PLAN AND AGREEMENT OF TRIANGULAR MERGER
BETWEEN
MED-X SYSTEMS, INC.,
CRANSTON, INC. (A NEVADA CORPORATION)
AND
CRANSTON, INC. (A NEW YORK CORPORATION)
MED-X SYSTEMS, INC., a Nevada corporation ("Med-X"), EQUITABLE ASSETS,
INC., a Nevada corporation, the controlling stockholder of Med-X (the "Med-X
Controlling Stockholder"), CRANSTON, INC., a Nevada corporation (the
"Subsidiary"), and CRANSTON, INC., a New York corporation ("Cranston"), hereby
agree as follows:
WHEREAS, the Subsidiary is a wholly-owned subsidiary of Med-X; and
WHEREAS, Cranston desires to merge with and into the Subsidiary (the
"Merger"); and
WHEREAS, as a result of the Merger, the stockholders of Cranston (the
"Cranston Stockholders") will receive shares of the common stock of Med-X, no
par value per share (the "Med-X Common Stock") in exchange for all of their
shares of the common stock of Cranston, no par value per share (the "Cranston
Common Stock"); and
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties agree as follows:
1. Plan Adopted. A plan of merger whereby Cranston merges with and
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into the Subsidiary (this "Plan of Merger"), pursuant to the provisions of
Article 9 of the New York Business Corporation Law (the "NYBCL"), Chapter 92A of
the Nevada Revised Statutes (the "NRS"), and Section 368(a)(2)(D) of the
Internal Revenue Code of 1986, as amended, is adopted as follows:
(a) Cranston shall be merged with and into the Subsidiary, to
exist and be governed by the laws of the State of Nevada.
(b) The Subsidiary shall be the surviving corporation (the
"Surviving Corporation") and will continue to be a wholly-owned subsidiary of
Med-X.
(c) When this Plan of Merger shall become effective, the separate
existence of Cranston shall cease and the Surviving Corporation shall succeed,
without other transfer, to all the rights and properties of Cranston and shall
be subject to all the debts and liabilities of such corporation in the same
manner as if the Surviving Corporation had itself incurred them. All rights of
creditors and all liens upon the property of each constituent entity shall be
preserved unimpaired, limited in lien to the property affected by such liens
immediately prior to the Merger.
(d) The Surviving Corporation will be responsible for the payment
of all fees and franchise taxes of the constituent entities payable to the
States of Nevada and New York, if any.
(e) The Surviving Corporation will carry on business with the
assets of Cranston, as well as the assets of the Subsidiary.
(f) The Surviving Corporation will be responsible for the payment
of the fair value of shares, if any, required under Article 9 of the NYBCL or
Chapter 92A of the NRS.
(g) The Cranston Stockholders will surrender all of their shares
of the Cranston Common Stock in the manner hereinafter set forth.
(h) In exchange for the shares of the Cranston Common Stock
surrendered by the Cranston Stockholders, Med-X will issue and transfer to them
on the basis hereinafter set forth, shares of the Med-X Common Stock.
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(i) A copy of this Plan of Merger will be furnished by the
Surviving Corporation, on request and without cost, to any stockholder of any
constituent corporation.
(j) The authorized capital stock of the Subsidiary is 200,000,000
shares of common stock, par value $0.001 per share (the "Subsidiary Common
Stock"), of which one share is issued and outstanding, and 50,000,000 shares of
preferred stock, par value $0.001 per share, of which none are issued or
outstanding.
(k) The authorized capital stock of Cranston is 200 shares of
common stock, no par value per share, of which 200 shares are issued and
outstanding.
2. Effective Date. The effective date of the Merger (the "Effective
---------------
Date") shall be the date of the filing of Articles of Merger and a Certificate
of Merger for the Subsidiary and Cranston in the States of Nevada and New York,
respectively.
3. Submission to Stockholders. This Plan of Merger shall be submitted
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for approval separately to the Cranston Stockholders and the stockholders of the
Subsidiary in the manner provided by the laws of the States of New York and
Nevada.
4. Manner of Exchange. On the Effective Date, the Cranston
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Stockholders shall surrender their stock certificates representing all of the
issued and outstanding shares of the Cranston Common Stock to the Subsidiary in
exchange for certificates representing the shares of the Med-X Common Stock to
which they are entitled. Following the receipt of the shares of the Cranston
Common Stock by the Subsidiary, the shares of the Cranston Common Stock shall be
cancelled. The one share of the Subsidiary Common Stock shall remain issued and
outstanding.
5. Basis of Exchange. The Cranston Stockholders currently own 200
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shares of the Cranston Common Stock, which shares constitute all of the issued
and outstanding shares of the capital stock of Cranston. As a result of the
Merger, the Cranston Stockholders shall be entitled to receive, in exchange for
all of their Cranston Common Stock, 20,000,000 shares of the Med-X Common Stock
on the basis of 100,000 shares of the Med-X Common Stock for each share of the
Cranston Common Stock held by each of the Cranston Stockholders.
6. Restricted Shares. All shares of the Med-X Common Stock to be
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received by the Cranston Stockholders hereunder shall be restricted in their
resale as provided in the Securities Act of 1933, as amended (the "Securities
Act"), and shall contain a legend as required by the Securities Act, which shall
read as follows:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A REGISTRATION STATEMENT WITH
RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.
7. Directors and Officers of the Surviving Corporation.
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(a) Following the Merger, the present Board of Directors of
Cranston shall serve as the Board of Directors of the Surviving Corporation
until the next annual meeting or until such time as their successors have been
elected and qualified.
(b) If a vacancy shall exist on the Board of Directors of the
Surviving Corporation on the Effective Date, such vacancy may be filled by the
Board of Directors of the Surviving Corporation as provided in the Bylaws of the
Surviving Corporation.
(c) All persons who, on the Effective Date, are executive or
administrative officers of Cranston shall be the officers of the Surviving
Corporation until the Board of Directors of the Surviving Corporation
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shall otherwise determine. The Board of Directors of the Surviving Corporation
may elect or appoint such additional officers as it may deem necessary or
appropriate.
8. Articles of Incorporation. The Articles of Incorporation of the
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Subsidiary existing on the Effective Date, a copy of which is attached hereto as
Attachment A shall continue in full force as the Articles of Incorporation of
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the Surviving Corporation until altered, amended, or repealed as provided
therein or as provided by law.
9. Bylaws. The Bylaws of the Subsidiary existing on the Effective
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Date, a copy of which is attached hereto as Attachment B shall continue in full
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force as the Bylaws of the Surviving Corporation until altered, amended, or
repealed as provided therein or as provided by law.
10. Directors and Officers of Med-X. On the Effective Date, persons
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selected by Cranston will be elected to the Board of Directors of Med-X, and
immediately thereafter, all of the members of the Med-X Board of Directors
serving before the Effective Date shall resign. Further, on the Effective Date,
the Board of Directors will elect a person selected by Cranston as President of
Med-X, and all of the other officers of Med-X other than such person selected by
Cranston shall resign on the Effective Date.
11. Copies of the Plan of Merger. A copy of this Plan of Merger is on
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file at ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the
principal offices of Cranston, and at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, the principal offices of Med-X and the Subsidiary. A copy of this Plan
of Merger will be furnished to any stockholder of Cranston, Med-X, or the
Subsidiary, on written request and without cost.
12. Additional Consideration for the Merger. As additional
-------------------------------------------
consideration for the Merger and the services rendered hereunder by the Med-X
Controlling Stockholder, Cranston shall deliver to the Med-X Controlling
Stockholder the sum of $80,000 (the "Cash Consideration"). The Cash
Consideration shall be placed in escrow pursuant to the Escrow Agreement
described in Attachment C attached hereto (the "Escrow Agreement"), and held in
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escrow until the shares of the Med-X Common Stock are trading on the OTCBB as
described hereinafter.
13. Lock-Up of Shares of the Med-X Common Stock. At the Effective
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Date, the 4,188,646 shares of the Med-X Common Stock owned by the Med-X
Controlling Stockholder shall be placed in the Escrow Agreement and subject to
the "lock-up" as therein provided.
14. Trading on the OTCBB. Promptly following the Effective Date, the
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Med-X Controlling Stockholder will use its best efforts to do all things
necessary to qualify the shares of the Med-X Common Stock for quotation and sale
on the Over the Counter Bulletin Board maintained by the Nasdaq Stock Market,
Inc. (the "OTCBB").
15. Representations and Warranties of Cranston. Where a representation
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contained in this Agreement is qualified by the phrase "to the best knowledge of
Cranston" (or words of similar import), such expression means that, after having
conducted a due diligence review, Cranston believes the statement to be true,
accurate, and complete in all material respects. Knowledge shall not be imputed
nor shall it include any matters which such person should have known or should
have been reasonably expected to have known. Cranston represents and warrants
to Med-X, the Subsidiary, and the Med-X Controlling Stockholder as follows:
(a) Power and Authority. Cranston has full power and authority to
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execute, deliver, and perform this Agreement and all other agreements,
certificates or documents to be delivered in connection herewith, including,
without limitation, the other agreements, certificates and documents
contemplated hereby (collectively the "Other Agreements").
(b) Binding Effect. Upon execution and delivery by Cranston, this
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Agreement and the Other Agreements shall be and constitute the valid, binding
and legal obligations of Cranston, enforceable against Cranston in accordance
with the terms hereof and thereof, except as the enforceability hereof or
thereof may be subject to the effect of (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or affecting
creditors' rights generally, and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
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(c) Effect. Neither the execution and delivery of this Agreement
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or the Other Agreements nor full performance by Cranston of its obligations
hereunder or thereunder will violate or breach, or otherwise constitute or give
rise to a default under, the terms or provisions of the Articles of
Incorporation or Bylaws of Cranston or, subject to obtaining any and all
necessary consents, of any contract, commitment or other obligation of Cranston
or necessary for the operation of Cranston's business (the "Business") following
the Merger or any other material contract, commitment, or other obligations to
which Cranston is a party, or create or result in the creation of any
encumbrance on any of the property of Cranston.
(d) No Consents. No consent, approval or authorization of, or
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registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Effective Date, be obtained or made by Cranston prior to the
Effective Date to authorize the execution, delivery and performance by Cranston
of this Agreement or the Other Agreements.
(e) Capitalization. Cranston is authorized by its Articles of
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Incorporation to issue 200 shares of the Cranston Common Stock. As of the date
of this Agreement, there are 200 shares of the Cranston Common Stock duly and
validly issued and outstanding, fully paid, and non-assessable. Other than as
disclosed herein, there are no outstanding options, contracts, commitments,
warrants, preemptive rights, agreements or any rights of any character affecting
or relating in any manner to the issuance of the Cranston Common Stock or other
securities or entitling anyone to acquire the Cranston Common Stock or other
securities of Cranston.
(f) Stock Ownership. The Cranston Stockholders have good,
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absolute, and marketable title to 200 shares of the Cranston Common Stock as
described herein, which constitute 100 percent of the issued and outstanding
shares of the Cranston Common Stock. Cranston has the complete and unrestricted
right, power and authority to cause the Merger pursuant to this Agreement. The
delivery of the Cranston Common Stock to the Subsidiary as herein contemplated
will vest in the Subsidiary good, absolute and marketable title to the shares of
the Cranston Common Stock as described herein, free and clear of all liens,
claims, encumbrances, and restrictions of every kind, except those restrictions
imposed by applicable securities laws or this Agreement.
(g) Restrictions on Shares. The shares of the Med-X Common Stock
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to be exchanged in connection with the Merger on the Effective Date will carry a
restrictive legend under the Securities Act. All of the Cranston Stockholders
shall execute and deliver to Med-X on the Effective Date the Subscription
Agreement in the form described in Attachment D attached hereto.
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(h) Organization and Standing of Cranston. Cranston is a duly
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organized and validly existing New York corporation in good standing, with all
requisite corporate power and authority to carry on the Business as presently
conducted. Cranston has not qualified to do business in any other state.
(i) Litigation. Cranston has no litigation, arbitrations, claims,
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governmental or other proceedings (formal or informal), or investigations
pending, threatened, or in prospect (or any basis therefor known to Cranston)
with respect to Cranston, or any of its business, properties, or assets prior to
the execution of this Agreement. Cranston is not affected by any present or
threatened strike or other labor disturbance or, to the best knowledge of
Cranston, is any union attempting to represent any employee of Cranston as
collective bargaining agent. Cranston is not in violation of, or in default
with respect to, any law, rule, regulation, order, judgment, or decree; nor is
Cranston required to take any action in order to avoid such a violation or
default.
(j) Compliance with Laws and Regulations. To the best knowledge
--------------------------------------
of Cranston, Cranston is in material compliance, with all laws, ordinances,
codes, restrictions, regulations and other legal requirements applicable to the
conduct of the Business, the noncompliance with which would be likely to have a
material adverse effect on the Business; and there are no lawsuits or
proceedings pending or, to its knowledge, threatened with respect to the
foregoing.
(k) No Defaults. To the best knowledge of Cranston, Cranston is
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not in default under any provision, of any lease, contract, commitment,
obligation, note, bond, debenture, mortgage, indenture, security agreement,
guaranty, or other instrument of indebtedness, and no existing condition exists
which, with the giving of
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notice or the passage of time, or both, would constitute such a default, in
either case, which default is or would be likely to have a material adverse
effect on the Business.
(l) Compliance with Law and Other Instruments. The business and
-------------------------------------------
operations of Cranston have been and are being conducted in accordance with all
applicable laws, rules and regulations of all authorities, except those which do
not (either individually or in the aggregate) materially and adversely affect
Cranston.
(m) Authority to Merge. Cranston has all requisite power and
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authority to execute, deliver, and perform this Agreement. All necessary
corporate proceedings of Cranston have been duly taken to authorize the
execution, delivery, and performance of this Agreement by Cranston. This
Agreement has been duly authorized, executed and delivered by Cranston and the
Cranston Stockholders; is the legal, valid, and binding obligation of Cranston;
and is enforceable as to it in accordance with its terms subject to any laws
relating to bankruptcy or any other similar laws.
No consent, authorization, approval, order, license, certificate, or permit
of or from, or declaration of filing with, any federal, state, local, or other
governmental authority or any court or other tribunal is required by Cranston
for the execution, delivery, or performance of this Agreement by Cranston. No
consent of any party to any contract, agreement, instrument, lease, license,
arrangement, or understanding to which Cranston is a party, or to which any of
its properties or assets are subject, is required for the execution, delivery or
performance of this Agreement; and the execution, delivery, and performance of
this Agreement will not violate, result in a breach of, conflict with, or (with
or without the giving of notice or the passage of time or both) entitle any
party to terminate or call a default under any contract, agreement, instrument,
lease, license, arrangement, or understanding, or violate or result in a breach
of any term of the articles of incorporation (or other charter document) or
bylaws of Cranston or violate, result in a breach of, or conflict with any law,
rule, regulation, order, judgment, or decree binding on Cranston or to which any
of its operations, business, properties, or assets are subject.
(n) Records. The books of account and minute books of Cranston
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are complete and correct, and reflect all those transactions involving its
business which properly should have been set forth in such books.
(o) Representations and Warranties True and Complete. All
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representations and warranties of Cranston in this Agreement and the Other
Agreements are true, accurate and complete in all material respects as of the
Effective Date.
(p) No Knowledge of Default. Cranston has no knowledge that any
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representations and warranties of Med-X, the Subsidiary, and the Med-X
Controlling Stockholder contained in this Agreement or the Other Agreements are
untrue, inaccurate or incomplete or that Med-X, the Subsidiary, or the Med-X
Controller Stockholders is in default under any term or provision of this
Agreement or the Other Agreements.
(q) No Untrue Statements. No representation or warranty by
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Cranston in this Agreement or in any writing furnished or to be furnished
pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits, or will omit to state any material fact required to make the
statements herein or therein contained not misleading.
(r) Reliance. The foregoing representations and warranties are
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made by Cranston with the knowledge and expectation that Med-X, the Subsidiary,
and the Med-X Controlling Stockholder are placing complete reliance thereon.
16. Representations and Warranties of Med-X, the Subsidiary, and the
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Med-X Controlling Stockholder. Where a representation contained in this
-----------------------------
Agreement is qualified by the phrase "to the best knowledge of Med-X, the
Subsidiary, and the Med-X Controlling Stockholder" (or words of similar import),
such expression means that, after having conducted a due diligence review,
Med-X, the Subsidiary, and the Med-X Controlling Stockholder believe the
statement to be true, accurate, and complete in all material respects.
Knowledge shall not be imputed nor shall it include any matters which such
person should have known or should have been reasonably expected to have known.
Med-X, the Subsidiary, and the Med-X Controlling Stockholder hereby represent
and warrant to Cranston as follows:
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(a) Power and Authority. Med-X, the Subsidiary, and the Med-X
---------------------
Controlling Stockholder have full power and authority to execute, deliver and
perform this Agreement and the Other Agreements.
(b) Authorization. The execution, delivery and performance of
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this Agreement and the Other Agreements by Med-X and the Subsidiary have been
duly authorized by all requisite corporate action.
(c) Binding Effect. Upon execution and delivery by Med-X, the
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Subsidiary, and the Med-X Controlling Stockholder, this Agreement and the Other
Agreements shall be and constitute the valid, binding and legal obligations of
Med-X, the Subsidiary, and the Med-X Controlling Stockholder enforceable against
them in accordance with the terms hereof or thereof, except as the
enforceability hereof and thereof may be subject to the effect of (i) any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditors' rights generally, and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) Effect. Neither the execution and delivery of this Agreement
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or the Other Agreements nor full performance by Med-X, the Subsidiary, and the
Med-X Controlling Stockholder of their obligations hereunder or thereunder will
violate or breach, or otherwise constitute or give rise to a default under, the
terms or provisions of the Articles of Incorporation or Bylaws of Med-X or the
Subsidiary or, subject to obtaining any and all necessary consents, of any
contract, commitment or other obligation of Med-X or the Subsidiary or necessary
for the operation of the business of Med-X or the Subsidiary following the
Effective Date or any other material contract, commitment, or other obligation
to which Med-X or the Subsidiary is a party, or create or result in the creation
of any encumbrance on any of the assets of Med-X or the Subsidiary.
(e) No Consents. No consent, approval or authorization of, or
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registration, declaration or filing with any third party, including, but not
limited to, any governmental department, agency, commission or other
instrumentality, will, except such consents, if any, delivered or obtained on or
prior to the Effective Date, be obtained or made by Med-X, the Subsidiary, and
the Med-X Controlling Stockholder prior to the Effective Date to authorize the
execution, delivery and performance by Med-X, the Subsidiary, and the Med-X
Controlling Stockholder of this Agreement or the Other Agreements.
(f) No Disputes with Auditors. As of the date of this Agreement,
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neither Med-X nor the Subsidiary has had any disputes with its auditors.
(g) Tax Returns and Audits. As of the date of this Agreement,
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Med-X and the Subsidiary have duly filed all federal, state, and local tax
returns as required to be filed by them (including, but not limited to, all
payroll or other employment related tax returns), and have paid all federal,
state and local taxes, including, but not limited to all payroll and employment
taxes, required to be paid with respect to the periods covered by such returns.
Med-X and the Subsidiary have not been delinquent in the payment of any tax,
assessment, or governmental charge, and have not had any tax deficiencies
proposed or assessed against them and have not executed any waiver of the
statute of limitations on the assessment or collection of any tax. Med-X has
delivered to Cranston all tax returns of Med-X and the Subsidiary for the last
five years.
(h) Exchange Act Status. Med-X is a fully reporting company under
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the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the
Med-X Common Stock is registered under Section 12(g) of the Exchange Act.
However, the Med-X Common Stock is not currently traded in any public market.
At the Effective Date, Med-X shall be current in all filings required by the
Exchange Act (the "SEC Filings"). Med-X has delivered to Cranston signed copies
of all of the SEC Filings for the last seven years.
(i) Organization and Standing of Med-X. Med-X is a duly organized
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and validly existing Nevada corporation in good standing, with all requisite
corporate power and authority to carry on its business as presently conducted.
Med-X has not qualified to do business in any other state.
(j) Subsidiaries. Med-X has only one subsidiary, namely, the
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Subsidiary, which is a duly organized and validly existing Nevada corporation in
good standing, with all requisite corporate power and authority to carry on its
business as presently conducted. The Subsidiary has not qualified to do
business in any other state.
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(k) Capitalization of Med-X. Med-X is authorized by its Articles of
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Incorporation to issue 200,000,000 shares of the Med-X Common Stock, 24,309,646
shares of which will be duly and validly issued and outstanding, fully paid, and
non-assessable as of the Effective Date, and 50,000,000 shares of preferred
stock, no par value per share, none of which are issued or outstanding. Other
than as disclosed herein, there are no outstanding options, contracts,
commitments, warrants, preemptive rights, agreements or any rights of any
character affecting or relating in any manner to the issuance of the Med-X
Common Stock or other securities or entitling anyone to acquire the Med-X Common
Stock or other securities of Med-X. The shares of the Med-X Common Stock to be
issued and outstanding as of the Effective Date shall include shares of the
Med-X Common Stock to be issued before the Effective Date in exchange for all of
the convertible debt owed by Med-X as of the Effective Date, at the exchange
rate of four hundred (400) shares of Common Stock for every one dollar ($1.00)
of debt. Upon such exchange, the indebtedness evidenced by such convertible debt
shall be deemed to have been paid in full.
(l) Capitalization of the Subsidiary. The Subsidiary is
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authorized by its Articles of Incorporation to issue 200,000,000 shares of the
Subsidiary Common Stock, one share of which will be duly and validly issued and
outstanding, fully paid, and non-assessable as of the Effective Date, and
50,000,000 shares of preferred stock, par value $0.001 per share, none of which
are issued or outstanding. Other than as disclosed herein, there are no
outstanding options, contracts, commitments, warrants, preemptive rights,
agreements or any rights of any character affecting or relating in any manner to
the issuance of the Subsidiary Common Stock or other securities or entitling
anyone to acquire the Subsidiary Common Stock or other securities of the
Subsidiary.
(m) Effect of the Transaction. Following the Effective Date and
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all of the transactions described herein, the Cranston Stockholders will own
20,000,000 shares of the Med-X Common Stock, which will represent approximately
82.3 percent of the issued and outstanding shares of the Med-X Common Stock.
(n) No Debts. Med-X and the Subsidiary will have immediately
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after the Effective Date no outstanding debt or obligations whatsoever,
including, but not limited to, any income, real or personal property taxes. At
the Effective Date, Med-X, the Subsidiary, and the Med-X Controlling Stockholder
shall deliver to Cranston all legal and accounting statements rendered to Med-X
and the Subsidiary marked "paid."
(o) No Assets. Med-X and the Subsidiary will have no assets at
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the Effective Date.
(p) No Litigation. Med-X and the Subsidiary are not now and will
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not be at the Effective Date subject to any pending or threatened litigation,
claims or lawsuits from any party.
(q) No Contracts. Other than as disclosed herein, Med-X and the
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Subsidiary are not a party to any contract, lease or agreement which would
subject them to any performance or business obligations after the Effective
Date.
(r) No Employees. Med-X and the Subsidiary do not now have and
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will not have at the Effective Date any employees.
(s) No Employment Contracts. Med-X and the Subsidiary have no
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employment contracts or agreements with any of its officers, directors, or with
any consultants, employees or other parties.
(t) No Benefit Plans. Med-X and the Subsidiary have no insurance
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or employee benefit plans whatsoever.
(u) No Powers of Attorney. Med-X and the Subsidiary have no
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outstanding powers or attorney and no obligations concerning its performance
hereunder.
(v) Compliance. The Med-X Controlling Stockholder shall cause
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Med-X and the Subsidiary and their officers and employees to comply with all
applicable provisions of this Agreement.
(w) Representations and Warranties of True and Complete. All
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representations and warranties of Med-X, the Subsidiary, and the Med-X
Controlling Stockholder in this Agreement and the Other Agreements are true,
accurate and complete in all material respects as of the Effective Date.
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(x) No Knowledge of Default. Med-X, the Subsidiary, and the Med-X
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Controlling Stockholder have no knowledge that any of the representations and
warranties of Cranston contained in this Agreement or the Other Agreements are
untrue, inaccurate or incomplete in any respect or that Cranston is in default
under any term or provision of this Agreement or the Other Agreements.
(y) No Untrue Statements. No representation or warranty by Med-X,
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the Subsidiary, and the Med-X Controlling Stockholder in this Agreement or in
any writing furnished or to be furnished pursuant hereto, contains or will
contain any untrue statement of a material fact, or omits, or will omit to state
any material fact required to make the statements herein or therein contained
not misleading.
(z) Reliance. The foregoing representations and warranties are
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made by Med-X, the Subsidiary, and the Med-X Controlling Stockholder with the
knowledge and expectation that Cranston is placing complete reliance thereon.
17. Conditions Precedent to Obligations of Med-X and the Subsidiary.
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All obligations of Med-X, the Subsidiary, and the Med-X Controlling Stockholder
under this Agreement are subject to the fulfillment, prior to or at the
Effective Date, of the following conditions:
(a) Representations and Warranties True at the Effective Date.
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The representations and warranties of Cranston herein shall be deemed to have
been made again as of the Effective Date, and then be true and correct, subject
to any changes contemplated by this Agreement. Cranston shall have performed
all of the obligations to be performed by it hereunder on or prior to the
Effective Date.
(b) Proof of Authority. The counsel for Med-X shall have received
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evidence reasonably sufficient to such counsel that Cranston has all requisite
authorizations necessary for consummation by Cranston of the transactions
contemplated hereby, and there has not been issued, and there is not in effect,
any injunction or similar legal order prohibiting or restraining consummation of
any of the transactions herein contemplated, and no legal or governmental
action, proceeding or investigation which might reasonably be expected to result
in any such injunction or order is pending.
(c) No Orders. There has not been issued, and there is not in
----------
effect, any injunction or similar legal order prohibiting or restraining
consummation of any of the transactions herein contemplated, and no legal or
governmental action, proceeding or investigation which might reasonably be
expected to result in any such injunction or order is pending.
(d) Deliveries at the Effective Date. Cranston shall have
------------------------------------
delivered to Med-X, the Subsidiary, and the Med-X Controlling Stockholder at the
Effective Date all of the documents required to be delivered hereunder.
(e) Certificates of Good Standing. Cranston shall have delivered
------------------------------
to Med-X certificates or telegrams issued by appropriate governmental
authorities evidencing the good standing of Cranston as of a date not more than
10 days prior to the Effective Date, in the State of New York.
(f) Resolutions. The counsel for Med-X shall have received
-----------
certified resolutions of a meeting of the Board of Directors of Cranston and the
Cranston Stockholders pursuant to which this Agreement and the transactions
contemplated hereby were duly and validly approved, adopted and ratified by the
Board of Directors of Cranston and the Cranston Stockholders, all in form and
content satisfactory to such counsel, authorizing (i) the execution, delivery
and performance of this Agreement, (ii) such other documents and instruments as
shall be necessary to consummate the transactions contemplated hereby and
thereby, and (iii) all actions to be taken by Cranston hereunder.
(g) Certification. Cranston shall have delivered to Med-X at the
-------------
Effective Date a certificate dated as of the Effective Date, executed by
Cranston, certifying that the conditions specified in this Paragraph 17 have
been fulfilled.
8
(h) Other Matters. All corporate and other proceedings and
--------------
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to Med-X, the Subsidiary, and the Med-X Controlling Stockholder and their
counsel, whose approval shall not be unreasonably withheld.
18. Conditions Precedent to Obligations of Cranston. All obligations
-------------------------------------------------
of Cranston under this Agreement are subject to the fulfillment, prior to or at
the Effective Date, of the following conditions:
(a) Representations and Warranties True at Effective Date. The
--------------------------------------------------------
representations and warranties of Med-X, the Subsidiary, and the Med-X
Controlling Stockholder herein shall be deemed to have been made again at the
Effective Date, and then be true and correct, subject to any changes
contemplated by this Agreement. Med-X, the Subsidiary, and the Med-X
Controlling Stockholder shall have performed all of the obligations to be
performed by Med-X, the Subsidiary, and the Med-X Controlling Stockholder
hereunder on or prior to the Effective Date.
(b) Proof of Authority. The counsel for Cranston shall have
--------------------
received evidence reasonably sufficient to such counsel that Med-X, the
Subsidiary, and the Med-X Controlling Stockholder have all requisite
authorizations necessary for consummation by Med-X, the Subsidiary, and the
Med-X Controlling Stockholder of the transactions contemplated hereby, and there
has not been issued, and there is not in effect, any injunction or similar legal
order prohibiting or restraining consummation of any of the transactions herein
contemplated, and no legal or governmental action, proceeding or investigation
that might reasonably be expected to result in any such injunction or order is
pending.
(c) SEC Filings. Med-X shall be current in all of the SEC Filings
-----------
as of the Effective Date. In addition, signed copies of all of the SEC Filings
shall have been delivered to Cranston before the Effective Date as required
hereunder.
(d) No Disputes with Auditors. As of the Effective Date, neither
--------------------------
Med-X nor the Subsidiary shall have had any disputes with its auditors.
(e) Proof of Election of and Resignations. On the Effective Date,
-------------------------------------
Med-X and the Med-X Controlling Stockholder shall deliver proof of the election
of the persons selected by Cranston to the Board of Directors of Med-X and as
President of Med-X, as well as the resignations of all of those persons who were
the officers and directors of Med-X before the Effective Date and following the
election of the persons selected by Cranston as described herein.
(f) Opinion of Counsel. Med-X, the Subsidiary, and the Med-X
--------------------
Controlling Stockholder shall have delivered at the Effective Date to Cranston
an opinion of their counsel dated as of date of the Effective Date in form and
substance satisfactory to Cranston and its counsel, to the effect that (i) each
of Med-X and the Subsidiary is a duly and validly organized and existing
corporation in good standing under the laws of the state of its organization,
with full corporate power to carry on the business in which it is engaged; (ii)
the performance of this Agreement and the consummation of the transactions
contemplated herein will not result in any breach or violation of any terms or
provisions of or cause a default under the Articles of Incorporation, as
amended, or Bylaws, as amended, of Med-X or the Subsidiary or to said counsel's
knowledge and belief, any order, rule, or regulation of any court, governmental
agency or body having jurisdiction over Med-X or the Subsidiary or any of their
activities, properties, any statute, indenture, mortgage, deed of trust, lease,
loan agreement, security agreement, or other agreement or instrument known to
said counsel, to which they are a party or by which they are bound or to which
any of their property is subject; and (iii) no provision of the Articles of
Incorporation, as amended, Bylaws, as amended, minutes or share certificates of
Med-X or the Subsidiary or, to their said counsel's knowledge and belief, any
contract to which either Med-X or the Subsidiary is a party or otherwise bound
or affected, prevents Med-X, the Subsidiary, and the Med-X Controlling
Stockholder from performing their obligations as contemplated by this Agreement.
(g) No Orders. There has not been issued, and there is not in
----------
effect, any injunction or similar legal order prohibiting or restraining
consummation of any of the transactions herein contemplated, and no legal or
9
governmental action, proceeding or investigation which might reasonably be
expected to result in any such injunction or order is pending.
(h) Deliveries at the Effective Date. Med-X, the Subsidiary, and
---------------------------------
the Med-X Controlling Stockholder shall have delivered to Cranston at the
Effective Date all of the documents required to be delivered hereunder.
(i) Certificates of Good Standing. Med-X, the Subsidiary, and the
-----------------------------
Med-X Controlling Stockholder shall have delivered to Cranston certificates or
telegrams issued by appropriate governmental authorities evidencing the good
standing of Med-X and the Subsidiary as of a date not more than 10 days prior to
the Effective Date, in the States of New York and Nevada, respectively.
(j) Resolutions. The counsel for Cranston shall have received
-----------
certified resolutions of a meeting of the Board of Directors of Med-X and the
Subsidiary and the stockholder of the Subsidiary pursuant to which this
Agreement and the transactions contemplated hereby were duly and validly
approved, adopted and ratified by the Board of Directors of Med-X and the
Subsidiary and the stockholder of the Subsidiary, all in form and content
satisfactory to such counsel, authorizing (i) the execution, delivery and
performance of this Agreement, (ii) such other documents and instruments as
shall be necessary to consummate the transactions contemplated hereby and
thereby, and (iii) all actions to be taken by Med-X, the Subsidiary, and the
Med-X Controlling Stockholder hereunder.
(k) Certification. Med-X, the Subsidiary, and the Med-X
-------------
Controlling Stockholder shall have delivered to Cranston at the Effective Date a
certificate dated as of the Effective Date, executed by Med-X, the Subsidiary,
and the Med-X Controlling Stockholder, certifying that the conditions specified
in this Paragraph 18 have been fulfilled.
(l) Other Matters. All corporate and other proceedings and
--------------
actions taken in connection with the transactions contemplated hereby and all
certificates, opinions, agreements, instruments and documents mentioned herein
or incident to any such transaction shall be satisfactory in form and substance
to Cranston and its counsel, whose approval shall not be unreasonably withheld.
19. The Nature and Survival of Representations, Covenants and
----------------------------------------------------------------
Warranties. All statements and facts contained in any memorandum, certificate,
instrument, or other document delivered by or on behalf of the parties hereto
for information or reliance pursuant to this Agreement, shall be deemed
representations, covenants and warranties by the parties hereto under this
Agreement. All representations, covenants and warranties of the parties shall
survive the Effective Date and all inspections, examinations, or audits on
behalf of the parties, shall expire 18 months after the Effective Date.
20. Indemnification by the Med-X Controlling Stockholder. The Med-X
-------------------------------------------------------
Controlling Stockholder agrees to indemnify and hold harmless Med-X, Cranston,
and the Cranston Stockholders against and in respect to all damages (as
hereinafter defined) up to $100,000. Damages, as used herein shall include any
claim, salary, wage, action, tax, demand, loss, cost, expense, liability (joint
or several), penalty, and other damage, including, without limitation, counsel
fees and other costs and expenses reasonably incurred in investigating or
attempting to avoid same or in opposition to the imposition thereof, or in
enforcing this indemnity, resulting to Med-X, Cranston, or the Cranston
Stockholders from any inaccurate representation made by or on behalf of the
Med-X Controlling Stockholder in or pursuant to this Agreement, breach of any of
the warranties made by or on behalf of the Med-X Controlling Stockholder in or
pursuant to this Agreement, or breach or default in the performance by the Med-X
Controlling Stockholder of any of the obligations to be performed by them
hereunder.
The Med-X Controlling Stockholder shall reimburse and/or pay on behalf of
Med-X, Cranston, or the Cranston Stockholders on demand for any payment made or
required to be made by Med-X, Cranston, or the Cranston Stockholders at any time
after the Effective Date based upon the judgment of any court of competent
jurisdiction or pursuant to a bona fide compromise or settlement of claims,
demands or actions, in respect to the damages to which the foregoing indemnity
relates. Med-X, Cranston, or the Cranston Stockholders shall give the Med-X
Controlling Stockholder written notice within 30 days after notification of any
litigation threatened or instituted which might constitute the basis of a claim
for indemnity by Med-X, Cranston, or the Cranston
10
Stockholders against the Med-X Controlling Stockholder. In the event that the
Med-X Controlling Stockholder fails to reimburse and/or pay on behalf of Med-X,
Cranston, or the Cranston Stockholders any amount which Med-X, Cranston, or the
Cranston Stockholders is entitled to indemnification hereunder while the Cash
Consideration remains in escrow subject to the Escrow Agreement, in addition to
any other remedies either at law or in equity that may be then available to
Med-X, Cranston, or the Cranston Stockholders, Med-X, Cranston, or the Cranston
Stockholders shall be entitled, at their option, to offset against the Cash
Consideration any amounts paid by Med-X, Cranston, or the Cranston Stockholders,
and the Med-X Controlling Stockholder do hereby authorize the Escrow Agent in
the Escrow Agreement, without any further action on the part of any party, to
release all or a portion of the Cash Consideration to the Cranston Stockholders
as may be necessary to satisfy the indemnification obligation described herein.
After the utilization of all of such offset, if Med-X, Cranston, or the Cranston
Stockholders is still entitled to indemnity from the Med-X Controlling
Stockholder hereunder, the Med-X Controlling Stockholder does hereby authorize
the Escrow Agent in the Escrow Agreement, without any further action on the part
of any party, to release all or a portion of the escrowed shares of the Med-X
Common Stock described in the Escrow Agreement to the Cranston Stockholders as
may be necessary to satisfy the indemnification obligation described herein.
After the utilization of all of such offset of the Cash Consideration and the
escrowed shares of the Med-X Common Stock described in the Escrow Agreement, if
Med-X, Cranston, or the Cranston Stockholders is still entitled to indemnity
from the Med-X Controlling Stockholder hereunder, the Med-X Controlling
Stockholder shall reimburse and/or pay Med-X, Cranston, or the Cranston
Stockholders on demand the balance of any amount of such indemnity to which they
are entitled hereunder.
Notwithstanding anything contained in this Agreement to the contrary, the
right to indemnification described in this paragraph shall expire 18 months
after the Effective Date.
21. Records of Med-X and the Subsidiary. For a period of five years
--------------------------------------
following the Effective Date, the books of account and records of Med-X and the
Subsidiary pertaining to all periods prior to the Effective Date shall be
available for inspection by the Med-X Controlling Stockholder for use in
connection with tax audits.
22. Cooperation. The parties hereto will each cooperate with the
-----------
other, at the other's request and expense, in furnishing information, testimony,
and other assistance in connection with any actions, proceedings, arrangements,
disputes with other persons or governmental inquiries or investigations
involving the parties hereto or the transactions contemplated hereby.
23. Further Conveyances and Assurances. After the Effective Date, each
----------------------------------
of the parties hereto will, without further cost or expense to, or consideration
of any nature from any other party hereto, execute and deliver, or cause to be
executed and delivered, to the other parties, such additional documentation and
instruments of transfer and conveyance, and will take such other and further
actions, as the other parties may reasonably request as more completely to
consummate the transactions contemplated hereby.
24. Effective Date. The Effective Date of the Merger contemplated
---------------
hereunder shall be on or before August 29, 2007, subject to acceleration or
postponement from time to time as the parties hereto may mutually agree. The
closing of the Merger shall be at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
at 2:00 p.m. central time on the Effective Date, unless another hour or place is
mutually agreed upon by the parties hereto, at which time Articles of Merger for
the Subsidiary and Cranston shall be filed with the State of Nevada and the
State of New York as described herein
25. Deliveries on the Effective Date by Cranston. Following the filing
--------------------------------------------
of Articles of Merger and a Certificate of Merger for the Subsidiary and
Cranston as described herein, on the Effective Date, Cranston shall deliver all
documents and certifications required to be delivered hereunder.
All documents reflecting any actions taken, received or delivered pursuant
to this Paragraph 25 shall be reasonably satisfactory in form and substance to
Med-X, the Subsidiary, and the Med-X Controlling Stockholder and their counsel.
26. Deliveries on the Effective Date by Med-X, the Subsidiary, and the
-------------------------------------------------------------------
Med-X Controlling Stockholder. Following the filing of Articles of Merger and a
-----------------------------
Certificate of Merger for the Subsidiary and Cranston
11
as described herein, on the Effective Date, Med-X, the Subsidiary, and the Med-X
Controlling Stockholder shall deliver shall deliver all documents and
certifications required to be delivered hereunder.
All documents reflecting any actions taken, received or delivered pursuant
to this Paragraph 26 shall be reasonably satisfactory in form and substance to
Cranston and its counsel.
27. No Assignment. This Agreement shall not be assignable by any party
-------------
without the prior written consent of the other parties, which consent shall be
subject to such party's sole, absolute and unfettered discretion.
28. Brokerage. The parties hereto agree to indemnify and hold harmless
---------
each other against, and in respect of, any claim for brokerage or other
commissions relative to this Agreement, or the transactions contemplated hereby,
based in any way on agreements, arrangements, understandings or contracts made
by either party with a third party or parties whatsoever.
29. Mediation and Arbitration. All disputes arising or related to this
-------------------------
Agreement must exclusively be resolved first by mediation with a mediator
selected by the parties, with such mediation to be held in New York, New York.
If such mediation fails, then any such dispute shall be resolved by binding
arbitration under the Commercial Arbitration Rules of the American Arbitration
Association in effect at the time the arbitration proceeding commences, except
that (a) New York law and the Federal Arbitration Act must govern construction
and effect, (b) the locale of any arbitration must be in New York, New York, and
(c) the arbitrator must with the award provide written findings of fact and
conclusions of law. Any party may seek from a court of competent jurisdiction
any provisional remedy that may be necessary to protect its rights or assets
pending the selection of the arbitrator or the arbitrator's determination of the
merits of the controversy. The exercise of such arbitration rights by any party
will not preclude the exercise of any self-help remedies (including without
limitation, setoff rights) or the exercise of any non-judicial foreclosure
rights. An arbitration award may be entered in any court having jurisdiction.
30. Attorneys' Fees. In the event that it should become necessary for
----------------
any party entitled hereunder to bring suit against any other party to this
Agreement for a breach of this Agreement, the parties hereby covenant and agree
that the party who is found to be in breach of this Agreement shall also be
liable for all reasonable attorneys' fees and costs of court incurred by the
other parties. Provided, however, in the event that there has been no breach of
this Agreement, whether or not the transactions contemplated hereby are
consummated, each party shall bear its own costs and expenses (including any
fees or disbursements of its counsel, accountants, brokers, investment bankers,
and finder's fees).
31. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
32. Notices. All notices, requests, demands, and other communications
-------
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, or
by telecopy or e-mail, if to Med-X, the Med-X Controlling Stockholder, and the
Subsidiary, addressed to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopier (▇▇▇) ▇▇▇-▇▇▇▇, and
e-mail ▇▇▇@▇-▇▇▇▇.▇▇▇; and if to Cranston, addressed to ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telephone (▇▇▇) ▇▇▇-▇▇▇▇,
and email ▇▇▇▇@▇▇▇▇▇.▇▇▇. Any party hereto may change its address upon 10 days'
written notice to any other party hereto.
33. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise.
34. Waiver. No course of dealing on the part of any party hereto or
------
its agents, or any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Agreement or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
12
35. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
36. Invalidity. In the event any one or more of the provisions
----------
contained in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
37. Headings. The headings used in this Agreement are for convenience
--------
and reference only and in no way define, limit, amplify or describe the scope or
intent of this Agreement, and do not affect or constitute a part of this
Agreement.
38. Excusable Delay. The parties shall not be obligated to perform and
---------------
shall not be deemed to be in default hereunder, if the performance of a
non-monetary obligation required hereunder is prevented by the occurrence of any
of the following, other than as the result of the financial inability of the
party obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, war or war-like action (whether actual,
impending or expected and whether de jure or de facto), acts of terrorists,
arrest or other restraint of government (civil or military), blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or
seizure by any government or public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein enumerated
or otherwise, that are not reasonably within the control of the party claiming
the right to delay performance on account of such occurrence.
39. No Third-Party Beneficiary. Any agreement to pay an amount and any
--------------------------
assumption of liability contained in this Agreement, express or implied, shall
be only for the benefit of the undersigned parties and their respective
successors and assigns (as herein expressly permitted), and such agreements and
assumptions shall not inure to the benefit of the obligees or any other party,
whomsoever, it being the intention of the parties hereto that no one shall be or
be deemed to be a third-party beneficiary of this Agreement.
40. Time of the Essence. Time is of the essence of this Agreement.
----------------------
41. Incorporation by Reference. The Attachments to this Agreement
----------------------------
referred to or included herein constitute integral parts to this Agreement and
are incorporated into this Agreement by this reference.
42. Press Releases and Public Announcements. No party shall issue any
----------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Effective Date without the prior written approval of
the other parties; provided, however, that any party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing party will use its efforts to advise the other parties prior
to making the disclosure).
43. Multiple Counterparts. This Agreement may be executed in one or
----------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all parties
hereto.
44. Controlling Agreement. In the event of any conflict between the
----------------------
terms of this Agreement or any of the Other Agreements or exhibits referred to
herein, the terms of this Agreement shall control.
45. Law Governing; Jurisdiction. This Agreement shall be governed by
-----------------------------
and construed in accordance with the laws of the State of New York, without
regard to any conflicts of laws provisions thereof. Each party hereby
irrevocably submits to the personal jurisdiction of the United States District
Court for the Southern District of New York, as well as of the Courts of the
State of New York in New York County, New York over any suit, action or
proceeding arising out of or relating to this Agreement. Each party hereby
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any
13
such mediation, arbitration, suit, action or proceeding brought in any such
county and any claim that any such mediation, arbitration, suit, action or
proceeding brought in such county has been brought in an inconvenient forum.
46. Entire Agreement. This instrument and the attachments hereto
-----------------
contain the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, the parties have executed this Plan of Merger on
August 29, 2007.
MED-X SYSTEMS, INC.
By
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
EQUITABLE ASSETS, INC.
By
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
CRANSTON, INC. (a Nevada corporation)
By
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
CRANSTON, INC. (a New York corpoartion)
By
---------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President
Attachments:
-----------
Attachment A Articles of Incorporation of Cranston, Inc. (a Nevada
corporation)
Attachment B Bylaws of Cranston, Inc. (a Nevada corporation)
Attachment C Escrow Agreement
Attachment D Subscription Agreement
14
EXHIBIT A
ARTICLES OF INCORPORATION OF
CRANSTON, INC.
A NEVADA CORPORATION
▇▇▇▇ ▇▇▇▇▇▇
SECRETARY OF STATE
[LOGO OMITTED] ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇ ▇▇▇▇
WEBSITE: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
---------------------------------
ARTICLES OF INCORPORATION
(PURSUANT TO NRS 78)
---------------------------------
USE BLACK INK ONLY - DO NOT HIGHLIGHT ABOVE SPACE IS FOR OFFICE USE ONLY
---------------------------------------------------------------------------------------------------------
1. Name of Cranston, Inc.
-------
Corporation:
------------ ----------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
2. Resident Agent Capitol Corporate Services, Inc.
-------------- ----------------------------------------------------------------------------
Name and Street Name
---------------
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
-------- ----------------------------------- ----------- --------
(must be a Nevada (MANDATORY) Physical Street Address City Zip Code
-----------------
address where process
--------------------- ----------------------------------- ----------- ------ --------
may be served) (OPTIONAL) Mailing Address City State Zip Code
--------------
---------------------------------------------------------------------------------------------------------
3. Shares: Number of shares Par value Number of shares
------- with par value: 250,000,000 per share: $ 0.001 without par value: 0
(number of shares ------------- -------- ----
-----------------
corporation is
--------------
authorized to
-------------
issue)
------
---------------------------------------------------------------------------------------------------------
4. Names & Addresses 1. ▇▇▇▇ ▇▇▇▇▇▇
----------------- ------------------------------------------------------------------------
of the Board of Name
---------------
Directors/Trustees ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
------------------ ----------------------------------- ----------- ------ --------
(each Director/Trustee Street Address City State Zip Code
----------------------
must be a natural person 2. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------ ------------------------------------------------------------------------
at least 18 years of Name
--------------------
age: attach additional ▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
---------------------- ----------------------------------- ----------- ------ --------
page if more than 3 Street Address City State Zip Code
-------------------
directors/trustees: 3.
------------------- -------------------------------------------------------------------------
Name
----------------------------------- ----------- ------ --------
Street Address City State Zip Code
---------------------------------------------------------------------------------------------------------
5. PURPOSE: The purpose of this Corporation shall be:
--------
(optional - see Any lawful purpose.
--------------- ----------------------------------------------------------------------------
instructions)
-------------
---------------------------------------------------------------------------------------------------------
6. NAME. ADDRESS ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ X /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------- --------------------------------- ---------------------------------------
AND SIGNATURE OF Name Signature
----------------
INCORPORATOR: ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
------------- ----------------------------------- ----------- ------ --------
(attach additional page Address City State Zip Code
-----------------------
If more than 1
--------------
incorporator)
-------------
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7. CERTIFICATE OF I hereby accept appointment as Resident Agent of the above named corporation
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ACCEPTANCE OF X
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APPOINTMENT OF Authorized Signature of R.A. of On Behalf of R.A. Company Date
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RESIDENT AGENT:
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This form must be accompanied Nevada Secretary of State Form 78
by appropriate fees. Articles 2007
Revised on: 01/01/07
CONTINUATION FOR ARTICLES OF INCORPORATION
FOR
CRANSTON, INC.
(THE "COMPANY")
ARTICLE 8
CAPITAL STOCK
1. Authorized Stock. The total number of shares of stock which the
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Company shall have authority to issue is 250,000,000, consisting of 200,000,000
shares of common stock, par value $0.001 per share (the "Common Stock"), and
50,000,000 shares of preferred stock, par value $0.001 per share (the "Preferred
Stock").
2. Preferred Stock. The Preferred Stock may be issued from time to
----------------
time in one or more series. The Board of Directors is hereby authorized to
create and provide for the issuance of shares of the Preferred Stock in series
and, by filing a certificate pursuant to the applicable section of the NRS (the
"Preferred Stock Designation"), to establish from time to time the number of
shares to be included in each such series, and to fix the designations, powers,
preferences and rights of the shares of each such series and the qualifications,
limitations or restrictions thereof. The authority of the Board of Directors
with respect to each series shall include, but not be limited to, determination
of the following:
(a) The designation of the series, which may be by distinguishing
number, letter or title.
(b) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the Preferred Stock
Designation) increase or decrease (but not below the number of shares thereof
then outstanding).
(c) Whether dividends, if any, shall be cumulative or
noncumulative and the dividend rate of the series.
(d) The dates at which dividends, if any, shall be payable.
(e) The redemption rights and price or prices, if any, for shares
of the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on, and the preferences, if any, of shares
of the series in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company.
(h) Whether the shares of the series shall be convertible into
shares of any other class or series, or any other security, of the Company or
any other corporation, and, if so, the specification of such other class or
series of such other security, the conversion price or prices or rate or rates,
any adjustments thereof, the date or dates at which such shares shall be
convertible and all other terms and conditions upon which such conversion may be
made.
(i) Restrictions on the issuance of shares of the same series or
of any other class or series.
(j) The voting rights, if any, of the holders of shares of the
series.
(k) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof as the Board of Directors shall determine.
3. Common Stock. The Common Stock shall be subject to the express
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terms of the Preferred Stock and any series thereof. Each share of the Common
Stock shall be equal to each other share of the Common Stock.
2
The holders of shares of the Common Stock shall be entitled to one vote for each
such share upon all questions presented to the stockholders.
4. Voting Rights. Except as may be provided in these Articles of
--------------
Incorporation or in a Preferred Stock Designation, or as may be required by
applicable law, the Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes, and holders of shares of the
Preferred Stock shall not be entitled to receive notice of any meeting of
stockholders at which they are not entitled to vote. At each election for
directors, every stockholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose election he has
a right to vote. It is expressly prohibited for any stockholder to cumulate his
votes in any election of directors.
5. Denial of Preemptive Rights. No stockholder of the Company shall,
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by reason of his holding shares of any class, have any preemptive or
preferential right to purchase or subscribe to any shares of any class of the
Company, now or hereafter to be authorized, or any notes, debentures, bonds, or
other securities convertible into or carrying options or warrants to purchase
shares of any class, now or hereafter to be authorized, whether or not the
issuance of any such shares, or such notes, debentures, bonds or other
securities would adversely affect dividend or voting rights of such stockholder,
other than such rights, if any, as the Board of Directors in its discretion may
fix; and the Board of Directors may issue shares of any class of the Company, or
any notes, debentures, bonds, or other securities convertible into or carrying
options or warrants to purchase shares of any class, without offering any such
shares of any class, either in whole or in part, to the existing stockholders of
any class.
ARTICLE 9
ELECTION OF DIRECTORS
1. Number. The number of directors constituting the initial Board of
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Directors is two. The business and affairs of the Company shall be conducted
and managed by, or under the direction of, the Board of Directors. The total
number of directors constituting the entire Board of Directors shall be fixed
and may be altered from time to time by or pursuant to a resolution passed by
the Board of Directors.
2. Vacancies. Except as otherwise provided for herein, newly created
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directorships resulting from any increase in the authorized number of directors,
and any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause, may be filled only by the affirmative
vote of a majority of the remaining directors then in office, even though less
than a quorum of the Board of Directors. Any director elected in accordance
with the preceding sentence shall hold office for the remainder of the full term
of the newly created directorship or for the directorship in which the vacancy
occurred, and until such director's successor shall have been duly elected and
qualified, subject to his earlier death, disqualification, resignation or
removal. Subject to the provisions of these Articles of Incorporation, no
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
3. Removal of Directors. Except as otherwise provided in any Preferred
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Stock Designation, any director may be removed from office only by the
affirmative vote of the holders of a majority or more of the combined voting
power of the then outstanding shares of capital stock of the Company entitled to
vote at a meeting of stockholders called for that purpose, voting together as a
single class.
ARTICLE 10
MEETING OF STOCKHOLDERS
Meetings of stockholders of the Company (the "Stockholder Meetings") may be
held within or without the State of Nevada, as the Bylaws of the Company (the
"Bylaws") may provide. Special Stockholder Meetings may be called only by (a)
the President, (b) the holders of at least 10 percent of all of the shares
entitled to vote at the proposed special meeting, or (c) the Board of Directors
pursuant to a duly adopted resolution. Special Stockholder Meetings may not be
called by any other person or persons or in any other manner. Elections of
directors need not be by written ballot unless the Bylaws shall so provide.
3
ARTICLE 11
STOCKHOLDER CONSENT
No action that is required or permitted to be taken by the stockholders of
the Company at any annual or special meeting of stockholders may be effected by
written consent of stockholders in lieu of a meeting of stockholders, unless the
action to be effected by written consent of stockholders and the taking of such
action by such written consent have expressly been approved in advance by the
Board of Directors.
ARTICLE 12
LIMITATION OF LIABILITY
Except as otherwise provided in the NRS, a director or officer of the
Company shall not be personally liable to the Company or its stockholders for
damages as a result of any act or failure to act in his capacity as a director
or officer; provided, however, that this Article shall not eliminate or limit
the liability of a director or officer (a) if it is proven that his act or
failure to act constituted a breach of his fiduciary duties and such breach
involved intentional misconduct, fraud or a knowing violation of law, or (b)
under Section 78.300 of the NRS.
If the NRS is amended after the date of filing of these Articles of
Incorporation to authorize corporate action further limiting or eliminating the
personal liability of a director, then the liability of the directors of the
Company shall be limited or eliminated to the fullest extent permitted by the
NRS, as so amended, or a similar successor provision. Any repeal or
modification of this Article by the stockholders of the Company or otherwise
shall not adversely affect any right or protection of a director of the Company
existing at the time of such repeal or modification.
ARTICLE 13
INDEMNIFICATION
1. Discretionary Indemnification. (a) The Company may indemnify any
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person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the Company, by reason of the fact that he is or was a director, officer,
employee or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the action, suit or
proceeding if he: (i) is not liable pursuant to Section 78.138 of the NRS; or
(ii) acted in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction or upon a plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person is liable
pursuant to Section 78.138 of the NRS or did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, or that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
(b) The Company may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the Company to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses, including amounts paid in settlement
and attorneys' fees actually and reasonably incurred by him in connection with
the defense or settlement of the action or suit if he: (i) is not liable
pursuant to Section 78.138 of the NRS; or (ii) acted in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company. Indemnification may not be made for any claim, issue
or matter as to which such a person has been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable to the
Company or for amounts paid in settlement to the Company, unless and only to the
extent that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, the person is fairly and reasonably entitled to
indemnity for such expenses as the courts deem proper.
4
2. Determination of Discretionary Indemnification. Any discretionary
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indemnification pursuant to Section 1 of this Article "Indemnification", unless
ordered by a court or advanced pursuant to this Section 2, may be made by the
Company only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances. The determination must be made:
(a) By the stockholders;
(b) By the Board of Directors by majority vote of a quorum
consisting of directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who
were not parties to the action, suit or proceeding so orders, by independent
legal counsel in a written opinion; or
(d) If a quorum consisting of directors who were not parties to
the action, suit or proceeding cannot be obtained, by independent legal counsel
in a written opinion.
The expenses of officers and directors incurred in defending a civil or
criminal action, suit or proceeding must be paid by the Company as they are
incurred in advance of the final disposition of the action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined by a court of competent
jurisdiction that he is not entitled to be indemnified by the Company.
3. Mandatory Indemnification. To the extent that a director, officer,
--------------------------
employee or agent of the Company has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in Section 1 of this
Article "Indemnification", or in defense of any claim, issue or matter therein,
the Company shall indemnify him against expenses, including attorneys' fees
actually and reasonably incurred by him in connection with the defense.
4. Non-Exclusivity. The indemnification and advancement of expenses
---------------
authorized in or ordered by a court pursuant to this Article:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors or otherwise, for either an
action in his official capacity or an action in another capacity while holding
his office, except that indemnification, unless ordered by a court pursuant to
Section 1 of this Article, or for the advancement of expenses made pursuant to
Section 2 of this Article may not be made to or on behalf of any director or
officer if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was material
to the cause of action.
(b) Continues for a person who has ceased to be a director,
officer, employee or agent and inures to the benefit of the heirs, executors and
administrators of any such person.
5. Insurance. The Company may purchase and maintain insurance or make
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other financial arrangements on behalf of any person who is or was a director,
officer, employee or agent of the Company, or is or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise for any liability asserted
against him and liability and expenses incurred by him in his capacity as a
director, officer, employee or agent, or arising out of his status as such,
whether or not the Company has the authority to indemnify him against such
liability expenses.
5
ARTICLE 14
AMENDMENT OF CORPORATE DOCUMENTS
1. Articles of Incorporation. Whenever any vote of the holders of
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voting shares of the capital stock of the Company is required by law to amend,
alter, repeal or rescind any provision of these Articles of Incorporation, such
alteration, amendment, repeal or rescission of any provision of these Articles
of Incorporation must be approved by the Board of Directors and by the
affirmative vote of the holders of at least a majority of the combined voting
power of the then outstanding voting shares of capital stock of the Company,
voting together as a single class.
Subject to the provisions hereof, the Company reserves the right at any
time, and from time to time, to amend, alter, repeal or rescind any provision
contained in these Articles of Incorporation in the manner now or hereafter
prescribed by law, and other provisions authorized by the laws of the State of
Nevada at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other persons
whomsoever by and pursuant to these Articles of Incorporation in their present
form or as hereafter amended are granted subject to the rights reserved in this
Article.
2. Bylaws. In addition to any affirmative vote required by law, any
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change of the Bylaws may be adopted either (a) by the affirmative vote of the
Board of Directors, or (b) by the stockholders by the affirmative vote of the
holders of at least a majority of the combined voting power of the then
outstanding voting shares of capital stock of the Company, voting together as a
single class.
ARTICLE 15
APPLICATION OF NRS 78.411 TO 78.444, INCLUSIVE
These Articles of Incorporation expressly provide that the Company shall
not be governed by NRS 78.411 to 78.444, inclusive.
ARTICLE 16
EXISTENCE
The Company is to have perpetual existence.
6
EXHIBIT B
BYLAWS OF
CRANSTON, INC.
A NEVADA CORPORATION
BYLAWS OF
CRANSTON, INC.
ARTICLE I
OFFICES
1.1. Resident Office. The resident office of Cranston, Inc. (the
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"Company") required by Section 78.035 of the Nevada Revised Statutes or any
successor statute (the "NRS") to be maintained in the State of Nevada shall be
the resident office named in the Articles of Incorporation of the Company, as
they may be amended or restated from time to time in accordance with the NRS
(the "Articles of Incorporation").
1.2. Other Offices. The Company may also have offices at such other
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places both within and without the State of Nevada as the Board of Directors of
the Company (the "Board of Directors") may determine from time to time or as the
business of the Company may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1. Place of Meetings. Meetings of the Company's stockholders shall
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be held at such place within or without the State of Nevada as may be designated
by the Board of Directors or the officer calling the meeting, or, in the absence
of such designation, at the principal office of the Company.
2.2. Annual Meeting. An annual meeting of the stockholders, for the
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election of directors to succeed those whose terms expire or to fill vacancies
and for the transaction of such other business as may properly come before the
meeting, shall be held on such date and at such time as the Board of Directors
shall fix and set forth in the notice of the meeting, which date shall be within
13 months subsequent to the last annual meeting of stockholders. At the annual
meeting of the stockholders, only such business shall be conducted as shall have
been properly brought before the annual meeting as set forth in Paragraph 2.8
hereof. Failure to hold the annual meeting at the designated time shall not
work a dissolution of the Company.
2.3. Special Meetings. Subject to the rights of the holders of any
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series of the Company's preferred stock, par value $0.001 per share (the
"Preferred Stock"), as designated in any resolutions adopted by the Board of
Directors and filed with the State of Nevada (a "Preferred Stock Designation"),
special meetings of the stockholders may be called at any time by those persons
set forth in the Articles of Incorporation. Upon written request of any person
or persons who have duly called a special meeting, it shall be the duty of the
Secretary to fix the date of the meeting to be held not less than 10 nor more
than 60 days after the receipt of the request and to give due notice thereof, as
required by the NRS. If the Secretary shall neglect or refuse to fix the date
of the meeting and give notice thereof, the person or persons calling the
meeting may do so.
2.4. Notice of Meeting. Written or printed notice of all meetings,
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stating the place, day and hour of the meeting and the purpose or purposes for
which the meeting is called, shall be delivered not less than 10 nor more than
60 days before the date of the meeting, either personally or by mail, by or at
the direction of the Chairman of the Board or Secretary, to each stockholder
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered to a stockholder when deposited in the United States mail addressed to
such stockholder at such stockholder's address as it appears on the stock
transfer records of the Company, with postage thereon prepaid.
2.5. Registered Holders of Shares; Closing of Share Transfer Records;
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and Record Date.
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(a) Registered Holders as Owners. Unless otherwise provided under
----------------------------
the NRS, the Company may regard the person in whose name any shares are
registered in the stock transfer records of the Company at any particular time
(including, without limitation, as of a record date fixed pursuant to
subparagraph (b) of this Paragraph 2.5) as the owner of such shares at that time
for purposes of voting, receiving distributions thereon or notices in respect
thereof, transferring such shares, exercising rights of dissent with respect to
such shares, entering into agreements with respect to such shares, or giving
proxies with respect to such shares; and neither the Company
1
nor any of its officers, directors, employees or agents shall be liable for
regarding that person as the owner of such shares at that time for those
purposes, regardless of whether that person possesses a certificate for such
shares.
(b) Record Date. For the purpose of determining stockholders
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entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive a distribution by the Company (other
than a distribution involving a purchase or redemption by the Company of any of
its own shares) or a share dividend, or in order to make a determination of
stockholders for any other proper purpose, the Board of Directors may fix in
advance a date as the record date for any such determination of stockholders,
such date in any case to be not more than 60 days and not less than 10 days,
prior to the date on which the particular action requiring such determination of
stockholders is to be taken. The Board of Directors shall not close the books
of the Company against transfers of shares during the whole or any part of such
period.
If the Board of Directors does not fix a record date for any meeting of the
stockholders, the record date for determining stockholders entitled to notice of
or to vote at such meeting shall be at the close of business on the day next
preceding the day on which notice is given, or, if in accordance with Paragraph
7.3 of these Bylaws notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
2.6. Quorum of Stockholders; Adjournment. Unless otherwise provided in
-----------------------------------
the Articles of Incorporation, a majority of the outstanding shares of capital
stock of the Company entitled to vote, present in person or represented by
proxy, shall constitute a quorum at any meeting of the stockholders, and the
stockholders present at any duly convened meeting may continue to do business
until adjournment notwithstanding any withdrawal from the meeting of holders of
shares counted in determining the existence of a quorum. Unless otherwise
provided in the Articles of Incorporation or these Bylaws, any meeting of the
stockholders may be adjourned from time to time by the chairman of the meeting
or the holders of a majority of the issued and outstanding stock, present in
person or represented by proxy, whether or not a quorum is present, without
notice other than by announcement at the meeting at which such adjournment is
taken, and at any such adjourned meeting at which a quorum shall be present any
action may be taken that could have been taken at the meeting originally called;
provided that if the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the adjourned meeting.
2.7. Voting by Stockholders.
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(a) Voting on Matters Other than the Election of Directors. With
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respect to any matters as to which no other voting requirement is specified by
the NRS, the Articles of Incorporation or these Bylaws, and, subject to the
rights of the holders of any series of Preferred Stock to elect directors under
specific circumstances, the affirmative vote required for stockholder action
shall be that of a majority of the shares present in person or represented by
proxy at the meeting (as counted for purposes of determining the existence of a
quorum at the meeting). In the case of a matter submitted for a vote of the
stockholders as to which a stockholder approval requirement is applicable under
the stockholder approval policy of any stock exchange or quotation system on
which the capital stock of the Company is traded or quoted, the requirements
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any provision of the Internal Revenue Code, in each case for which no higher
voting requirement is specified by the NRS, the Articles of Incorporation or
these Bylaws, the vote required for approval shall be the requisite vote
specified in such stockholder approval policy, the Exchange Act or Internal
Revenue Code provision, as the case may be (or the highest such requirement if
more than one is applicable).
(b) Voting in the Election of Directors. Unless otherwise
----------------------------------------
provided in the Articles of Incorporation or these Bylaws in accordance with the
NRS, directors shall be elected by a plurality of the votes cast by the holders
of outstanding shares of capital stock of the Company entitled to vote in the
election of directors at a meeting of stockholders at which a quorum is present.
(c) Consents in Lieu of Meeting. Pursuant to the Articles of
-------------------------------
Incorporation, no action that is required or permitted to be taken by the
stockholders of the Company at any annual or special meeting of stockholders may
be effected by the written consent of stockholders in lieu of a meeting, unless
the action to be effected by the written consent of stockholders and the taking
of such action by written consent have been expressly approved in advance by the
Board of Directors.
2
(d) Other. The Board of Directors, in its discretion, or the
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officer of the Company presiding at a meeting of stockholders of the Company, in
his discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
2.8. Business to be Conducted at Annual or Special Stockholder
-----------------------------------------------------------------
Meetings. At any annual or special meeting of stockholders, only such business
shall be conducted, and only such proposals shall be acted upon, as shall have
been disclosed in the notice delivered to the stockholders with respect to such
meeting.
2.9. Proxies. Each stockholder entitled to vote at a meeting of
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stockholders may authorize another person or persons to act for him by proxy.
Proxies for use at any meeting of stockholders shall be filed with the
Secretary, or such other officer as the Board of Directors may from time to time
determine by resolution, before or at the time of the meeting. All proxies
shall be received and taken charge of and all ballots shall be received and
canvassed by the secretary of the meeting who shall decide all questions
relating to the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.
2.10. Approval or Ratification of Acts or Contracts by Stockholders.
----------------------------------------------------------------
The Board of Directors in its discretion may submit any act or contract for
approval or ratification at any annual meeting of the stockholders, or at any
special meeting of the stockholders called for the purpose of considering any
such act or contract, and any act or contract that shall be approved or be
ratified by the vote of the stockholders holding a majority of the issued and
outstanding shares of stock of the Company entitled to vote and present in
person or by proxy at such meeting (provided that a quorum is present), shall be
as valid and as binding upon the Company and upon all the stockholders as if it
has been approved or ratified by every stockholder of the Company.
2.11. Inspectors of Election. The Company shall, in advance of any
------------------------
meeting of stockholders, appoint one or more inspectors of election, who may be
employees of the Company, to act at the meeting or any adjournment thereof and
to make a written report thereof. The Company may designate one or more persons
as alternate inspectors to replace any inspector who fails to act. If no
inspector so appointed or designated is able to act at a meeting of
stockholders, the chairman or the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his ability.
The inspector or inspectors so appointed or designated shall: (a) ascertain
the number of shares of capital stock of the Company outstanding and the voting
power of each such share; (b) determine the shares of capital stock of the
Company represented at the meeting and the validity of proxies and ballots; (c)
count all votes and ballots; (d) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors; and (e) certify their determination of the number of shares of the
capital stock of the Company represented at the meeting and such inspectors'
count of all votes and ballots. Such certification and report shall specify
such other information as may be required by law. In determining the validity
and counting of proxies and ballots cast at any meeting of stockholders of the
Company, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may
serve as an inspector at such election.
3
ARTICLE III
DIRECTORS
3.1. Powers, Number, Classification and Tenure.
---------------------------------------------
(a) The powers of the Company shall be exercised by or under the
authority of, and the business and affairs of the Company shall be managed under
the direction of, the Board of Directors. Each director shall hold office for
the full term for which such director is elected and until such director's
successor shall have been duly elected and qualified or until his earlier death
or resignation or removal in accordance with the Articles of Incorporation or
these Bylaws.
(b) Within the limits specified in the Articles of Incorporation,
and subject to the rights of the holders of any series of Preferred Stock to
elect directors under specific circumstances, the number of directors that shall
constitute the whole Board of Directors shall be fixed by, and may be increased
or decreased from time to time by, the affirmative vote of a majority of the
members at any time constituting the Board of Directors. Except as provided in
the Articles of Incorporation, and subject to the rights of the holders of any
series of Preferred Stock to elect directors under specific circumstances, newly
created directorships resulting from any increase in the number of directors and
any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified or until his earlier death, resignation or removal. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.
3.2. Qualifications. Directors need not be residents of the State of
--------------
Nevada or stockholders of the Company.
3.3. Place of Meeting; Order of Business. Except as otherwise provided
-----------------------------------
by law, meetings of the Board of Directors, regular or special, may be held
either within or without the State of Nevada, at whatever place is specified by
the person or persons calling the meeting. In the absence of specific
designation, the meetings shall be held at the principal office of the Company.
At all meetings of the Board of Directors, business shall be transacted in such
order as shall from time to time be determined by the Chairman of the Board, or
in his absence by the President, or by resolution of the Board of Directors.
3.4. Regular Meetings. Regular meetings of the Board of Directors
-----------------
shall be held, in each case, at such hour and on such day as may be fixed by
resolution of the Board of Directors, without further notice of such meetings.
The time or place of holding regular meetings of the Board of Directors may be
changed by the Chairman of the Board by giving written notice thereof as
provided in Paragraph 3.6 hereof.
3.5. Special Meetings. Special meetings of the Board of Directors
-----------------
shall be held, whenever called by the Chairman of the Board or by resolution
adopted by the Board of Directors, in each case, at such hour and on such day as
may be stated in the notice of the meeting.
3.6. Attendance at and Notice of Meetings. Written notice of the time
-------------------------------------
and place of, and general nature of the business to be transacted at, all
special meetings of the Board of Directors, and written notice of any change in
the time or place of holding the regular meetings of the Board of Directors,
shall be given to each director personally or by mail or by telegraph,
telecopier or similar communication at least one day before the day of the
meeting; provided, however, that notice of any meeting need not be given to any
director if waived by him in writing, or if he shall be present at such meeting.
Participation in a meeting of the Board of Directors shall constitute presence
in person at such meeting, except where a person participates in the meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.
3.7. Quorum of and Action by Directors. A majority of the directors in
---------------------------------
office shall constitute a quorum of the Board of Directors for the transaction
of business; but a lesser number may adjourn from day to day
4
until a quorum is present. Except as otherwise provided by law or in these
Bylaws, all questions shall be decided by the vote of a majority of the
directors present at a meeting at which a quorum is present.
3.8. Board and Committee Action Without a Meeting. Unless otherwise
-----------------------------------------------
restricted by the Articles of Incorporation or these Bylaws, any action required
or permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if a consent in writing, setting forth
the action so taken, is signed by all the members of the Board of Directors or
such committee, as the case may be, and shall be filed with the Secretary.
3.9. Board and Committee Telephone Meetings. Subject to the provisions
--------------------------------------
required or permitted by the NRS for notice of meetings, unless otherwise
restricted by the Articles of Incorporation or these Bylaws, members of the
Board of Directors, or members of any committee designated by the Board of
Directors, may participate in and hold a meeting of such Board of Directors or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Paragraph 3.9 shall constitute
presence in person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
3.10. Compensation. Directors shall receive such compensation for
------------
their services as shall be determined by the Board of Directors.
3.11. Removal. Directors may be removed from office in the matter set
-------
forth in the Articles of Incorporation, subject to the rights of the holders of
any series of Preferred Stock to elect directors under specific circumstances.
3.12. Committees of the Board of Directors.
-----------------------------------------
(a) The Board of Directors, by resolution adopted by a majority of
the full Board of Directors, may designate from among its members one or more
committees (in addition to those listed below), each of which shall be comprised
of one or more of its members, and may designate one or more of its members as
alternate members of any committee, who may, subject to any limitations by the
Board of Directors, replace absent or disqualified members at any meeting of
that committee. Any such committee, to the extent provided in such resolution
or in the Articles of Incorporation or these Bylaws, shall have and may exercise
all of the authority of the Board of Directors to the extent permitted by the
NRS, including, without limitation, the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a plan of merger
pursuant to Section 78.125 of the NRS. Any such committee may authorize the
seal of the Company to be affixed to all papers which may require it. In
addition to the above, such committee or committees shall have such other powers
and limitations of authority as may be determined from time to time by
resolution adopted by the Board of Directors.
(b) The Board of Directors shall have the power at any time to
change the membership of any such committee and to fill vacancies in it. A
majority of the number of members of any such committee shall constitute a
quorum for the transaction of business unless a greater number is required by a
resolution adopted by the Board of Directors. The act of the majority of the
members of a committee present at any meeting at which a quorum is present shall
be the act of such committee, unless the act of a greater number is required by
a resolution adopted by the Board of Directors. Each such committee may elect a
chairman and appoint such subcommittees and assistants as it may deem necessary.
Except as otherwise provided by the Board of Directors, meetings of any
committee shall be conducted in accordance with Paragraphs 3.4, 3.5, 3.6, 3.7,
3.8, 3.9 and 7.3 hereof. In the absence or disqualification of a member of a
committee, the member or members present at any meeting and not disqualified
from voting, whether or not constituting a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
the absent or disqualified member. Any member of any such committee elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the Company will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of a member of a
committee shall not of itself create contract rights.
5
(c) Any action taken by any committee of the Board of Directors
shall promptly be recorded in the minutes and filed with the Secretary.
(d) Notwithstanding anything herein contained to the contrary, the
composition and powers of any committee of the Board of Directors are expressly
subject to the requirements of any stock exchange or quotation system on which
the capital stock of the Company is traded or quoted, or the Exchange Act.
(e) Executive Committee. The Board of Directors may create an
--------------------
Executive Committee of the Board of Directors, which committee shall have and
may exercise all the powers and authority of the Board of Directors between
regular or special meetings of the Board of Directors in the management of the
business and affairs of the Company, except to the extent limited by Nevada law.
Without limiting the generality of the foregoing, the Executive Committee shall
have the power and authority to (i) declare dividends on any class of capital
stock of the Company, (ii) authorize the issuance of capital stock of the
Company, (iii) adopt plans of merger, and (iv) in reference to amending the
Articles of Incorporation, to the extent authorized in the resolution or
resolutions providing for the issuance of shares of capital stock adopted by the
Board of Directors, fix the designations and any of the preferences or rights of
such shares relating to dividends, redemptions, dissolution, any distribution of
assets of the Company or the conversion into, or the exchange of such shares
for, shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Company or fix the number of shares of
any series of stock or authorize the increase or decrease of the shares of any
series.
(f) Audit Committee. The Board of Directors may create an Audit
----------------
Committee of the Board of Directors whose members shall consist solely of
directors who are not employees or affiliates of the Company and have no
relationship with the Company that would, in the judgment of the Board of
Directors, interfere with their exercise of independent judgment as a member of
such committee. The Audit Committee shall have and may exercise the power and
authority to recommend to the Board of Directors the accounting firm to be
selected by the Board of Directors or to be recommended by it for stockholder
approval, as independent auditor of the financial statements of the Company and
its subsidiaries, and to act on behalf of the Board of Directors in meeting and
reviewing with the independent auditors, the chief accounting officer, the chief
internal auditor, if any, and the appropriate corporate officers, matters
relating to corporate financial reporting and accounting procedures and
policies, adequacy of financial, accounting and operating controls and the scope
of the respective audits of the independent auditors and the internal auditor,
if any. The Audit Committee shall also review the results of such audits with
the respective auditors and shall report the results of those reviews to the
Board of Directors. The Audit Committee shall submit to the Board of Directors
any recommendations it may have from time to time with respect to financial
reporting and accounting practices and policies and financial, accounting and
operational controls and safeguards. The Audit Committee may submit to the
Compensation Committee any recommendations it may have with respect to the
compensation of the chief accounting officer and the chief internal auditor, if
any. The Board of Directors shall, by resolution adopted by a majority of the
Board of Directors, designate not less than two of its qualifying members from
time to time to constitute members of the Audit Committee.
(g) Nominating Committee. The Board of Directors may create a
---------------------
Nominating Committee of the Board of Directors, which committee shall have and
may exercise the power and authority to recommend to the Board of Directors
prior to each annual meeting of the stockholders of the Company: (i) the
appropriate size and composition of the Board of Directors; and (ii) nominees:
(1) for election to the Board of Directors for whom the Company should solicit
proxies; (2) to serve as proxies in connection with the annual stockholders'
meeting; and (3) for election to all committees of the Board of Directors other
than the Nominating Committee. The Board of Directors shall, by resolution
adopted by a majority of the Board, designate one or more of its members from
time to time to constitute members of the Nominating Committee.
(h) Compensation Committee. The Board of Directors may create a
-----------------------
Compensation Committee of the Board of Directors, whose members shall consist
solely of directors who are not employees or affiliates of the Company and have
no relationship with the Company that would, in the judgment of the Board of
Directors, interfere with their exercise of independent judgment as a member of
such committee. The Compensation Committee shall have and may exercise all the
power and authority to (i) establish a general compensation policy for the
officers and employees of the Company, including to establish and at least
annually review officers' salaries and levels of officers' participation in the
benefit plans of the Company, (ii) prepare any reports that may be required by
the regulations of the Securities and Exchange Commission or otherwise relating
to officer compensation, (iii)
6
approve any increases in directors' fees, and (iv) exercise all other powers of
the Board of Directors with respect to matters involving the compensation of
employees and the employee benefits of the Company as shall be delegated by the
Board of Directors to the Compensation Committee from time to time. Without
limiting the generality of the foregoing, the Compensation Committee shall have
the power and authority to authorize the issuance of capital stock of the
Company pursuant to any compensation or benefit plan or arrangement adopted or
entered into by the Company. The Board of Directors shall, by resolution
adopted by a majority of the Board, designate two or more of its qualifying
members from time to time to constitute members of the Compensation Committee.
ARTICLE IV
OFFICERS
4.1. Designation. The officers of the Company shall consist of a
-----------
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Secretary, Chief Financial Officer, Treasurer, Controller and such
Executive, Senior or other Vice Presidents, Assistant Secretaries, Assistant
Treasurers, Assistant Controllers and other officers as may be elected or
appointed by the Board of Directors from time to time. Any number of offices
may be held by the same person.
4.2. Chairman of the Board. The Chairman of the Board shall be the
------------------------
Chief Executive Officer of the Company and shall preside at all meetings of the
stockholders and of the Board of Directors. Except where by law the signature
of the President is required, the Chairman of the Board shall possess the same
power as the President to sign all contracts, certificates and other instruments
of the Company which may be authorized by the Board of Directors. The Chairman
of the Board shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these Bylaws or by the
Board of Directors. In the absence or incapacity to act of the President, the
Chairman of the Board shall serve as acting President, and when so acting, shall
have all the powers of and be subject to the restrictions of such office.
4.3. President. The President shall be the Chief Operating Officer of
---------
the Company and shall have general supervision and control of the business,
affairs and properties of the Company and its general officers, and shall see
that all orders and resolutions of the Board of Directors are carried into
effect. He shall have the power to appoint and remove all subordinate officers,
agents and employees, except those elected or appointed by the Board of
Directors, and shall execute all bonds, mortgages, contracts and other
instruments of the Company requiring a seal, under the seal of the Company,
except where required or permitted by law to be otherwise signed and executed
and except that the other officers of the Company may sign and execute documents
when so authorized by these Bylaws, the Board of Directors or the President.
The President shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these Bylaws or by the
Board of Directors. In the incapacity to act of the Chairman of the Board, the
President shall serve as acting Chairman of the Board, and when so acting, shall
have all the powers of and be subject to the restrictions of such office.
4.4. Chief Operating Officer. As the Chief Operating Officer, the
-------------------------
President shall have general charge and supervision of the day to day operations
of the Company (subject to the direction of the Board of Directors), and, in
general, shall perform such other duties as are incident to the office of a
chief operating officer of a corporation, including those duties customarily
performed by persons occupying such office, and shall perform such other duties
as, from time to time, may be assigned to him by the Board of Directors.
4.5. Vice President. The Board of Directors may appoint such Vice
---------------
Presidents as may be recommended by the President or as the directors deem
necessary or appropriate. Vice Presidents may be designated as Senior Vice
Presidents, Executive Vice Presidents or some other designation as the Board of
Directors deems appropriate (each a "Vice President"). Each Vice President
shall perform such duties as the Board of Directors may from time to time
prescribe and have such other powers as the President may from time to time
prescribe.
4.6. Chief Financial Officer. The Chief Financial Officer shall be the
-----------------------
chief accounting officer of the Company and shall have general charge and
supervision of the day to day financial operations of the Company (subject to
the direction of the Board of Directors), and, in general, shall perform such
other duties as are incident to the office of a chief financial officer of a
corporation, including those duties customarily performed by persons
7
occupying such office, and shall perform such other duties as, from time to
time, may be assigned to him by the Board of Directors or the Audit Committee.
4.7. Secretary. The Secretary shall attend the meetings of the Board
---------
of Directors and all meetings of stockholders and record the proceedings thereof
in a book or books to be kept for that purpose; the Secretary shall also perform
like duties for the standing committees when required. The Secretary shall
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or the President, under whose
supervision he shall be. If the Secretary shall be unable or shall refuse to
cause to be given notice of all meetings of the stockholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary, then
the Chairman of the Board may choose another officer to cause such notice to be
given. The Secretary shall have custody of the seal of the Company and the
Secretary or any Assistant Secretary, if there be one, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by the signature of the Secretary or by the signature of any such
Assistant Secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the Company and to attest the affixing by his
signature. The Secretary shall see that all books, reports, statements,
certificates and other documents and records required by law to be kept or filed
are properly kept or filed, as the case may be.
4.8. Treasurer. The Treasurer shall have the custody of the Company's
---------
funds and securities and shall keep full and accurate accounts of receipt and
disbursements in books belonging to the Company and shall deposit all moneys and
other valuable effects in the name and to the credit of the Company in such
depositories as may be designated by the Chief Financial Officer or the Board of
Directors. The Treasurer shall disburse the funds of the Company as may be
ordered by the Chief Financial Officer or the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chairman of the Board
and the Board of Directors, at its regular meeting, or when the Board of
Directors so requires, an account of all his transactions as Treasurer and of
the liquidity of the Company. If required by the Board of Directors, the
Treasurer shall give the Company a bond in such sum and with such surety or
sureties as shall be satisfactory to the Board of Directors for the faithful
performance of the duties of his office and for the restoration to the Company,
in case of his death, resignation, retirement or removal from office, of all
books papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the Company.
4.9. Controller. The Controller, if there is one, shall maintain
----------
records of all assets, liabilities, and transactions of the Company and shall be
responsible for the design, installation and maintenance of accounting and cost
control systems and procedures for the Company and shall perform such other
duties and have such other powers as from time to time may be assigned to him by
the Chief Financial Officer, Board of Directors or the Audit Committee.
4.10. Assistant Secretaries. Except as may be otherwise provided in
----------------------
these Bylaws, Assistant Secretaries, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the President, any Vice President, or the Secretary, and in the
absence of the Secretary or in the event of his disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
4.11. Assistant Treasurers. Assistant Treasurers, if there be any,
---------------------
shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President or the Treasurer, and
in the absence of the Treasurer or in the event of his disability or refusal to
act, shall perform the duties of the Treasurer, and when so acting, shall have
all the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Company a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Company, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Company.
4.12. Assistant Controllers. Except as may be otherwise provided in
----------------------
these Bylaws, Assistant Controllers, if there be any, shall perform such duties
and have such powers as from time to time may be assigned to them by the Board
of Directors, the President, any Vice President, or the Controller, and in the
absence of the
8
Controller or in the event of his disability or refusal to act, shall perform
the duties of the Controller, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the Controller.
4.13. Other Officers. Such other officers as the Board of Directors
---------------
may choose shall perform such duties and have such powers, subordinate to those
powers specifically delegated to certain officers in these Bylaws, as from time
to time may be assigned to them by the Board of Directors. The President of the
Company shall have the power to choose such other officers and to prescribe
their respective duties and powers, subject to control by the Board of
Directors.
4.14. Vacancies. Whenever any vacancies shall occur in any office by
---------
death, resignation, increase in the number of offices of the Company, or
otherwise, the same shall be filled by the Board of Directors (or the President,
in accordance with Paragraph 4.3 of these Bylaws, subject to control by the
Board of Directors), and the officer so appointed shall hold office until such
officer's successor is elected or appointed in accordance with these Bylaws or
until his earlier death, resignation or removal.
4.15. Removal. Any officer or agent of the Company may be removed by
-------
the Board of Directors whenever in its judgment the best interests of the
Company will be served thereby, but such removal shall be without prejudice to
the contract rights, if any, of the person so removed. Election or appointment
of an officer or agent shall not of itself create contract rights.
4.16. Action with Respect to Securities of Other Corporations. Unless
--------------------------------------------------------
otherwise directed by the Board of Directors, the Chairman of the Board, the
President, any Vice President and the Treasurer of the Company shall each have
power to vote and otherwise act on behalf of the Company, in person or by proxy,
at any meeting of security holders of or with respect to any action of security
holders of any other corporation in which the Company may hold securities and
otherwise to exercise any and all rights and powers which the Company may
possess by reason of its ownership of securities in such other corporation.
ARTICLE V
CAPITAL STOCK
5.1. Certificates for Shares. The certificates for shares of the
-------------------------
capital stock of the Company shall be in such form as may be approved by the
Board of Directors from time to time. The Company shall deliver one or more
certificates to each of the Company's stockholders, which shall represent the
number of shares to which such stockholder is entitled. Certificates shall be
signed by the Chairman of the Board, the President or a Vice President and
either the Secretary or an Assistant Secretary, and may bear the seal of the
Company or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles. The stock record books and the blank stock
certificates shall be kept by the Secretary, or at the office of such transfer
agent or transfer agents as the Board of Directors may from time to time by
resolution determine. In case any officer who has signed or whose facsimile
signature has been placed upon such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Company with
the same effect as if such person were such officer at the date of its issuance.
5.2. Multiple Classes of Stock. As the Company is authorized to issue
--------------------------
more than one class of capital stock and more than one series of preferred
stock, a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualification, limitations or restrictions of such preferences
and/or rights shall be set forth in full or summarized on the face or back of
each of the certificates the Company issues to represent such class or series of
stock; provided that, to the extent allowed by law, in lieu of such statement,
the face or back of such certificates may state that the Company will furnish a
copy of such statement without charge to each requesting stockholder.
5.3. Transfer of Shares. The shares of stock of the Company shall be
--------------------
transferable only on the books of the Company by the holders thereof in person
or by their duly authorized attorneys or legal representatives upon surrender
and cancellation of certificates for a like number of shares.
5.4. Ownership of Shares. As the Company is entitled to treat the
---------------------
holder of record of any share or shares of capital stock as the holder in fact
thereof under Paragraph 2.5 hereof, the Company shall not be bound to
9
recognize any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of Nevada.
5.5. Regulations Regarding Certificates. The Board of Directors shall
-----------------------------------
have the power and authority to make all such rules and regulations as they may
deem expedient concerning the issue, transfer and registration or the
replacement of certificates for shares of capital stock of the Company.
5.6. Lost or Destroyed Certificates. The Board of Directors may
---------------------------------
determine the conditions upon which a new certificate representing shares of the
capital stock of the Company may be issued in place of a certificate which is
alleged to have been lost, stolen or destroyed; and may, in its discretion,
require the owner of such certificate or his legal representative to give bond,
with sufficient surety, to indemnify the Company and each transfer agent and
registrar against any and all losses or claims that may arise by reason of the
issue of a new certificate in the place of the one so lost, stolen or destroyed.
ARTICLE VI
INDEMNIFICATION
6.1. General. The Company shall indemnify its directors, officers,
-------
employees, agents and others as provided in the Articles of Incorporation.
6.2. Request for Indemnification. A party requesting indemnification
-----------------------------
(the "Indemnitee") shall submit notice of such request in writing to the
Secretary of the Company. Such notice of request for indemnification shall
contain sufficient information to reasonably inform the Company about the nature
and extent of the indemnification or advance sought by the Indemnitee. The
Secretary shall promptly advise the Board of Directors of any such request.
6.3. Extension of Rights. No amendment, alteration or repeal of this
---------------------
Article VI or any provision hereof shall be effective as to any Indemnitee for
acts, events and circumstances that occurred, in whole or in part, before such
amendment, alteration or repeal. The provisions of this Article VI shall
continue as to an Indemnitee whose Corporate Status has ceased for any reason
and shall inure to the benefit of his heirs, executors and administrators.
Neither the provisions of this Article VI nor those of any agreement to which
the Company is a party shall be deemed to preclude the indemnification of any
person who is not specified in this Article VI as having the right to receive
indemnification or is not a party to any such agreement, but whom the Company
has the power or obligation to indemnify under the provisions of the NRS.
6.4. Insurance and Subrogation. The Company shall not be liable under
--------------------------
the Articles of Incorporation or this Article VI to make any payment of amounts
otherwise indemnifiable hereunder if, but only to the extent that, the
Indemnitee has otherwise actually received such payment under any insurance
policy, contract, agreement or otherwise. In the event of any payment
hereunder, the Company shall be subrogated to the extent of such payment to all
the rights of recovery of the Indemnitee, who shall execute all papers required
and take all action reasonably requested by the Company to secure such rights,
including execution of such documents as are necessary to enable the Company to
bring suit to enforce such rights.
6.5. Severability. If any provision or provisions of this Article VI
------------
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Article VI shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.
6.6. Notices. Promptly after receipt by the Indemnitee of notice of
-------
the commencement of any action, suit or proceeding, the Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance pursuant
to the terms of the Articles of Incorporation and this Article VI, notify the
Company of the commencement of such action, suit or proceeding; provided,
however, that any delay in so notifying the Company shall not constitute a
waiver or release by the Indemnitee of rights hereunder and that any omission by
the Indemnitee to so notify the Company shall not relieve the Company from any
liability that it may have to the Indemnitee otherwise than under the Articles
of Incorporation or this Article VI. Any communication required or permitted to
the
10
Company shall be addressed to the Secretary and any such communication to the
Indemnitee shall be addressed to the Indemnitee's address as shown on the
Company's records unless he specifies otherwise and shall be personally
delivered or delivered by overnight mail delivery. Any such notice shall be
effective upon receipt.
6.7. Contractual Rights. The right to be indemnified or to the
-------------------
advancement or reimbursement of expenses (a) is a contract right based upon good
and valuable consideration, pursuant to which the Indemnitee may ▇▇▇ as if these
provisions were set forth in a separate written contract between the Indemnitee
and the Company, (b) is and is intended to be retroactive and shall be available
as to events occurring prior to the adoption of these provisions, and (c) shall
continue after any rescission or restrictive modification of such provisions as
to events occurring prior thereto.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1. Bylaw Amendments. These Bylaws may be amended as provided in the
-----------------
Articles of Incorporation.
7.2. Books and Records. The Company shall keep books and records of
-------------------
account and shall keep minutes of the proceedings of its stockholders, its Board
of Directors and each committee of its Board of Directors.
7.3. Notices; Waiver of Notice. Whenever any notice is required to be
--------------------------
given to any stockholder, director or committee member under the provisions of
the NRS, the Articles of Incorporation or these Bylaws, said notice shall be
deemed to be sufficient if given by deposit of the same in the United States
mail, with postage paid thereon, addressed to the person entitled thereto at his
address as it appears on the records of the Company, and such notice shall be
deemed to have been given on the day of such mailing.
Whenever any notice is required to be given to any stockholder, director or
committee member under the provisions of the NRS, the Articles of Incorporation
or these Bylaws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be equivalent to the giving of such notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
7.4. Resignations. Any director or officer may resign at any time.
------------
Such resignations shall be made in writing and shall take effect at the time
specified therein, or, if no time be specified, at the time of its receipt by
the President or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
7.5. Seal. The seal of the Company shall be in such form as the Board
----
of Directors may adopt.
7.6. Fiscal Year. The fiscal year of the Company shall be determined
------------
by a resolution adopted by the Board of Directors.
7.7. Facsimile Signatures. In addition to the provisions for the use
---------------------
of facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any director or officer of the Company may be used
whenever and as authorized by the Board of Directors.
7.8. Reliance upon Books, Reports and Records. Each director and each
-----------------------------------------
member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Company by any of its officers, or by an
independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Company.
11
ARTICLE VIII
ADOPTION OF BYLAWS
8.1. Adoption. These Bylaws were adopted by the Board of Directors as
--------
of July 27, 2007.
12
EXHIBIT C
ESCROW AGREEMENT
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is made and entered into on August 29, 2007 by and
between MED-X SYSTEMS, INC., a Nevada corporation ("Med-X"), EQUITABLE ASSETS,
INC., a Nevada corporation, the controlling stockholder of Med-X (the "Med-X
Controlling Stockholder"), CRANSTON, INC., a Nevada corporation (the
"Subsidiary"), CRANSTON, INC., a New York corporation ("Cranston"), the Cranston
stockholders being more fully described on the signature page hereof (the
"Cranston Stockholders"), and GLAST, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C. (the "Escrow
Agent").
WHEREAS, Cranston and the Cranston Stockholders and Med-X, the Subsidiary,
and the Med-X Controlling Stockholder have executed that certain Plan and
Agreement of Triangular Merger between Med-X Systems, Inc., Cranston, Inc., a
Nevada corporation, and Cranston, Inc., a New York corporation, dated August 29,
2007 (the "Merger Agreement"); and
WHEREAS, all capitalized terms herein shall have the same meanings as
defined in the Merger Agreement, unless otherwise defined herein; and
WHEREAS, the Cranston Stockholders have delivered into escrow with the
Escrow Agent the sum of $80,000 (the "Escrowed Funds"); and
WHEREAS, 4,188,646 shares of the Med-X Common Stock owned by the Med-X
Controlling Stockholder, together with all shares issued in exchange for
converted debt, have been delivered to the Escrow Agent (the "Escrowed Shares");
NOW, THEREFORE, in consideration of the foregoing and the following mutual
covenants and agreements, the parties hereto do agree as follows:
1. Transfer into Escrow by the Cranston Stockholders. The
------------------------------------------------------
Cranston Stockholders have delivered the Escrowed Funds into escrow with the
Escrow Agent, the receipt of which is hereby acknowledged by the Escrow Agent.
2. Transfer into Escrow by the Med-X Controlling Stockholder. The
----------------------------------------------------------
Med-X Controlling Stockholder has delivered the Escrowed Shares into escrow with
the Escrow Agent, the receipt of which is hereby acknowledged by the Escrow
Agent.
3. Release of the Escrowed Funds. Promptly following the Effective
------------------------------
Date, the Med-X Controlling Stockholder will use its best efforts to do all
things necessary to qualify the shares of the Med-X Common Stock for quotation
and sale on the Over the Counter Bulletin Board maintained by the Nasdaq Stock
Market, Inc. (the "OTCBB"). The Escrowed Funds shall be held in escrow with the
Escrow Agent until such time as the shares of the Med-X Common Stock are quoted
for sale on the OTCBB. Immediately upon receiving notice from the Med-X
Controlling Stockholder and the Cranston Stockholders that the OTCBB has
notified all parties to the Merger Agreement that the shares of the Med-X Common
Stock are being quoted for sale on the OTCBB and are trading on the OTCBB, the
Escrow Agent shall deliver the Escrowed Funds to the Med-X Controlling
Stockholder. In the event that Med-X is unable to procure a trading symbol from
the NASD, due to NASD rejection, within 180 days from the date of the execution
of this agreement, either Cranston or the Med-X Controlling Shareholder shall
have the right to terminate this agreement upon ten (10) days notice to the
other party.
4. Release of the Escrowed Shares. The Med-X Controlling Stockholder
--------------------------------
agrees that the Escrowed Shares may not be sold for a period of 12 months
following the Effective Date. Thereafter, the Escrow Agent shall release the
Escrowed Shares to the Med-X Controlling Stockholder in such amounts which may
then be sold pursuant to the provisions of Rule 144(e) promulgated pursuant to
the Securities Act of 1933, as amended.
5. Duty of the Escrow Agent. The sole duty of the Escrow Agent, other
-------------------------
than as hereinafter specified, shall be to receive the Escrowed Funds and the
Escrowed Shares and hold them subject to release, in accordance with this
Agreement, the Merger Agreement, and the Other Agreements.
6. Liability of the Escrow Agent. The duties of the Escrow Agent
---------------------------------
hereunder will be limited to observance of the express provisions of this
Agreement. Furthermore, the Escrow Agent is not expected or required
1
to be familiar with the provisions of any other writing, understanding or
agreement, and shall not be charged with any responsibility or liability in
connection with the observance or non-observance of the provisions of such other
writing, understanding or agreement, and no implied covenant of any type
whatsoever shall be read into this Agreement.
The further provisions shall govern the Escrow Agent's liabilities
hereunder:
(a) In receiving the Escrowed Funds and the Escrowed Shares, the
Escrow Agent acts only as a depository and thereby assumes no responsibility,
except pursuant to the terms of this Agreement.
(b) The Escrow Agent may act or refrain from acting in respect of
any matter covered by this Agreement in full reliance upon and with the advice
of counsel which may be selected by it, and shall be fully protected in so
acting or in refraining from acting upon the advice of such counsel.
Furthermore, the Escrow Agent may rely and shall be protected in acting upon any
writing that may be submitted to it in connection with its duties hereunder
without determining the genuineness, authenticity or due authority from any such
writing or the person signing same and shall have no liability or responsibility
with respect to the form, content or validity thereof.
(c) The Escrow Agent shall have no responsibility or liability for
any act or omission on its part, notwithstanding any demand or notice to the
contrary by the Med-X Controlling Stockholder or the Cranston Stockholders, or
any other person or entity, all subject to the sole limitation that the Escrow
Agent exercises its best judgment. Except as herein expressly provided, none of
the provisions of this Agreement shall require the Escrow Agent to expend or
risk its own funds or otherwise incur financial liability or expense in the
performance of any of its duties hereunder.
(d) The Escrow Agent is hereby authorized to comply with and obey
all orders, judgments, decrees or writs entered or issued by any court, and in
the event the Escrow Agent obeys or complies with any such order, judgment,
decree or writ, in whole or in part, it shall not be liable to the Med-X
Controlling Stockholder, the Cranston Stockholders, or any other person or
entity, by reason or such compliance, notwithstanding that it shall be
determined that any such order, judgment, decree or writ was entered without
jurisdiction or was invalid for any reason or is subsequently reversed,
modified, annulled, satisfied or vacated.
(e) The Escrow Agent shall not be required to institute or defend
any action or legal process involving any matter referred to herein which in any
manner affects its duties or liabilities hereunder to take any other action with
reference to the Escrowed Funds and the Escrowed Shares not specifically agreed
to herein, and the Escrow Agent shall not be responsible for any act or failure
to act on its part except in the case of its own fraud or gross negligence.
(f) Should any controversy arise between the Escrow Agent, the
Med-X Controlling Stockholder, the Cranston Stockholders, or between any other
person or entity with respect to this Agreement, or with respect to the
ownership of or the right to receive the Escrowed Funds and the Escrowed Shares,
the Escrow Agent shall have the right to institute a plea of interpleader in any
court of competent jurisdiction to determine the rights of the parties. Should
a plea of interpleader be instituted, or should the Escrow Agent become involved
in litigation in any manner whatsoever connected with or pertaining to this
Agreement, the Merger Agreement, the Other Agreements, or the Escrowed Funds and
the Escrowed Shares, the Med-X Controlling Stockholder and the Cranston
Stockholders hereby agree to pay the Escrow Agent, on demand, in addition to any
charge made hereunder for acting as escrow agent, reasonable attorneys' fees
incurred by the Escrow Agent, and any other disbursements, expenses, losses,
costs, and damages in connection with or resulting from such litigation.
7. Indemnification. The Med-X Controlling Stockholder and the Cranston
---------------
Stockholders hereby agree to indemnify and hold the Escrow Agent harmless from
and against any and all claims, loses, liabilities, costs, damages, fees,
charges, and expenses (including attorneys' fees) which the Escrow Agent may
incur or sustain by reason of its acting as the Escrow Agent under this
Agreement, unless same shall result from the fraud or gross negligence of the
Escrow Agent.
2
8. Death, Incapacity, or Resignation of the Escrow Agent. In the
-----------------------------------------------------
event of the death, incapacity, or resignation of the Escrow Agent, the Med-X
Controlling Stockholder and the Cranston Stockholders shall appoint a successor
Escrow Agent within 10 days following such death, incapacity, or resignation. If
the Med-X Controlling Stockholder and the Cranston Stockholders shall fail to
appoint a successor Escrow Agent within such 10 day period, the Med-X
Controlling Stockholder may thereupon deposit the Escrowed Funds and the
Escrowed Shares into the registry of a court of competent jurisdiction, and seek
to have a successor Escrow Agent appointed by such court. Any substitute Escrow
Agent appointed hereunder shall possess and exercise all powers and authority
herein conferred on the original Escrow Agent, unless the court otherwise
decrees in the order of appointment. Further, any successor Escrow Agent shall
receive such compensation as such court may determine. The parties hereto intend
that a substitute Escrow Agent will be appointed to fulfill the duties of the
Escrow Agent hereunder for the remaining term of this Agreement in the event of
the Escrow Agent's death, incapacity, or resignation, and the Med-X Controlling
Stockholder and the Cranston Stockholders will use their best efforts to
promptly appoint a substitute Escrow Agent who shall be bound by the terms and
provisions of this Agreement.
9. Termination and Amendment. This Agreement shall remain in effect
---------------------------
until the Escrowed Funds and the Escrowed Shares are delivered in accordance
herewith; provided that any Escrow Agent hereunder who resigns in accordance
with the terms hereof shall no longer be bound by this Agreement, but this
Agreement, including, but not limited to the indemnification provisions hereof,
shall remain in effect, notwithstanding such resignation, for purposes of
determining the rights and duties of the Med-X Controlling Stockholder, the
Cranston Stockholders, the Escrow Agent, and any successor Escrow Agent. No
amendment or modification to this Agreement shall be in force or effect unless
signed by the parties hereto.
10. No Trusteeship. The Med-X Controlling Stockholder and the Cranston
--------------
Stockholders agree that the Escrow Agent is acting solely as an escrowee
hereunder and not as a trustee and that the Escrow Agent has no fiduciary
duties, obligations or liabilities under this Agreement.
11. Confidentiality. Except as required by applicable law, legal
---------------
process or other legal compulsion, the Escrow Agent shall hold all information
relating to the transactions contemplated by this Agreement in strict confidence
and under no circumstance shall any of the terms and conditions or the
participants involved be disclosed, unless such disclosure is mandated by
applicable law.
12. Mediation and Arbitration. All disputes arising or related to this
-------------------------
Agreement must exclusively be resolved first by mediation with a mediator
selected by the parties, with such mediation to be held in Houston, ▇▇▇▇▇▇
County, Texas. If such mediation fails, then any such dispute shall be resolved
by binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time the arbitration proceeding
commences, except that (a) Texas law and the Federal Arbitration Act must govern
construction and effect, (b) the locale of any arbitration must be in Houston,
▇▇▇▇▇▇ County, Texas, and (c) the arbitrator must with the award provide written
findings of fact and conclusions of law. Any party may seek from a court of
competent jurisdiction any provisional remedy that may be necessary to protect
its rights or assets pending the selection of the arbitrator or the arbitrator's
determination of the merits of the controversy. The exercise of such
arbitration rights by any party will not preclude the exercise of any self-help
remedies (including without limitation, setoff rights) or the exercise of any
non-judicial foreclosure rights. An arbitration award may be entered in any
court having jurisdiction.
13. Attorneys' Fees. In the event that it should become necessary for
----------------
any party entitled hereunder to bring suit against any other party for
enforcement of the covenants contained herein, the parties hereby covenant and
agree that the party who is found to be in violation of this Agreement shall
also be liable to the other parties for all reasonable attorneys' fees and costs
of court incurred by such other parties.
14. Benefit. The terms and provisions of this Agreement shall be
-------
binding upon, inure to the benefit of and be enforceable by, the parties hereto
and their respective successors and permitted assigns.
15. Notices. All notices, requests, demands, and other communications
-------
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, or
by telecopy or e-mail, if to Med-X, the Med-X Controlling Stockholder, and the
Subsidiary, addressed to
3
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopier (▇▇▇) ▇▇▇-▇▇▇▇, and e-mail ▇▇▇@▇-▇▇▇▇.▇▇▇;
and if to Cranston and the Cranston Stockholders, addressed to ▇▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, telephone (800)
▇▇▇-▇▇▇▇, and email ▇▇▇▇@▇▇▇▇▇.▇▇▇; and if to the Escrow Agent, addressed to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq. at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
telephone (▇▇▇) ▇▇▇-▇▇▇▇, telecopier (▇▇▇) ▇▇▇-▇▇▇▇, and e-mail
▇▇▇▇▇▇▇▇▇@▇▇▇-▇▇▇.▇▇▇. Any party hereto may change its address upon 10 days'
written notice to any other party hereto.
16. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. Waiver. No course of dealing on the part of any party hereto or
------
its agents, or any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Agreement or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or privilege shall not preclude any
later exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
18. Representations, Warranties and Agreements to Survive. All
----------------------------------------------------------
indemnity agreements set forth in this Agreement, as well as all
representations, warranties, covenants and other agreements set forth in this
Agreement shall remain operative and in full force and effect at the termination
of this Agreement, and any successor of the parties shall be entitled to the
benefit of the respective representations, warranties and agreements made
herein.
19. Cumulative Rights. The rights and remedies contained in this
------------------
Agreement shall be cumulative and the exercise or partial exercise of any such
right or remedy shall not preclude the exercise of any other right or remedy.
20. Invalidity. In the event any one or more of the provisions
----------
contained in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
21. Headings. The headings used in this Agreement are for convenience
--------
and reference only and in no way define, limit, amplify or describe the scope or
intent of this Agreement, and do not affect or constitute a part of this
Agreement.
22. Excusable Delay. The parties shall not be obligated to perform and
---------------
shall not be deemed to be in default hereunder, if the performance of a
non-monetary obligation required hereunder is prevented by the occurrence of any
of the following, other than as the result of the financial inability of the
party obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, war or war-like action (whether actual,
impending or expected and whether de jure or de facto), acts of terrorists,
arrest or other restraint of government (civil or military), blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or
seizure by any government or public authority, nuclear reaction or radiation,
radioactive contamination or other causes, whether of the kind herein enumerated
or otherwise, that are not reasonably within the control of the party claiming
the right to delay performance on account of such occurrence.
23. No Third-Party Beneficiary. Any agreement to pay an amount and any
--------------------------
assumption of liability contained in this Agreement, express or implied, shall
be only for the benefit of the undersigned parties and their respective
successors and assigns (as herein expressly permitted), and such agreements and
assumptions shall not inure to the benefit of the obligees or any other party,
whomsoever, it being the intention of the parties hereto that no one shall be or
be deemed to be a third-party beneficiary of this Agreement.
4
24. Law Governing; Jurisdiction. This Agreement shall be governed by
-----------------------------
and construed in accordance with the laws of the State of Texas, without regard
to any conflicts of laws provisions thereof. Each party hereby irrevocably
submits to the personal jurisdiction of the United States District Court for the
Southern District of Texas, as well as of the District Courts of the State of
Texas in ▇▇▇▇▇▇ County, Texas over any suit, action or proceeding arising out of
or relating to this Agreement. Each party hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such mediation, arbitration, suit, action
or proceeding brought in any such county and any claim that any such mediation,
arbitration, suit, action or proceeding brought in such county has been brought
in an inconvenient forum.
25. Incorporation by Reference. Any agreement referred to or included
---------------------------
herein constitutes an integral part to this Agreement and is incorporated into
this Agreement by this reference.
26. Controlling Agreement. Other than the provisions of Paragraphs 12
----------------------
and 24 hereof, in the event of any conflict between the terms of this Agreement,
the Merger Agreement, or the Other Agreements, the terms of the Merger Agreement
shall control.
27. Multiple Counterparts. This Agreement may be executed in one or
----------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. A facsimile transmission
or PDF copy of this signed Agreement shall be legal and binding on all parties
hereto.
28. Entire Agreement. This instrument contains the entire
-----------------
understanding of the parties with respect to the subject matter hereof, and may
not be changed orally, but only by an instrument in writing signed by each of
the parties hereto.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the day and year first above written.
MED-X SYSTEMS, INC.
By
------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
EQUITABLE ASSETS, INC.
By
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
CRANSTON, INC. (a Nevada corporation)
By
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Executive Officer
5
CRANSTON, INC. (a New York corporation)
By
------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇, President
GLAST, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
By
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
6
EXHIBIT D
SUBSCRIPTION AGREEMENT
MED-X, INC.
SUBSCRIPTION AGREEMENT
Med-X, Inc.
▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Receipt of Common Stock in connection with a Merger
Gentlemen:
1. Merger. The undersigned hereby agrees to accept shares of the
------
common stock, no par value per share (the "Shares") of Med-X, Inc., a Nevada
corporation (the "Company") indicated below in accordance with the terms of that
certain Plan And Agreement of Triangular Merger (the "Plan of Merger") between
Med-X Systems, Inc., Cranston, Inc., a Nevada Corporation, and Cranston, Inc., a
New York corporation, of even date herewith (the "Offering"). The Plan of
Merger is expressly incorporated herein by reference for all purposes.
The undersigned hereby irrevocably offers to receive ___ Shares in exchange
for ___ shares of the undersigned owned in Cranston, Inc., a New York
corporation.
2. Representations and Warranties of the Investor. The undersigned
--------------------------------------------------
represents and warrants as follows:
(a) The undersigned has received information provided to him in
writing by the Company, or information from books and records of the Company, as
specified below. The undersigned understands that all documents, records and
books pertaining to this investment have been made available for inspection by
him, his attorney and/or his accountant and/or his "Purchaser Representative" as
defined in Regulation D promulgated under the Securities Act of 1933, as amended
(the "Securities Act"), and that the books and records of the Company will be
available, upon reasonable notice, for inspection by investors during reasonable
business hours at the Company's principal place of business. The undersigned
and/or his advisers have had a reasonable opportunity to ask questions of and
receive answers from the Company, or a person or persons acting on its behalf,
concerning the Offering, and all such questions have been answered to the full
satisfaction of the undersigned. No oral representations have been made and, to
the extent oral information has been furnished to the undersigned or his
advisers in connection with the Offering, such information was consistent with
all written information furnished.
(b) Specifically, the undersigned was provided with access to the
Company's filings with the Securities and Exchange Commission, including the
following:
(i) The Company's annual report to stockholders for the most
recent fiscal year, the definitive proxy statement filed in connection with that
annual report, and, if requested by the undersigned in writing, a copy of the
Company's most recent Form 10-KSB under the Securities Exchange Act of 1934, as
amended.
(ii) The information contained in an annual report on Form
10-KSB under the Exchange Act.
(iii) The information contained in any reports or documents
required to be filed by the Company under Sections 13(a), 14(a), 14(c), and
15(d) of the Exchange Act since the distribution or filing of the reports
specified above.
(iv) A brief description of the securities being offered, and
any material changes in the Company's affairs that are not disclosed in the
documents furnished.
1
(c) The undersigned (i) has adequate means of providing for his
current needs and possible personal contingencies, (ii) has no need for
liquidity in this investment, (iii) is able to bear the economic risks of an
investment in the Shares for an indefinite period, and (iv) at the present time,
could afford a complete loss of such investment.
(d) The undersigned recognizes that the Shares as an investment
involves special risks, including those disclosed to the undersigned by the
Company.
(e) The undersigned understands that the Shares have not been nor
will be registered under the Securities Act or the securities laws of any state,
in reliance upon an exemption therefrom for non-public offerings. The
undersigned understands that the Shares must be held indefinitely unless they
are subsequently registered, or an exemption from such registration is
available. The undersigned further understands that the Company is under no
obligation to register the Shares on his behalf or to assist him in complying
with any exemption from registration.
(f) The Shares are being received solely for his own account for
investment and not for the account of any other person and not for distribution,
assignment, or resale to others and no other person has a direct or indirect
beneficial interest in the Shares. The undersigned or his advisers have such
knowledge and experience in financial, tax, and business matters to enable him
to utilize the information made available to him in connection with the Offering
to evaluate the merits and risks of the prospective investment and to make an
informed investment decision with respect thereto.
(g) The undersigned, if a corporation, partnership, trust, or
other entity, is authorized and otherwise duly qualified to receive and hold the
Shares.
(h) All information which the undersigned has provided to the
Company concerning himself, his financial position, and his knowledge of
financial and business matters, or, in the case of a corporation, partnership,
trust or other entity, the knowledge of financial and business matters of the
person making the investment decision on behalf of such entity, is correct and
complete as of the date set forth at the end hereof, and if there should be any
adverse change in such information prior to his subscription being accepted, he
will immediately provide the Company with such information.
(i) The undersigned understands and agrees that the following
restrictions and limitations are applicable to his receipt and his resales,
hypothecations or other transfers of the Shares pursuant to Regulation D under
the Securities Act:
(i) The undersigned agrees that the Shares shall not be sold,
pledged, hypothecated or otherwise transferred unless the Shares are registered
under the Securities Act, and the securities laws of any state or is exempt
therefrom;
(ii) A legend in substantially the following form has been or
will be placed on any certificate(s) or other document(s) evidencing the Shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE
BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY
STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO
THE COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO
THE COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE
COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION
OF THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY
STATE, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
(iii) Stop transfer instructions to the transfer agent of the
Shares have been or will be placed with respect to the Shares so as to restrict
the resale, pledge, hypothecation or other transfer thereof, subject to the
further items hereof, including the provisions of the legend set forth in
subparagraph (ii) above; and
(iv) The legend and stop transfer instructions described in
subparagraphs (ii) and (iii) above will be placed with respect to any new
certificate(s) or other document(s) issued upon presentment by the undersigned
of certificate(s) or other document(s) for transfer.
(j) The undersigned understands that neither the Securities and
Exchange Commission nor the securities commission of any state has made any
finding or determination relating to the fairness for public investment in the
Shares and that the Securities and Exchange Commission as well as the securities
commission of any state will not recommend or endorse any offering of
securities.
(k) The undersigned acknowledges and is aware that it never has
been represented, guaranteed, or warranted to him by the Company, its directors,
officers, agents or employees, or any other person, expressly or by implication,
that the limited past performance or experience on the part of the Company, or
any future projections will in any way indicate the predictable results of the
ownership of the Shares or of the overall financial performance of the Company.
(l) The undersigned acknowledges that
_________________________________ (complete if applicable) has acted as the
"Purchaser Representative" as defined in Regulation D promulgated under the
Securities Act, and (i) that he can bear the economic risk of this investment;
(ii) he has relied upon the advice of the Purchaser Representative as to the
merits of an investment in the Company and the suitability of such investment
for the undersigned; and (iii) the Purchaser Representative has confirmed to
him, in writing, any past, present or future material relationship, actual or
contemplated, between the Purchaser Representative or its affiliates and the
Company or its affiliates.
(m) The undersigned acknowledges that the Company has made
available to him or the Purchaser Representative, if any, or other personal
advisers the opportunity to obtain additional information to verify the accuracy
of the information furnished to him and to evaluate the merits and risks of this
investment.
(n) The undersigned confirms that he has consulted with the
Purchaser Representative, if any, or other personal advisers and that the
Purchaser Representative or other advisers have analyzed the information
furnished to him and the documents relating thereto on his behalf and have
advised him of the business and financial aspects and consequences of and
potential liabilities associated with his investment in the Shares. The
undersigned represents that he has made other risk capital investments or other
investments of a speculative nature, and by reason of his business and financial
experience and of the business and financial experience of those persons he has
retained to advise him with respect to investments of this nature. In reaching
the conclusion that he desires to acquire the Shares, the undersigned has
carefully evaluated his financial resources and investments and acknowledges
that he is able to bear the economic risks of this investment.
(o) The undersigned acknowledges that all information made
available to him and/or the Purchaser Representative, if any, and/or personal
advisers in connection with his investment in the Shares, including the
information furnished to him, is and shall remain confidential in all respects
and may not be reproduced, distributed or used for any other purpose without the
prior written consent of the Company.
(p) The undersigned is an "Accredited Investor" as defined in Rule
501(a) of the Securities Act.
3. Indemnification. The undersigned agrees to indemnify and hold
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harmless the Company and its affiliates from and against all damages, losses,
costs, and expenses (including reasonable attorneys' fees) which they may incur
by reason of the failure of the undersigned to fulfill any of the terms or
conditions of this subscription, or by reason of any breach of the
representations and warranties made by the undersigned herein, or in any
document provided by the undersigned to the Company.
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4. Survival. The foregoing representations, warranties and
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undertakings are made with the intent that they may be relied upon in
determining the undersigned's suitability as an investor in the Company and the
undersigned hereby agrees that such representations and warranties shall survive
his receipt of the Shares. The undersigned hereby acknowledges and agrees that
he is not entitled to cancel, terminate or revoke this Subscription Agreement,
or any agreements hereunder, and that this Subscription Agreement and such
agreements shall survive (a) changes in the transactions, documents, and
instruments previously furnished to the undersigned which are not materially
adverse, and (b) the undersigned's death or disability.
5. Notices. All notices or other communications given or made
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hereunder shall be in writing and shall be delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the undersigned or
to the Company at the respective addresses set forth herein.
6. Miscellaneous.
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(a) Notwithstanding any of the representations, warranties,
acknowledgments, or agreements made herein by the undersigned, the undersigned
does not thereby or in any other manner waive any rights granted to the
undersigned under federal or state securities laws.
(b) Words of any gender used in this Subscription Agreement shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the context
requires otherwise.
(c) In the event of any conflict between the terms of this
Subscription Agreement or the Shares, the terms of this Subscription Agreement
shall control.
(d) This Subscription Agreement contains the entire understanding
of the parties and may not be changed orally, but only by an instrument in
writing signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought.
(e) This Subscription Agreement shall be enforced, governed, and
construed in all respects in accordance with the laws of the State of Texas and
all obligations hereunder shall be deemed performable in Houston, Texas.
IN WITNESS WHEREOF, I have executed this Subscription Agreement as of the
____ day of March, 2007.
---------------------------------
(Signature)
---------------------------------
(Print or Type Name)
---------------------------------
Social Security Number
---------------------------------
Address
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Subscription Accepted this ____ day of March, 2007.
MED-X, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇, President
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