exchange as set forth in the Plan and Agreement of Reorganization be, and the
same hereby are, ratified and confirmed, and the President of the Corporation
is authorized to execute the same on behalf of the corporation.
GENERAL AUTHORIZATION
BE IT RE80LVED that the President and the Secretary of the Corporation
be, and they hereby are, authorized, directed and empowered to prepare or
cause to be prepared, execute and deliver all such documents and instruments
and to undertake all auch actions as they deem necessary or advisable in order
to carry out and perform any or all of the matters contemplated by the Plan
and Agreement of Reorganization and as authorized in the foregoing resolution.
IN WITNESS WHEREOF, the undersigned have executed this written consent,
which shall be effective as of _______________, 1997.
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
_________________________________________
Xxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
EXHIBIT F
CONSENT OF SOLE DIRECTOR OF
BRIDGESTONE CORP.
A special meeting of the Board of Directors of Bridgestone Corp. (the
"Corporation"), a Delaware corporation, was held by consent and without an
actual meeting. The undersigned, being the sole Director, does hereby waive
notice of the time, place and purpose of this meeting of the Board of
Directors of the Corporation and, in lieu thereof, hereby agrees and consents
to the adoption of the following corporate actions.
WHEREAS, the Corporation entered into a letter of intent dated January
24, 1997, and fully executed on January 30, 1997, with Image Technology, Inc.,
a Nevada corporation ("ITI"), whereby the Corporation intends to purchase all
of the issued and outstanding capital stock of ITI in exchange for a specified
number of shares of the Corporation's common stock;
WHEREAS, the Corporation's legal counsel has prepared a formal agreement
consistent with the terms of the letter of intent, which agreement is entitled
"Plan and Agreement of Reorganization," a copy of which is attached hereto as
Exhibit A;
WHEREAS, it is in the Corporation's best interests to approve the terms
and the execution of the Plan and Agreement of Reorganization on behalf of the
Corporation;
NOW, THEREFORE, BE IT RESOLVED that the terms and conditions of the
exchange as set forth in the Plan and Agreement of Reorganization be, and the
same hereby are, ratified and confirmed, and the President of the Corporation
is authorized to execute the same on behalf of the Corporation.
GENERAL AUTHORIZATION
BE IT RESOLVED that the President and the Secretary of the Corporation
be, and they hereby are, authorized, directed and empowered to prepare or
cause to be prepared, execute and deliver all such documents and instruments
and to undertake all such actions as they deem necessary or advisable in order
to carry out and perform any or all of the matters contemplated by the Plan
and Agreement of Reorganization and as authorized in the foregoing resolution.
IN WITNESS WHEREOF, the undersigned has executed this written consent,
which shall be effective as of 6 March, 1997.
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
