EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
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THIS AGREEMENT AND PLAN OF REORGANIZATION is entered into as of the 27th
day of February, 2003 by and between the following:
(a) SOUTHBORROUGH VENTURES, INC. (the "Company"), a Nevada corporation,
whose address for purposes of this Agreement is 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxx Xxxxxxxx, XXXXXX X0X 0X0; and
(b) AMERICHIP VENTURES, INC. ("AVI"), a Michigan corporation, whose address
for purposes of this Agreement is 00000 X. Xxxxx Xxxx Xx., Xxxxxxx, XX 00000.
(c) AMERICHIP, INC. ("Americhip"), a Michigan corporation whose address for
purposes of this Agreement is 00000 X. Xxxxx Xxxx Xx., Xxxxxxx, XX 00000; and
(d) Those persons who are shareholders of Americhip Ventures, Inc. ("AVI
Shareholders") and execute this Agreement and agree to be bound by the terms and
conditions set forth herein.
Recitals.
A. The Company and AVI Shareholders desire to effect a Type B
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended, on the terms and conditions set forth below, whereby the Company
will acquire all of the issued and outstanding shares of AVI's common stock by
issuing solely in exchange therefore to AVI Shareholders, shares of the
Company's common stock (the "Company Common Stock").
NOW THEREFORE in consideration of the foregoing recitals, the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
I. BASIC TRANSACTION.
1.1 Plan of Reorganization. Subject to the terms and conditions of this
Agreement and pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended, the parties to this Agreement shall effect a Type B
reorganization (the "Reorganization") whereby all of the outstanding shares of
AVI's common stock will be exchanged for issuance to the AVI Shareholders of 60
million shares of the Company's common stock. The Reorganization shall take
place on the Closing Date (hereinafter defined in Section 1.2 of this Agreement)
and shall be accomplished in accordance with Article V below.
1.2 Closing. The closing of the Reorganization and exchange contemplated
and provided for in this Agreement (the "Closing") shall take at a time and
place to be mutually agreed upon by the parties no later than the third business
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day following the satisfaction or waiver of all conditions precedent to the
obligations of the parties to consummate the subject reorganization and exchange
(other than the conditions with respect to actions the respective parties will
take at the Closing itself) or such other date as the parties may mutually
determine (the "Closing Date"); provided, however, that the Closing Date shall
occur no later than on or before February 28, 2003.
1.3 Terms of Exchange. On the Closing Date:
(a) The Company shall ratably issue and cause to be delivered to the
AVI Shareholders certificates representing 60 million shares of the Company's
common stock, in consideration for the transfer to the Company by the AVI
Shareholders of all 225,000 shares of the issued and outstanding common stock of
AVI. No other shares of AVI's common stock are issued and outstanding on the
date of this Agreement nor shall be issued and outstanding on the Closing Date;
and
(b) The AVI Shareholders shall, in consideration for their receipt of
the shares of the Company's common stock, transfer and deliver to the Company
certificates representing all of the issued and outstanding shares of AVI's
common stock owned by them. The Company shall receive good and marketable title
to all of AVI's issued and outstanding common stock free and clear of all liens,
mortgages, pledges, claims or other rights or encumbrances whatever, whether
disclosed or undisclosed.
1.4 Restrictions on Transfer. The Company's common stock, when issued and
delivered hereunder, shall not be registered under the Securities Act of 1933,
as amended, nor shall the AVI Shareholders be granted any registration rights as
to such shares. Each certificate representing shares of the Company's common
stock will bear a customary restrictive legend which states in effect that such
shares have not been registered under the Securities Act of 1933 and
consequently may not be transferred, assigned, sold or hypothecated unless
registered under the Securities Act of 1933 or, in the opinion of Company's
counsel, an exemption from the registration requirements of the Securities Act
of 1933 is available for such transaction.
II. REPRESENTATIONS AND WARRANTIES.
2.1 Representations and Warranties of AVI. AVI hereby represents and
warrants to the Company that the statements contained in this Section 2.1 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though then made and as though the Closing
Date was substituted for the date of this Agreement throughout this Section
2.1), except as set forth in the disclosure schedule accompanying this Agreement
(the "AVI Disclosure Statement"). The AVI Disclosure Statement will be arranged
in paragraphs corresponding to the lettered subsections contained in this
Section 2.1.
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(a) Due Organization. AVI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Michigan and is
qualified to do business and is in good standing in all jurisdictions in which
such qualification is necessary. AVI has all requisite corporate power and
authority to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under this Agreement to which it
is a party.
(b) Due Authority. The execution, delivery and performance under this
Agreement and the documents provided for herein by AVI have been authorized by
all necessary corporate action.
(c) Capitalization. As of the date hereof and as of Closing, AVI's
authorized capitalization consists of 225,000 shares of common stock, no par
value, of which 225,000 shares are issued and outstanding and no other shares
have been reserved for issuance based upon certain specified contingencies. All
issued and outstanding shares have been duly authorized, validly issued and
fully paid and nonassessable with no personal liability attached to the
ownership thereof, and subject to no preemptive rights of any shareholder.
(d) Outstanding Options, Warrants or Other Rights. AVI has no
outstanding warrants, options or similar rights whereby any person may subscribe
for or purchase shares of its common stock, nor are there any other securities
outstanding which are convertible into or exchangeable for its common stock, and
there are no contracts or commitments pursuant to which any person may acquire
or AVI may become bound to issue any shares of its common stock.
(e) Minute Book. The Minute Book of AVI contains complete, true and
accurate copies of its Articles of Incorporation and bylaws (each as amended to
date) and all minutes of meetings or written consents in lieu of meetings of
shareholders, directors and committees of directors of AVI. Any copy of a
corporate document which has been or will be furnished to the Company is a true,
complete, correct and unmodified copy of such document.
(f) Officers and Directors. The officers and directors of AVI consists
of the following:
Name Office
---- ------
Xxxx Xxxxxxx Director, Secretary/Treasurer
Xxxxx Xxxxxx Director, President
Xxxxxx Xxxxxxxxx Director, Vice-President
(g) Noncontravention. The execution of this Agreement by AVI and the
consummation of the transactions contemplated hereby will not result in the
breach of any term or provision of, or constitute a default under, any provision
or restrictions of any indenture, agreement, or other instrument or any
judgment, order, or decree to which AVI is a party or by which it is bound, or
will it conflict with any provisions or the Articles of Incorporation or Bylaws
of AVI.
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(h) Financial Statement. The most recent financial statements of AVI,
which may be been provided to the Company and its representatives, fairly and
accurately represent the financial position of AVI as of such date and the
results of operations for the period then ended. The financial statements of AVI
have been prepared in accordance with generally accepted accounting principles.
The books of account and other records of AVI will in all respects be complete
and correct and maintained in accordance with good business and accounting
practices.
(i) Absence of Change. Since the date of the most recent financial
statements of AVI, there has not been any change in the financial condition or
operations of AVI, except for changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
(j) Assets and Liabilities. At Closing, AVI will own at least 80% of
the issued and outstanding shares of Americhip, Inc., shall have a License
Agreement with Americhip, Inc. granting it, upon terms mutually agreeable
between the parties, a license to use proprietary technology and patented laser
process, and shall not have any liabilities, obligations or outstanding accounts
due and payable. At Closing, AVI shall have good and marketable title to its
shares of Americhip, Inc.'s common stock free and clear of all liens, rights,
claims, encumbrances, other pledges or security interests and all other defects
of title or other matters whatsoever.
(k) Litigation. There are no suits, actions or proceedings at law or
in equity, pending or to the knowledge of AVI Shareholders threatened against or
affecting AVI that can be expected to result in any materially adverse change in
the business, properties, operations, prospects, or assets or in its condition,
financial or otherwise. At Closing, there will be no outstanding order,
judgment, injunction, award or decree of any court, government or regulatory
body or other tribunal against or involving AVI.
(l) Laws and Regulations. AVI has complied with all laws, rules,
regulations and ordinances relating to or affecting the conduct of AVI's
business and AVI possesses and holds all licenses and permits required in its
business by federal, state or local authorities.
(m) Full Disclosure. Neither this Agreement nor any other instrument
furnished to the Company by or on behalf of AVI contains any untrue statement of
a material fact or omits to state a material fact necessary to make any
statements made not misleading, and there is no fact that materially and
adversely affects, or foreseeably may materially and adversely affect, AVI's
financial condition, liabilities, business, or assets that have not been
disclosed herein or in any other instrument.
(n) Representations and Warranties True at Closing. Except as
expressly herein otherwise provided, all of the representations and warranties
of AVI set forth herein shall be true as of the Closing Date as though such
representations and warranties were made on and as of such date.
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2.2 Representations and Warranties of the Company. The Company represents
and warrants to AVI and its shareholders that the statements contained in this
Section 2.2 are correct and complete as of the date of this Agreement and will
be correct and complete as of the Closing Date (as though then made and as
though the Closing Date was substituted for the date of this Agreement
throughout this Section 2.2), except as set forth in the disclosure schedule
accompanying this Agreement (the "Company Disclosure Statement"). The Company
Disclosure Statement will be arranged in paragraphs corresponding to the
lettered subsections contained in this Section 2.2.
(a) Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada and is
qualified to do business and is in good standing in all jurisdictions in which
such qualification is necessary. The Company has all requisite corporate power
and authority to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under this Agreement to which it
is a party.
(b) Due Authority. The execution, delivery and performance under this
Agreement and the documents provided for herein by Company have been authorized
by all necessary corporate action.
(c) Capitalization. The Company's authorized capitalization presently
consists of 100 million shares of common stock, $0.0001 par value, of which as
of February 10, 2003, 20,020,000 shares are issued and outstanding (after
distribution of three additional shares for one share stock dividend which
occurred on or about January 27, 2003 to shareholders of record on January 23,
2003) and no shares have been reserved for future issuance based upon certain
specified contingencies. All issued and outstanding shares have been duly
authorized, validly issued and fully paid and nonassessable and all shares of
Company's Common Stock to be issued and delivered on the Closing Date to the AVI
Shareholders pursuant to the Agreement will be, when so delivered, duly
authorized and validly issued and outstanding, fully paid and non-assessable
with no personal liability attached to the ownership thereof, and subject to no
preemptive rights of any shareholder.
(d) Outstanding Options, Warrants or Other Rights. The Company has no
outstanding warrants, options or similar rights whereby any person may subscribe
for or purchase shares of its common stock, nor are there any other securities
outstanding which are convertible into or exchangeable for its common stock, and
there are no contracts or commitments pursuant to which any person may acquire
or the Company may become bound to issue any shares of such common stock.
(e) Financial Statements. The Company's most recent financial
statements dated as of August 31, 2002, as contained in its Form 10-QSB as filed
with the Securities and Exchange Commission, has been prepared in accordance
with generally accepted accounting principles. These financial statements fairly
represent the financial position of the Company as of such date and the results
of operations for the period then ended. The books of account and other records
of the Company are in all respects complete and correct and are maintained in
accordance with good business and accounting practices.
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(f) Adverse Changes. Since the date of the financial statements
described in Section 2.2(e) above, there have not been, and prior to the Closing
Date, there will not be, any material changes in the financial position of the
Company and its subsidiaries (if any) except changes arising in the ordinary
course of business, which changes have not been materially adverse in the
aggregate.
(g) Liabilities. At Closing, the Company shall not have any
liabilities, obligations or outstanding accounts due and payable, except as
those incurred in the ordinary course of business after August 31, 2002 to the
date of Closing.
(h) Undisclosed Liabilities. The Company does not have any liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due) except for liabilities set forth on the face
of the Balance Sheet delivered to AVI in accordance with the provisions of
Section 2.2(e) above, and liabilities which have arisen after the date of the
financial statements provided in accordance with the provisions of Section
2.2(e) above in the ordinary course of the Company's business.
(i) Minute Book. The Minute Book of the Company contains complete,
true and accurate copies of its Articles of Incorporation and bylaws (each as
amended to date) and all minutes of meetings or written consents in lieu of
meetings of shareholders, directors and committees of directors of the Company.
Any copy of such corporate document which has been or will be furnished to AVI
is a true, complete, correct and unmodified copy of such document.
(j) Noncontravention. The execution of this Agreement by the Company
and the consummation of the transactions contemplated hereby will not result in
the breach of any term or provision of, or constitute a default under, any
provision or restrictions of any indenture, agreement, or other instrument or
any judgment, order, or decree to which the Company is a party or by which it is
bound, or will it conflict with any provisions or the Articles of Incorporation
or Bylaws of the Company.
(k) Employee Contracts. The Company has not entered into any
employment agreement or other contractual arrangement with any officer,
director, employee or consultant which provides for, or obligates the Company to
pay, compensation or any other amount upon, or after, the termination of said
agreement or other contractual arrangement.
(l) SEC Filings. The Company has made all filings with the SEC that it
has been required to make under the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (collectively the "Public Reports").
Each of the Public Reports has complied with the Securities Act and the
Securities Exchange Act in all material respects. None of the Public Reports, as
of their respective dates, contained any untrue statement of a material fact, or
omitted to state a material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading.
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(m) Litigation. There are no suits, actions or proceedings at law or
in equity, pending or, to the knowledge of the Company's officers, threatened
against or affecting the Company that can be expected to result in any
materially adverse change in the business, properties, operations, prospects, or
assets or in its condition, financial or otherwise. There is no outstanding
order, judgment, injunction, award or decree of any court, government or
regulatory body or other tribunal against or involving the Company.
(n) Laws and Regulations. The Company has complied with all laws,
rules, regulations and ordinances relating to or affecting the conduct of the
Company's business and the Company possesses and holds all licenses and permits
required in its business by federal, state or local authorities.
(o) Full Disclosure. Neither this Agreement nor any other instrument
furnished to AVI by or on behalf of the Company contains any untrue statement of
a material fact or omits to state a material fact necessary to make any
statements made not misleading, and there is no fact that materially and
adversely affects, or foreseeably may materially and adversely affect, the
Company's financial condition, liabilities, business, or assets that have not
been disclosed herein or in any other instrument.
(p) Officers and Directors. As of the date of this Agreement, the
officers and directors of the Company consist of the following:
Name Office
---- ------
Xxxx Xxxxxx Director, President, Secretary and Treasurer
Xxxxxxxxxxx Xxxxxxx Director
As of the date of the Agreement, the Company has one vacancy in the Board
of Directors due to the prior resignation of Xxxxxxxx Xxxxxxx.
(q) Representations and Warranties True at Closing. Except as
expressly herein otherwise provided, all of the representations and warranties
of the Company set forth herein shall be true as of the Closing Date as though
such representations and warranties were made on and as of such date.
2.3 Representations and Warranties of AmeriChip. Inc. Americhip, Inc.
hereby represents and warrants to the Company that the statements contained in
this Section 2.3 are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though then made and as
though the Closing Date was substituted for the date of this Agreement
throughout this Section 2.3), except as set forth in the disclosure schedule
accompanying this Agreement (the "Americhip Disclosure Statement"). The
Americhip Disclosure Statement will be arranged in paragraphs corresponding to
the lettered subsections contained in this Section 2.3.
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(a) Due Organization. Americhip is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Michigan
and is qualified to do business and is in good standing in all jurisdictions in
which such qualification is necessary. Americhip has all requisite corporate
power and authority to conduct its business, to own its properties and to
execute and deliver, and to perform all of its obligations under this Agreement
to which it is a party.
(b) Due Authority. The execution, delivery and performance under this
Agreement and the documents provided for herein by Americhip have been
authorized by all necessary corporate action..
(c) Capitalization. As of the date hereof and as of Closing,
Americhip's authorized capitalization consists of 60,000 shares of common stock,
no par value, of which 900 shares are issued and outstanding and no other shares
have been reserved for issuance based upon certain specified contingencies. All
issued and outstanding shares have been duly authorized, validly issued and
fully paid and nonassessable with no personal liability attached to the
ownership thereof, and subject to no preemptive rights of any shareholder.
(d) Outstanding Options, Warrants or Other Rights. Amerihcip has no
outstanding warrants, options or similar rights whereby any person may subscribe
for or purchase shares of its common stock, nor are there any other securities
outstanding which are convertible into or exchangeable for its common stock, and
there are no contracts or commitments pursuant to which any person may acquire
or Americhip may become bound to issue any shares of its common stock.
(e) Stock Ownership. At Closing, AVI shall be at least an 80% owner of
all of the issued and outstanding common stock of Americhip.
(f) Minute Book. The Minute Book of Americhip contains complete, true
and accurate copies of its Articles of Incorporation and bylaws (each as amended
to date) and all minutes of meetings or written consents in lieu of meetings of
shareholders, directors and committees of directors of Americhip. Any copy of a
corporate document which has been or will be furnished to the Company is a true,
complete, correct and unmodified copy of such document.
(g) Officers and Directors. The officers and directors of Americhip
consists of the following:
Name Office
---- ------
Xxxx Xxxxxxx Director, Secretary/Treasurer
Xxxxx Xxxxxx Director, President
Xxxxxx Xxxxxxxxx Director, Vice Preesident
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(h) Noncontravention. The execution of this Agreement by Americhip and
the consummation of the transactions contemplated hereby will not result in the
breach of any term or provision of, or constitute a default under, any provision
or restrictions of any indenture, agreement, or other instrument or any
judgment, order, or decree to which Americhip is a party or by which it is
bound, or will it conflict with any provisions or the Articles of Incorporation
or Bylaws of Americhip.
(i) Financial Statement. The most recent financial statements of
Americhip, which may be been provided to the Company and its representatives,
fairly and accurately represent the financial position of Americhip as of such
date and the results of operations for the period then ended. The financial
statements of Americhip have been prepared in accordance with generally accepted
accounting principles. The books of account and other records of Americhip will
in all respects be complete and correct and maintained in accordance with good
business and accounting practices.
(j) Absence of Change. Since the date of the most recent financial
statements of Americhip, there has not been any change in the financial
condition or operations of Americhip, except for changes in the ordinary course
of business, which changes have not in the aggregate been materially adverse.
(k) License Agreement. At Closing, an executed and binding License
Agreement shall exist between Americhip and AVI whereby AVI shall be granted the
right to the use of Americhip's proprietory technology and patented laser
process pursuant to terms which are mutually agreed upon between the parties.
(l) Liabilities. At Closing, Americhip shall not have any liabilities,
obligations or outstanding accounts due and payable except those arising in the
ordinary course of Americhip's business.
(m) No Infringement. Americhip's rights to all patents, trademarks,
technology, know-how and tangible and intangible proprietary information, and
the products or services to be sold or licensed by, or under development by,
Americhip do not infringe on any existing patent or other intellectual property
rights or any other proprietary right of any person or give rise to any
obligations to any person as a result of co-authorship, co-inventorship, or an
express or implied contract for any use or transfer. Americhip has received no
notice nor has any knowledge of any allegations or threats that Americhip's use
of any of its intellectual property rights infringe upon or is in conflict with
any intellectual property rights of any third party, and to Americhip's
knowledge, no basis exists for any such allegations or threats.
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(n) Litigation. There are no suits, actions or proceedings at law or
in equity, pending or, to the knowledge of Americhip shareholders, threatened
against or affecting Americhhip that can be expected to result in any materially
adverse change in the business, properties, operations, prospects, or assets or
in its condition, financial or otherwise. There are no outstanding order,
judgment, injunction, award or decree of any court, government or regulatory
body or other tribunal against or involving Americhip.
(o) Laws and Regulations. Americhip has complied with all laws, rules,
regulations and ordinances relating to or affecting the conduct of Americhip's
business and Americhip possesses and holds all licenses and permits required in
its business by federal, state or local authorities.
(p) Full Disclosure. Neither this Agreement nor any other instrument
furnished to the Company by or on behalf of Americhip contains any untrue
statement of a material fact or omits to state a material fact necessary to make
any statements made not misleading, and there is no fact that materially and
adversely affects, or foreseeably may materially and adversely affect,
Americhip's financial condition, liabilities, business, or assets that have not
been disclosed herein or in any other instrument.
(q) Representations and Warranties True at Closing. Except as
expressly herein otherwise provided, all of the representations and warranties
of Americhip set forth herein shall be true as of the Closing Date as though
such representations and warranties were made on and as of such date.
2.4 Representations and Warranties of AVI Shareholders. Each of the AVI
Shareholders hereby represents and warrants to the Company that the statements
contained in this Section 2.4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as though
then and as though the Closing Date was substituted for the date of this
Agreement throughout this Section 2.4).
(a) Marketable Title. The AVI Shareholders will transfer and convey to
the Company good and marketable title in and to all of the issued and
outstanding common stock of AVI free and clear of any liens, claims,
encumbrances, other pledges or security interests, and all other defects or
title or other matters whatsoever.
(b) Investment Intent. The AVI Shareholders are acquiring the shares
of the Company's Common Stock as contemplated under the terms of this Agreement
for investment and not with a view to the distribution thereof.
III. COVENANTS.
From the date of this Agreement until the Closing Date, the Company, AVI,
Americhip and the AVI Shareholders agree as follows:
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3.1 General. Each of the parties hereto will use its best efforts to take
all actions and to do all things necessary in order to consummate and make
effective the transaction contemplated by this Agreement (including satisfaction
of the closing conditions set forth in Article IV below).
3.2 Notices and Consents. Each of the parties hereto will give any notices
to third parties, and will use its best efforts to obtain any third party
consents, that the other party reasonably may request in connection with any
matter referred to in Sections 2.1 or 2.2 above.
3.2 Regulatory Matters and Approvals. The parties hereto will give notices
to, make any filings with, and use its best efforts to obtain any
authorizations, consents and approvals of governments and governmental agencies
in connection with the matters referred to herein. Without limiting the
generality of the foregoing:
(a) Private Placement. The shares of the Company's Common Stock to be
issued in connection with the Reorganization will be offered and issued to the
AVI Shareholders pursuant to (i) the private placement exemption from the
registration requirements of the Securites Act of 1933, as amended, provided by
Section 4(2) and Regulation D promulgated thereunder and (ii) similar
registration exemption under Michigan's securities law, or any other "blue sky"
or securities law of any jurisdiction that is applicable to the Reorganization.
Each AVI Shareholder will execute and deliver to the Company and investment
representation letter and other document reasonably necessary to support a
registration exemption, in which the AVI Shareholder makes such represents and
warranties to the Company as the Company and its counsel deems reasonably
necessary to enable the Company to avail itself of the registration exemptions
described herein. The investment letter and other documents shall be executed
and delivered to the Company by each AVI Shareholder on or prior to the
Closing..
(b) Michigan Corporation Law. To the extent required under Michigan
corporation laws, AVI will call a special meeting of its shareholders as soon as
reasonably practicable in order that its shareholders may consider and vote upon
the adoption of this Agreement and the approval of the Reorganization with the
resultant sale and transfer to the Company of all of the issued and outstanding
shares of AVI's common stock.
3.4 Conduct of Business. Prior to Closing, Americhip and the Company shall
conduct their respective business in the normal course, and shall not transfer,
sell or convey any assets or properties without the prior written consent of the
other party, except in the ordinary course of business. Americhip shall not
amend its articles of incorporation or bylaws, declare dividends, incur
additional or newly-funded liabilities, acquire or dispose of fixed assets,
enter into any material or long-term contracts, guarantee obligations of third
parties, or enter into any transaction other than in the normal course of
business. Except as may be necessary to implement the terms of this Agreement
and file required periodic reports or proxy statements with the Securities and
Exchange Commission, the Company shall not amend its articles of incorporation
or bylaws, declare dividends, incur additional or newly-funded liabilities,
acquire or dispose of fixed assets, enter into any material or long-term
contracts, guarantee obligations of third parties, or enter into any transaction
other than in the normal course of business.
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3.5 Access. The Company, AVI and Americhip each agree that they will permit
the other's directors, officers, accountants, attorneys and other
representatives full access, during reasonable business hours throughout the
term or applicability of this Agreement, to all premises, properties, personnel,
books, records, contracts and documents of or pertaining to the other's business
affairs, operations, properties and financial affairs as the other party may
reasonably request. All information provided shall be furnished strictly subject
to the confidentiality provision of this Agreement.
3.6 Confidentiality. All information and documents furnished by a party
pursuant to Section 3.5 of this Agreement shall be deemed and treated as
proprietary in nature. Each party (and the AVI Shareholders) agree that it shall
hold all information received from another party pursuant to or in connection
with this Agreement in the highest and strictest confidence and shall not reveal
any such information to any individual who is not one of its directors,
officers, key employee, attorney or accountant, and that it will not use any
such information obtained for any purpose whatsoever other than assisting in its
due diligence inquiry precedent to the Closing and, if this Agreement is
terminated for any reason whatsoever, agrees to return to the other party any
all tangible embodiments (and all copies) thereof which are in its possession.
This covenant shall survive the consummation or termination of this Agreement.
3.7 Publicity and Filings. All press releases, shareholder communications,
filings with the Securities and Exchange Commission or other governmental agency
or body and other information and publicity generated by the Company or AVI
regarding the Reorganization and exchange contemplated in this Agreement shall
be reviewed and approved by the other party and its counsel before release or
dissemination to the public or filing with any governmental agency or body
whatever.
3.8 Notice of Developments. Each party hereto will give prompt written
notice to the other of any material adverse development causing a breach of any
of its own representations and warranties in Sections 2.1, 2.2 and 2.3 above. No
disclosure by any party hereto pursuant to this Section 3.8, however, shall be
deemed to amend or supplement the disclosure statement provided under the terms
of this Agreement or to prevent or cure any breach of warranty, breach of
covenant or misrepresentation.
3.9 Stand-Still Agreement. Americhip and AVI will not (and each AVI
Shareholder agrees that he will not on behalf of AVI) solicit, initiate, or
encourage the submission of any proposal or offer from any person or entity
relating to the acquisition of all or substantially all of the capital stock or
assets of Americhip or AVI (including any acquisition structured as a merger,
consolidation, or share exchange). Americhip and AVI shall notify the Company
immediately if any person or entity makes any proposal, offer, inquiry, or
contact with respect to any such unsolicited offer or expression of interest.
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3.10 Covenants of AVI Shareholders. Each of the AVI Shareholders covenants
and agrees with, and represents to, the Company as follows:
(a) No Registration of Company Stock. Each of the AVI Shareholders
understands that none of the shares of the Company's Common Stock to be received
from the Company at Closing have been registered under the Securities Act of
1933 or any applicable securities laws of any state. Each of the Shareholders
hereby represents and warrants that the shares of the Company's Common Stock are
being acquired by him solely for investment and not with a view to distribution
or immediate resale thereof.
(b) Stock Legend. Each of the AVI Shareholders further agree and
understand that each certificate representing such shares of the Company's
Common Stock issued under the Reorganization and exchange provided for under
this Agreement will bear the customary restrictive legend conspicuously noted on
said certificate.
3.11 Election of Officers. The Company agrees that Xxxxx Xxxxxx, the
current President of AVI, shall remain as the President of AVI after the
consummation of the Reorganization and exchange provided for under the terms of
this Agreement and shall be further authorized, subject to approval of AVI's
existing Board of Directors, to select the officers and directors of AVI. The
Company covenants and agrees that Xxxx Xxxxxxxx, Xxxxx Xxxxxx and Xxxxxx
Xxxxxxxxx, or such other designated persons, shall be appointed as the new
members of the Company's Board of Directors, effective as of the Closing Date.
This covenant shall survive the consummation of this Agreement.
IV. CONDITIONS TO THE EXCHANGE.
4.1 Conditions Precedent to Exchange by Company. The obligation of the
Company to consummate the Reorganization contemplated by this Agreement are
subject to satisfaction, or written waiver by the Company, of the following
conditions at or before the Closing Date:
(a) Representations and Warranties True. The representations and
warranties by AVI, Americhip and the AVI Shareholders in the Agreement shall
have been correct on and as of the Closing Date with the same force and effect
(except as expressly provided in the Agreement or otherwise approved in writing
by the Company) as though such representations and warranties had been made on
and as of the Closing Date.
(b) No Adverse Change. Neither AVI nor Americhip shall not have
suffered any adverse change in their respective financial condition or their
respective business and no properties or assets of AVI nor Americhip shall have
suffered any destruction, damage or loss, whether or not covered by insurance.
13
(c) Performance. AVI, the AVI Shareholders and Americhip shall have
performed all of the terms, covenants, agreements and conditions of the
Agreement on their respective parts to be performed.
(d) License Agreement. The terms of the License Agreement between AVI
and Americhip concerning the use of Americhip's proprietory technology and
patented laser process shall be satisfactory and acceptable to the Company.
(e) Shareholder Approval. The AVI shareholders shall have approved the
terms and conditions of the Reorganization resulting in the issuance of the
Company's Common Stock as provided for herein and no AVI shareholder shall
dissent with respect to the Reorganization provided for in this Agreement.
(f) Investment Letter. Each AVI Shareholder shall have executed and
delivered to the Company an investment letter and such other documents as
contemplated in Section 3.10(a) above.
(g) Legal Opinion. The Company shall have received the favorable
written opinion of counsel for AVI as to those matters set forth in Exhibit A
attached hereto and any other matter which the Company may reasonably requested
in connection with the Reorganization provided for in this Agreement. In
rendering the required opinion, counsel may, as to any factual matter, rely upon
a certificate of any public official and any officer of AVI who is cognizant of
such fact.
(h) No Restraint. No injunction or restraining order shall be in
effect to forbid or enjoin the consummation of this Agreement.
(i) Approval of Documents. All legal matters in connection with the
consummation of the Reorganization contemplated by this Agreement and all
documents and instruments delivered in connection therewith shall be reasonably
satisfactory in form and in substance to counsel for the Company and such
counsel shall have received authenticated copies of those copies of the
corporate documents and certificates as counsel for the Company may reasonably
request in connection with this transaction.
4.2 Conditions to AVI's Obligations. The obligations of AVI and the AVI
Shareholders to consummate the Reorganization contemplated by this Agreement are
subject to satisfaction or written waiver by AVI and the AVI Shareholders of the
following conditions at or before the Closing Date:
(a) Representations and Warranties True. The representations and
warranties by the Company in the Agreement shall have been correct on and as of
the Closing Date with the same force and effect (except as expressly provided in
the Agreement or otherwise approved in writing by the Shareholders) as though
such representations and warranties had been made on and as of the Closing Date.
14
(b) No Adverse Change. The Company shall not have suffered any adverse
change in its financial condition or business and no properties or assets of the
Company shall have suffered any destruction, damage or loss, whether or not
covered by insurance.
(c) Performance. The Company shall have performed all of the terms,
covenants, agreements and conditions of the Agreement on its part to be
performed.
(d) Resignations. The Company shall have received from each of the
directors and officers of the Company a written resignation letter, in form and
substance satisfactory to the AVI Shareholders, such resignations to be
effective at the Closing or such other date as may be agreed to by the AVI
Shareholders.
(e) Legal Opinion. AVI shall have received the favorable written
opinion of counsel for the Company as to those matters set forth in Exhibit A
attached hereto and any other matter which AVI may reasonably request in
connection with the Reorganization provided for in this Agreement. In rendering
the required opinion, counsel may, as to any factual matter, rely upon a
certificate of any public official and any officer of the Company who is
cognizant of such fact.
(f) No Restraint. No injunction or restraining order shall be in
effect to forbid or enjoin the consummation of this Agreement.
(g) Approval of Documents. All legal matters in connection with the
consummation of the Reorganization contemplated by this Agreement and all
documents and instruments delivered in connection therewith shall be reasonably
satisfactory in form and in substance to counsel for AVI and such counsel shall
have received authenticated copies of those copies of the corporate documents
and certificates as counsel for AVI may reasonably request in connection with
this transaction.
V. ACTIONS AT CLOSING.
5.1 Exchange. Each of the 225,000 shares of AVI's common stock that shall
be outstanding on the Closing Date and held by a AVI Shareholder shall be
converted into Two Hundred Sixty-Six and Two/Thirds (266.666) fully paid and
nonassessable shares of the Company's Common Stock; provided, however, that the
number of shares of the Company's Common Stock into which shares of AHTI's
common stock are to converted shall be rounded off to the nearest whole number
of shares, and no fractional shares shall be issued. The number of shares of the
Company's Common Stock that each AVI shareholder shall receive in exchange for
his or her shares of AVI's common stock is set forth in Exhibit B attached
hereto.
5.2 Shareholders' Actions at Closing. On the Closing Date, the AVI
Shareholders, contemporaneously with the performance by Company of its
obligations to be performed at the Closing, shall deliver to the Company the
following:
15
(a) AVI Stock Certificates. Stock certificates representing all of the
outstanding shares of AVI's common stock endorsed for transfer, with all
necessary stock assignments and other pertinent documents.
(b) Certified Corporate Resolutions. Certified copy of the resolutions
duly adopted by the Board of Directors and the shareholders of AVI authorizing
and approving the execution and delivery of this Agreement and the performance
of its obligations hereunder.
(c) Opinion. The opinion of counsel as described in Section 4.1(f) of
this Agreement; and
(e) Other Documents. Such further certificates and documents as shall
be reasonably requested by counsel for the Company to insure compliance by AVI
and AVI's shareholders of all obligations imposed upon them hereunder.
5.3 Company's Actions at Closing. On the Closing Date, the Company,
contemporaneously with the performance by AVI and the AVI shareholders of their
obligations to be performed at the Closing, shall deliver to the AVI
shareholders the following:
(a) Company Stock Certificates. Stock certificates representing an
aggregate of 60 million shares of Company's Common Stock to which each AVI
shareholder shall be entitled to receive pursuant to this Agreement, as set
forth in Exhibit Battached hereto, with each certificate bearing the restrictive
legend described in Section 1.4 above.
(b) Certified Corporate Resolutions. Certified copy of the resolutions
duly adopted by the Board of Directors of the Company authorizing and approving
the execution and delivery of this Agreement by the Company and the performance
of its obligations hereunder.
(c) Opinion. The opinion of counsel as described in Section 4.2(d) of
this Agreement; and
(d) Other Documents. Such further certificates and documents as shall
be reasonably requested by counsel to AVI and AVI shareholders to insure
compliance by the Company with all obligations imposed upon it hereunder.
5.4 Stock Rights. On the Closing Date, the AVI shareholders who have
exchanged their shares of AVI's comon stock for shares of the Company's Common
Stock shall thereupon cease to have any rights with respect to their AVI shares
and their sole right thereafter shall be with respect to the shares of the
Company's Common Stock received hereunder.
VI. TERMINATION.
6.1 Termination of Agreement. This Agreement may be terminated as provided
below:
16
(a) The parties hereto may terminate this Agreement by mutual consent
at any time prior to the Closing Date;
(b) The Company may terminate this Agreement by giving written notice
to the Shareholders at any time prior to the Closing Date (1) in the event AVI
and/or the AVI Shareholders have breached any material representation, warranty,
or covenant contained in this Agreement in any material respect, the Company has
notified AVI and/or the AVI Shareholders of this breach, and the breach has
continued without cure for a period of 10 days after the notice of breach, or
(2) if the Closing shall not have occurred on or before February 28, 2003 by
reason of the failure of any condition precedent under Section 4.1 hereof
(unless the failure results primarily from the Company breaching any
representation, warranty, or covenant contained in this Agreement); and
(c) AVI and the AVI Shareholders may terminate this Agreement by
giving written notice to the Company at any time prior to the Closing Date (1)
in the event the Company has breached any material representation, warranty, or
covenant contained in this Agreement in any material respect, AVI and the AVI
Shareholders have notified the Company of this breach, and the breach has
continued without cure for a period of 10 days after the notice of breach, or
(2) if the Closing shall not have occurred on or before February 28, 2003 by
reason of the failure of any condition precedent under Section 4.2 hereof
(unless the failure results primarily from the Shareholders and/or AVI breaching
any representation, warranty, or covenant contained in this Agreement).
6.2 Effect of Termination. If any party hereto terminates this Agreement
pursuant to Section 6.1 above, all rights and obligations of the parties
hereunder shall terminate without any liability of any party to the other party
(except for any liability of any Party then in breach); provided, however, that
the confidentiality provisions contained in Section 3.6 above shall survive any
such termination.
VII. GENERAL PROVISIONS.
7.1 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties concerning the subject matter hereof and
supersedes any and all prior negotiations, understandings or agreements in
regard thereto.
7.2 Applicable Law. This Agreement shall be construed in accordance and
governed by the laws of the State of Nevada.
7.3 Notices. Unless otherwise changed by notice given in accordance with
this provision, any notice or other communications required or permitted herein
shall be deemed given if delivered personally or sent by certified mail, postage
prepaid, return receipt requested, addressed to the other parties at the
addresses set forth above or, in the case of the Shareholders, at the address
set forth across from their signature.
17
7.4 Waiver. All rights and remedies under this Agreement are cumulative and
are not exclusive of any other rights and remedies provided by law. No delay or
failure in the exercise of any right or remedy arising under this Agreement
shall operate as a waiver of any subsequent right or remedy subsequently arising
under this Agreement.
7.5 Survival of Provisions. All agreements, representations, covenants and
warranties on the part of the parties contained herein or in any instrument
executed and delivered in connection herewith shall survive closing of this
Agreement and any investigation at any time made with respect thereto.
7.6 Expenses. Each party will party will bear their own respective costs
and expenses in connection with the preparation of this Agreement and
consummation of the transaction contemplated herein.
7.7 No Finder's and Broker's Fees. The parties hereto have not retained the
services of any person in connection herewith and the parties agree to mutually
indemnity and hold each other harmless from any and all loss, claims, costs and
expenses (including attorney's fees) occasioned to the other by reason of the
claim of any person to compensation arising from the consummation of the
transactions provided for herein.
7.8 Attorney's Fees. In the event of litigation for enforcement of the
terms of this Agreement or to enforce any remedy hereunder, the prevailing party
shall be entitled to recover from the other party any and all costs and
expenses, including reasonable attorney's fees, as may be incurred.
7.9 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective personal representatives,
successors and assigns.
7.10 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.11 Execution by Facsimile. Facsimile execution of this Agreement by any
party is authorized and shall be binding upon all parties.
7.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original hereof.
18
IN WITNESS WHEREOF, this Agreement has been executed on the date first
above written.
AMERICHIP VENTURES, INC.
By /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx, its President
SOUTHBORROUGH VENTURES, INC.
By /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx, President
AMERICHIP, INC.
By /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx, its President
19
SHAREHOLDER AGREEMENTS AND COVENANTS
------------------------------------
THE UNDERSIGNED, each being shareholders of Americhip Ventures, Inc.
("AVI"), hereby represent that they own the number of shares of AVI's common
stock as set forth beneath their respective signature below and further covenant
and agree to comply with, undertake to perform, and abide by, the various
covenants, warranties and undertakings as set forth within the terms and
conditions of the foregoing Agreement and Plan of Reorganization dated February
27, 2003 by and between Americhip Ventures, Inc. and Southborrough Ventures,
Inc.
EXECUTED on the date set forth below the respective signatures.
Addresses SHAREHOLDERS:
00000 Xxxxxxx Xx. /s/ Xxxx X. Xxxxxxx
Xxxxxx, XX 00000 -------------------------------
Name: Xxxx Xxxxxxx
Number of Shares: 75,000
Date: February __,2003
0000 X. Xxxxx Xxxxx Xx. /s/ Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000 -------------------------------
Name: Xxxxx Xxxxxx
Number of Shares: 75,000
Date: February __, 2003
00000 Xxxxxx Xxxx Xx /s/ Xxxxxx Xxxxxxxxx
Xxxxxx XXX, XX 00000 -------------------------------
Name: Xxxxxx Xxxxxxxxx
Number of Shares: 75,000
Date: February __,2003
20
EXHIBIT A
---------
THIS EXHIBIT is attached to and made a part of that certain Agreement and
Plan of Reorganization dated February 27, 2003 between and among SOUTHBORROUGH
VENTURES, INC. (the "Company"), AMERICHIP VENTURES, INC. ("AVI"), AMERICHIP,
INC. ("Americhip"), and the shareholders of AVI.
Legal Opinion
-------------
The legal opinion shall contain the following:
1. The Company [AVI] is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada [Michigan].
2. The authorized capital stock of the Company [AVI] and the shares of
common stock of the Company [AVI] are as set forth in the Company's
[AVI's] representations. All outstanding shares of the Company's
[AVI's] common stock are duly and validly authorized and issued, are
fully paid and nonassessable, and have not been issued in violation of
any preemptive rights of stockholders, if any. To the knowledge of
such counsel, there is no existing option, warrant, call,
subscription, or other agreement or commitment obligating the Company
[AVI] to issue or sell, or to purchase or redeem, any shares of its
capital stock other than those represented by the Company [AVI] to AVI
[the Company] in this Agreement.
3. To their knowledge, all consents or approvals by third parties
required in connection with the execution and consummation of this
Agreement have been duly obtained and no consents or approvals by any
additional third parties or by any governmental agency are required in
connection therewith.
4. To their knowledge, the execution of this Agreement and the
transactions contemplated hereby will no result in the breach of any
term or provision of, or constitute a default under, any provision or
restriction of any indenture, agreement, or other instrument to which
the Company [AVI] is a party or by which it is bound, nor will it
conflict with the provisions of the Articles of Incorporation or
Bylaws of the Company [AVI].
5. All corporate action (including the Board of Directors and approval by
the Stockholders) required to authorize the transactions contemplated
by this Agreement have been duly and properly taken.
6. The Agreement have been duly authorized, executed, and delivered by
the Company [AVI] and constitutes a valid agreement, legally binding
upon the Company [AVI} and enforceable in accordance with its terms.
21
7. The Stockholders of AVI have full right and power to transfer and
deliver their shares pursuant to this Agreement, free and clear of any
liens, encumbrances, restrictions or claims.
Additional items for inclusion in opinion provided by Company's counsel:
1. The Company has filed with the Securities Exchange Commission and any
applicable state securities agency all reports or other documents
required of it to assert and claim an exemption from the registration
provisions of the Securities Act of 1933, as amended, and any
applicable state securities laws with respect to the issuance to the
shareholders of AVI of the shares of the Company's Common Stock.
22
EXHIBIT B
---------
THIS EXHIBIT is attached to and made a part of that certain Agreement and
Plan of Reorganization dated February 27, 2003 between and among SOUTHBORROUGH
VENTURES, INC. (the "Company"), AMERICHIP VENTURES, INC. ("AVI"), AMERICHIP,
INC. ("Americhip") and the shareholders of AVI.
Ownership List
--------------
The following is the name and address of each AVI shareholder, together
with the number of his shares of AVI's common stock, and the number of shares of
the Company's Common Stock which the Company shall issue to such shareholder in
accordance with the terms of the above referenced Agreement:
AVI Shareholder Shares of AVI Shares of Company
Name and Address Common Stock Common Stock
---------------- ------------ ------------
Xxxxx Xxxxxx 75,000 20,000,000
Xxxx Xxxxxxx 75,000 20,000,000
Xx Xxxxxxxxx 75,000 20,000,000
23
DISCLOSURE STATEMENT
--------------------
THIS DISCLOSURE STATEMENT is attached to and made a part of that certain
Agreement and Plan of Reorganization dated February 27, 2003 between and among
SOUTHBORROUGH VENTURES, INC. (the "Company"), AMERICHIP VENTURES, INC. ("AVI"),
AMERICHIP, INC. ("Americhip"), and the shareholders of AVI.
AVI's Disclosure Statement.
---------------------------
In accordance with Section 2.1 of the above referenced Agreement, AVI
provides the following disclosures which are arranged in paragraphs
corresponding to the subsections contained in Section 2.1 of the subject
Agreement:
2.1(j) AVI has entered into a License Agreement with Americhip, Inc., pursuant
to which AVI has various obligations. Pursuant to Section 4.1(d), a copy of that
agreement has been provided to the Company.
24
DISCLOSURE STATEMENT
--------------------
THIS DISCLOSURE STATEMENT is attached to and made a part of that certain
Agreement and Plan of Reorganization dated February 27, 2003 between and among
SOUTHBORROUGH VENTURES, INC. (the "Company"), AMERICHIP VENTURES, INC. ("AVI"),
AMERICHIP, INC. ("Americhip"), and the shareholders of AVI.
Company's Disclosure Statement.
-------------------------------
In accordance with Section 2.2 of the above referenced Agreement, the
Company provides the following disclosures which are arranged in paragraphs
corresponding to the subsections contained in Section 2.2 of the subject
Agreement:
1. Subsection 2.2(d). Pursuant to the terms of that certain Option
Agreement dated November 20, 2000 between the Company and Xxxxx X. Xxxxxxxxx,
the Company has an option to acquire the Cedar mineral claim which is located in
the Slocan Mining Division of central British Columbia. To retain its option
rights, the Company must complete a second phase of an exploration program on or
before June 30, 2003 which requires, in addition to the expenditure of funds
(estimated at $10,000), the issuance to Xx. Xxxxxxxxx of 25,000 shares of the
Company's common stock (no antidilution provision exists which would increase
the number of shares to be issued due to the Company's recent share dividend).
Failure to pay the exploration expenses or issue the shares will terminate the
Company's rights under the Option Agreement. If the obligations of the second
exploration phase are satisfied, the Company must then satisfy and complete, on
or before October 31, 2003, a third phase of an exploration program which
requires the expenditure of additional funds (estimated at $120,000) and
issuance of an additional 25,000 shares of the Company's common stock.
2. Subsection 2.2(k): Pursuant to the terms of an Executive Consulting
Agreement dated as of December 1, 2000, the Company engaged Xxxx Xxxxxx as a
consultant and is obligated to pay a consultant fee of $1,000 per month
(increasing to $5,000 per month under certain circumstances) during the term of
the Agreement. By its terms, the Executive Consulting Agreement expired on
November 30, 2002 and has not been extended or renewed.
3. Subsection 2.2(l): The Company filed a Proxy Statement with the SEC
concerning an amendment to its Articles of Incorporation to authorize a class of
50 million shares of preferred stock. In connection with this filing, the SEC
has informed the Company that its proxy filing will receive a full review with
comments pertaining to its disclosures. Due to the change in the terms of the
Reorganization, the Company intends to withdraw its proxy filing.
25
DISCLOSURE STATEMENT
--------------------
THIS DISCLOSURE STATEMENT is attached to and made a part of that certain
Agreement and Plan of Reorganization dated February 27, 2003 between and among
SOUTHBORROUGH VENTURES, INC. (the "Company"), AMERICHIP VENTURES, INC. ("AVI"),
AMERICHIP, INC. ("Americhip"), and the shareholders of AVI.
Americhip's Disclosure Statement.
---------------------------------
In accordance with Section 2.3 of the above referenced Agreement, Americhip
provides the following disclosures which are arranged in paragraphs
corresponding to the subsections contained in Section 2.3 of the subject
Agreement:
NONE
26
