UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C
(Rule
14c-101)
INFORMATION
STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES EXCHANGE ACT OF
1934
Check
the
appropriate box:
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Preliminary
Information
Statement
o
Definitive
Information
Statement
o
Confidential
for Use of
the Commission Only (as permitted by Rule 14c-5(d)(2))
a21,
INC.
(Name
of
Registrant as Specified In Its Charter)
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of Filing Fee (Check the appropriate box):
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fee required
o
Fee
computed on table below per Exchange
Act Rules 14c-5(g) and 0-11.
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(1)
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of each class of securities to which transaction applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is
calculated and state how it was determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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o
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o
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box if any part of the fee is
offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing
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registration statement number, or the form or schedule and the date of its
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(1)
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previously paid:
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Form,
Schedule or Registration Statement No.:
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a21,
INC.
7660
Centurion Parkway
Jacksonville,
Florida 32256
INFORMATION
STATEMENT NOTICE
WE
ARE NOT ASKING YOU FOR A PROXY AND
YOU
ARE REQUESTED NOT TO SEND US A PROXY
Dear
Shareholders:
Notice
is
hereby given that on June 23, 2006, in lieu of a meeting of shareholders,
the
holders of 52.38% of our outstanding common stock adopted resolutions by
written
consent adopting and approving an Agreement and Plan of Merger pursuant to
which
we will change our state of incorporation from the State of Texas to the
State
of Delaware.
The
terms
of the Agreement and Plan of Merger are described in the attached Information
Statement.
You
are
encouraged to carefully read the Information Statement, including the
appendices, for further information regarding these actions. In accordance
with
Rule 14c-2, the approval of the action described herein will be deemed effective
at a date that is 20 days after the date the Definitive Information Statement
has been mailed or furnished to our shareholders. The Definitive Information
Statement is first being mailed or furnished to shareholders on or about
July
____, 2006.
THIS
IS NOT A NOTICE OF A MEETING OF SHAREHOLDERS AND NO SHAREHOLDERS’ MEETING WILL
BE HELD TO CONSIDER THE MATTERS DESCRIBED HEREIN. The
Information Statement is being furnished to you solely for the purpose of
informing shareholders of the matters described herein in compliance with
Regulation 14C of the Securities Exchange Act of 1934, as amended.
By
Order
of the Board of Directors
July
___
, 2006
INFORMATION
STATEMENT
OF
a21,
INC.
7660
Centurion Parkway
Jacksonville,
Florida 32256
THIS
INFORMATION
STATEMENT IS BEING PROVIDED
TO
YOU BY THE BOARD OF DIRECTORS OF
a21,
INC.
THE
COMPANY IS NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO
SEND
A PROXY TO THE COMPANY
This
Information Statement is being mailed or furnished to the shareholders of
a21,
Inc., a Texas corporation (the “Company”), to notify the Company’s shareholders
that, in lieu of a meeting of shareholders, the holders of 52.38% of our
outstanding common stock (the “Common Stock”) adopted resolutions by written
consent (the “Consenting Stockholders”) adopting and approving an Agreement and
Plan of Merger pursuant to which we will change our state of incorporation
from
the State of Texas to the State of Delaware.
Since
52.38% of the Company’s common stock approved the proposals indicated above, all
necessary corporate approvals in connection with the matters referred to
herein
have already been obtained and this Information Statement is being furnished
to
you for information purposes only as required by Section 14(c) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).
The
Definitive Information Statement is first being mailed or furnished to the
shareholders of the Company on or about July ___, 2006. June 23, 2006 was
the
record date for the determination of shareholders entitled to receive the
Information Statement.
The
Company will pay all costs associated with the distribution of this Information
Statement, including the costs of printing and mailing. The Company will
reimburse brokerage firms and other custodians, nominees and fiduciaries
for
reasonable expenses incurred by them in sending this Information Statement
to
the beneficial owners of the Common Stock.
VOTING
SECURITIES
Pursuant
to the Texas Business Corporation Act (“TBCA”), an action that may be taken at a
meeting of shareholders may also be taken without a meeting if a consent
setting
forth the action taken has been signed by all the holders of the corporation’s
shares entitled to vote on the matter, provided that a corporation’s Articles of
Incorporation may provide that an action by written consent may be taken
by the
holders of shares having not less than the minimum number of votes that would
be
necessary to take such action at a meeting at which holders of all shares
entitled to vote are present and vote. The Company’s Articles of Incorporation
do provide that the Company’s shareholders may take action by the written
consent of holders of shares having not less than the minimum number of votes
that would be necessary to take such action at a meeting at which holders
of all
shares entitled to vote are present and vote. In addition, pursuant to the
TBCA,
the vote of shareholders required for approval of a plan of merger or exchange
is the affirmative vote of the holders of at least two-thirds of the outstanding
shares of the Company entitled to vote on the matter, unless any class or
series
of shares of the Company is entitled to vote as a class on the matter, in
which
event the vote required for approval by the shareholders of the Company is
the
affirmative vote of the holders of at least two-thirds of the outstanding
shares
within each class or series of shares entitled to vote on the matter as a
class
and at least two-thirds of the outstanding shares otherwise entitled to vote
on
the matter. The TBCA provides, however, that a corporation’s articles of
incorporation may provide that the affirmative vote of the holders of a
specified portion, but not less than a majority, of the shares (or of any
class
or series) entitled to vote on the plan of merger or exchange is the vote
required, rather than two-thirds of the outstanding shares (or of any class
or
series) of the corporation, as otherwise required by the TBCA. The Company’s
Articles of Incorporation do provide that the vote of shareholders required
for
approval of a plan of merger shall be the affirmative vote of the holders
of a
majority of the outstanding shares (or of any class or series) entitled to
vote
on the matter. Therefore, a majority of the shares of the Company’s common stock
were required to execute the written consent for the action to be effective.
As
of June 20, 2006, there were 77,622,624 shares of Common Stock outstanding,
of
which 38,811,313 shares were required to execute the consent in order to
pass
the stockholder resolution approving the action described herein. Each holder
of
Common Stock is entitled to one vote for each share held by such holder.
The
Consenting Stockholders voted in favor of the actions described herein in
a
written consent, dated June 23, 2006, attached hereto as Appendix
A.
The
Consenting Stockholders are collectively the record owners of 40,658,362
shares,
which represents 52.38% of the issued and outstanding shares of the Company’s
Common Stock. No consideration was paid for the consent. No shares of the
Company’s preferred stock are currently outstanding.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
AND MANAGEMENT
The
following table sets forth, as of June 20, 2006 each person known by us to
be
(i) the beneficial owner of more than five percent of the Common Stock, (ii)
each of our directors, (iii) each of our executive officers, and (iv) all
of our
directors and executive officers as a group. Except as noted, each person
has
sole voting and investment power with respect to the shares shown.
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Name
and Address of
Beneficial
Owner
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Amount
of Beneficial Ownership (1)
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Percentage
of Class
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Albert
H. Pleus
c/o
a21, Inc.
7660
Centurion Parkway
Jacksonville,
Florida 32256
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6,818,607
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(2)
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8.48%
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Thomas
V. Butta
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2,160,950
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(3)
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2.76%
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Thomas
Costanza
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41,250
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(4)
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0.05%
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Susan
Chiang
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1,527,080
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(5)
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1.94%
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Ardell
D. Albers
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170,000
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(6)
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0.22%
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Luke
A. Allen
711
Fifth Avenue
New
York, NY 10022
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7,520,123
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(7)
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9.26%
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Vincent
C. Butta
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1,335,500
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(8)
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1.71%
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Philip
N. Garfinkle
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459,250
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(9)
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0.59%
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C.
Donald Wiggins
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290,000
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(10)
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0.37%
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Clonure
Limited
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4,479,721
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(11)
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5.77%
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LCA
Capital Partners I, Inc.
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c/o
Luke A. Allen
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711
Fifth Avenue
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New
York, NY 10022
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6,364,624
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(12)
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7.86%
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Jonathan
Gallen
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Ahab
Capital Management, Inc.
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299
Park Avenue
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New
York, NY 10171
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23,276,922
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(13)
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28.84%
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StarVest
Partners L.P.
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750
Lexington Avenue
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New
York, NY 10022
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17,115,385
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(14)
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20.81%
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Morgan
Stanley & Co., Inc.
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1585
Broadway
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New
York, NY 10036
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7,692,508
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(15)
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9.02%
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All
Directors and Executive Officers as a Group (9 Persons)
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20,322,760
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(2)-(10)
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23.52%
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| (1)
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Under
the rules of the SEC, a person is deemed to be the beneficial owner
of a
security if such person has or shares the power to vote or direct
the
voting of such security or the power to dispose or direct the disposition
of such security. A person is also deemed to be a beneficial owner
of any
securities if that person has the right to acquire beneficial ownership
within 60 days of the date from which beneficial ownership is calculated.
Except as otherwise indicated the named entities or individuals have
sole
voting and investment power with respect to the shares of common
stock
beneficially owned.
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| (2)
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Includes:
options to purchase 2,105,514 shares; 1,046,338 shares held by Whitney
Holdings, Inc. and 533,334 shares held by Whitney Holdings Group
LLC,
which are controlled by Mr. Pleus; 133,334 shares held by the Albert
Pleus
Family Trust of which Mr. Pleus is trustee; and warrants held by
Whitney
Holdings, Inc. to purchase 633,420 shares. Excludes 2,996,524 shares
and
warrants to purchase 3,368,100 shares held by LCA Capital Partners
I,
Inc., in which Mr. Pleus is a minority shareholder and does not have
either voting or investment power.
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| (3)
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Includes
50,000 shares held by Mr. Butta’s immediate family and options and
warrants to purchase 625,950 shares.
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| (4)
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Consists
of options to purchase 41,250 shares.
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| (5)
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Includes
options and warrants to purchase 242,436 shares and participating
preferred shares of SuperStock, Inc., a subsidiary of a21, that are
exchangeable into 926,331 shares. Also includes 7,464 common shares,
warrants to purchase 1,140 shares and participating preferred shares
of
SuperStock, Inc., a subsidiary of a21, that are exchangeable into
60,591
shares, all held by Ms. Chiang’s immediate
family.
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| (6)
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Includes
options to purchase 75,000 shares.
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| (7)
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Includes
options to purchase 140,000 shares and 2,996,524 shares and warrants
to
purchase 3,368,100 shares held by LCA Capital Partners I, Inc., which
is
controlled by Mr. Allen.
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| (8)
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Includes
options to purchase 250,000 shares.
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| (9)
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Includes
options or warrants to purchase 190,000 shares.
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| (10) |
Includes
options to purchase 120,000 shares.
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| (11)
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John
Bohill and Cathal Sheehy jointly make all decisions with respect
to
Clonure Limited.
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| (12)
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Consists
of 2,996,524 shares and warrants to purchase 3,368,100 shares held
by LCA
Capital Partners I, Inc. which is controlled by Mr. Allen. Excludes
any
shares beneficially owned by Mr. Allen
individually.
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| (13)
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Consists
of 9,090,000 shares held by Ahab Partners, L.P.; 11,110,000 shares
held by
Ahab International Ltd.; 2,307,692 shares upon the conversion of
$1.5
million of convertible secured notes held by Queequeg Partners, L.P.;
and
769,230 shares upon the conversion of $.5 million of convertible
secured
notes held by Queequeg Ltd. Jonathan Gallen has the sole power to
vote and
direct the disposition of the shares held by Ahab Partners, L.P.,
Ahab
International Ltd., Queequeg Partners, L.P. and Queequeg,
Ltd.
|
| (14)
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Deborah
Farrington, Jeanne Sullivan and Laura Sachar possess voting and
dispositive power over the shares held by StarVest Partners, L.P.
which
include 4,615,385 shares upon the conversion of $3 million of convertible
secured notes held by StarVest Partners,
L.P.
|
| (15)
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Thomas
Doster has the sole voting and dispositive power over the shares
held by
Morgan Stanley & Co., Inc. which consists of 7,692,308 shares upon the
conversion of $5.0 million of convertible secured notes held by Morgan
Stanley & Co., Inc.
|
ACTIONS
BY THE BOARD OF DIRECTORS AND
THE
CONSENTING SHAREHOLDERS
The
Change in State of Organization from Texas to Delaware
On
June
19, 2006, a21’s Board of Directors approved a merger agreement (the “Merger
Agreement”) pursuant to which, among other things, the Company would merge with
and into its wholly owned subsidiary, a21,Inc., a Delaware corporation (the
“Reincorporation Merger”). A copy of the resolutions of the Board of Directors
approving the terms of the Reincorporation Merger is attached as Appendix
B.
On June
23, 2006, the Company obtained the Consenting Stockholders’ approval of the
terms of the Merger Agreement. A copy of the Consenting Stockholders’ written
consent is attached as Appendix
A.
General
The
following discussion summarizes certain aspects of our proposed reincorporation
into the State of Delaware. This summary is not intended to be complete and
is
subject to, and qualified in its entirety by, reference to the following:
-
the
Certificate of Incorporation and Bylaws of the merger subsidiary, which will
become a21’s certificate of incorporation and by-laws upon filing of the
certificate of merger with the Secretary of State of the States of Delaware
and
Texas after effectiveness of the consent of the shareholders, attached as
Appendix
C;
-
the
Agreement and Plan of Merger attached as Appendix
D;
and
-
the
Comparison of Texas and Delaware Corporation Law attached as Appendix
E.
Copies
of
our current Articles of Incorporation and Bylaws are available for inspection
at
our principal executive offices and copies will be sent to shareholders,
without
charge, upon oral or written request directed to our corporate secretary.
Principal
Features of the Reincorporation
The
reincorporation will be effected by the merger of the Company with and into
the
merger subsidiary, a21, Inc., a Delaware corporation, which has been
incorporated in Delaware solely for the merger. The merger subsidiary will
be
the surviving corporation. The separate existence of the Company will cease
as a
result of the merger.
Upon
completion of the merger, each of the Company’s outstanding shares of Common
Stock will be converted into one share of common stock of the surviving
corporation, with each share having rights, privileges, qualifications,
limitations and restrictions equivalent to the rights, privileges,
qualifications, limitations and restrictions as they currently have. The
Company’s existing shareholders will automatically become stockholders of the
surviving corporation. The Company’s stock certificates will represent the same
number of the surviving corporation’s shares as were represented by the stock
certificates prior to the merger.
Our
reincorporation in Delaware will not result in any change to our business
operations or the location of our principal executive offices. The financial
condition and results of operations of the surviving corporation immediately
after the consummation of the merger will be identical to the Company’s
immediately prior to the consummation of the merger. In addition, at the
effective time of the merger, the board of directors of the surviving
corporation will consist of those persons who were the Company’s directors
immediately prior to the merger and individuals serving as executive officers
of
the Company immediately prior to the merger will continue to serve as executive
officers of the surviving corporation after the merger.
Corporate
Name and Trading Symbol
Following
the merger, we will retain our corporate name "a21, Inc.". Accordingly, we
expect our shares are expected to continue to trade on the OTC Bulletin Board
under the symbol "ATWO."
Principal
Reasons for the Reincorporation
As
the
Company grows, the Board of Directors believes that it is important for the
Company to be able to rely on well-established principles of corporate
governance in making legal and business decisions and the Delaware corporate
law
is well established and understood.
The
State
of Delaware has adopted comprehensive, modern and flexible corporate laws
that
are frequently updated and revised to meet changing business needs. Because
of
Delaware's prominence as a state of incorporation for many corporations,
the
Delaware courts have developed considerable expertise in dealing with corporate
issues and a substantial body of case law has developed with respect to
corporations incorporated in Delaware. We believe that reincorporating in
Delaware should enable us to better predict the legal consequences of our
business decisions.
In
addition, the Company believes that reincorporation under Delaware law will
enhance our ability to attract and retain qualified independent directors
because the law of Delaware offers greater certainty and stability from the
perspective of those who serve as corporate directors. To date, we have not
experienced difficulty in attracting or retaining directors. However, we
believe
that the better understood, and comparatively more stable, corporate environment
afforded by Delaware will enable us to maintain and improve our ability to
attract capable and experienced individuals to our Board of Directors.
Possible
Disadvantages of Reincorporation
There
are
a number of substantive differences between the Delaware General Corporation
Law
(“DGCL”) and the TBCA, and in some circumstances, stockholder rights might be
more restricted under the DGCL. For example, unlike the TBCA, the DGCL does
not
require that stockholders are entitled to call a special meeting, and,
accordingly, the surviving corporation’s certificate of incorporation and
by-laws do not enable stockholders to call special meetings. For information
regarding this and other material differences between the TBCA and the DGCL
and
the respective charter and bylaws of the Company and the surviving corporation,
please read Appendix
E
. We
believe that the advantages of the reincorporation to the Company and its
shareholders outweigh its possible disadvantages.
SHAREHOLDERS
ARE STRONGLY URGED TO READ THE SUMMARY OF CERTAIN SIGNIFICANT DIFFERENCES
BETWEEN THE TBCA AND THE DGCL RELATING TO THE RIGHTS AND INTERESTS OF
SHAREHOLDERS SET FORTH IN APPENDIX
E.
Effective
Date of Merger
The
Company anticipates that the reincorporation will become effective at the
earliest practicable date, but at least 20 days after this Information Statement
has been sent to shareholders.
Federal
Income Tax Consequences Of The Reincorporation
We
believe that, for Federal income tax purposes, no gain or loss will be
recognized by the holders of Common Stock of the Company as a result of the
consummation of the reincorporation and no gain or loss will be recognized
by
the Company or the surviving corporation. Each holder of Common Stock of
the
Company will have the same tax basis in the common stock of the surviving
corporation received pursuant to the reincorporation as such shareholder
had in
the Common Stock of the Company held immediately prior to the reincorporation,
and the shareholder's holding period with respect to the common stock or
of the
surviving corporation will include the period during which such shareholder
held
the corresponding Common Stock of the Company, so long as such Common Stock
was
held as a capital asset at the time of consummation of the reincorporation.
ALTHOUGH
IT IS NOT ANTICIPATED THAT STATE OR LOCAL INCOME TAX CONSEQUENCES TO
SHAREHOLDERS WILL VARY FROM THE FEDERAL INCOME TAX CONSEQUENCES DESCRIBED
ABOVE,
SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE EFFECT OF THE
REINCORPORATION UNDER STATE, LOCAL OR FOREIGN INCOME TAX LAWS.
We
also
believe that the surviving corporation will succeed without adjustment to
the
federal tax attributes of the Company.
Exchange
of Stock Certificates
The
reincorporation will not affect the validity of the currently outstanding
stock
certificates. Consequently, it will not be necessary for shareholders to
exchange their stock certificates for stock certificates of the surviving
corporation.
Effect
on Option and Other Employee Benefit Plans
Our
option plans will be continued by the surviving corporations and each option
with respect to Company shares granted pursuant to such plans will automatically
convert into an option with respect to the same number of shares of the
surviving corporation, upon the same terms and subject to the same conditions
as
set forth in the plans. Other employee benefit plans and arrangements will
be
continued by the surviving corporation upon the terms and subject to the
conditions currently in effect. The reincorporation merger will not result
in
the acceleration of benefits under any of the Company's option or benefit
plans.
Increase
in Authorized Capitalization
The
Board
of Directors has determined that it is in the best interests of the Company
and
its shareholders to increase the authorized capitalization in connection
with
the merger. Accordingly, the certificate of incorporation of the merger
subsidiary provides for an authorized capitalization of 200,000,000 shares
of
common stock and 100,000 shares of preferred stock. The Company's current
authorized capitalization consists of 100,000,000 shares of Common Stock
and
100,000 shares of preferred stock.
The
Board
of Directors believes that it is in the best interests of the Company and
its
shareholders to increase the number of authorized but unissued shares of
common
stock (i) to permit the purchasers of the Company’s convertible debt to exercise
their convertible debt into shares of the common stock of the surviving
corporation (ii) to permit the Company to issue shares of common stock of
the
surviving corporation to the selling stockholders of ArtSelect, Inc., a company
that the Company recently acquired, and to permit such stockholders to exercise
warrants for common stock granted to them in connection with that merger
and
(iii) to make additional shares available to meet the surviving corporation's
future business needs as they arise. As of June 20, 2006, 77,622,624 shares
of
Common Stock were issued and outstanding. In addition, the Company has reserved
approximately 9,000,000 shares of Common Stock for issuance pursuant to the
Company's equity compensation plans, pursuant to options and warrants. No
shares
of the Company’s preferred stock were outstanding.
Convertible
Debt Financing
On
April
27, 2006, the Company and SuperStock, Inc., a Florida corporation and subsidiary
of the Company, entered into a Securities Purchase Agreement with the purchasers
listed on Exhibit A thereto (the “Purchase Agreement”), pursuant to which the
Company and SuperStock jointly issued $15,500,000 of 5% Senior Secured
Convertible Notes (the “Senior Notes”) in consideration for which the Companies
received $10,978,964 in cash, after payments to retire warrants to purchase
637,500 shares of the Company’s common stock, the repayment of certain
outstanding debt in the aggregate amount of $4,206,123 (principal and interest
and of which $722,326 was off balance sheet) and the payment of a finders
fee of
$100,000 to Axiom Capital Management in connection with the issuance of one
of
the Senior Notes.
The
Senior Notes are secured by substantially all of the assets of the Company
and
SuperStock (except as described below under “Acquisition of ArtSelect”) and,
after the Company increases the number of shares of its authorized common
stock
(which will be accomplished through the merger of which this Information
Statement relates), will be convertible into the Company’s common stock at a
minimum conversion price of $0.65 per share, subject to adjustment as provided
in the Senior Notes. In addition, the conversion price of the Senior Notes
may
be adjusted based on a weighted average anti-dilution formula in the event
of
issuances of the Company’s common stock at a price per share below $0.65,
provided that the conversion price may not be reduced below $0.50 pursuant
to
such anti-dilution provisions. The interest on the Senior Notes is payable
quarterly in arrears, and the principal will be due and payable on March
31,
2011. If the 45 day volume weighted average price of the Company’s common stock
equals or exceeds $1 per share, the Senior Notes will automatically be converted
into the Company’s common stock under certain conditions.
The
Senior Notes include customary events of default, including the failure of
the
Company or SuperStock to pay any principal or interest when due, the breach
of
any covenant or term or condition of the Senior Notes, the breach of any
representation or warranty in the Purchase Agreement, Senior Notes or other
documents executed in connection with the transactions contemplated thereby,
defaults in the performance of any other indebtedness of greater than $500,000,
the insolvency or bankruptcy of the Company or SuperStock and the SEC issuing
a
stop trade order or suspension of trading relating to the Company’s common
stock. Upon the occurrence of an event of default, each Senior Note will
become
due and payable, either upon notice from the agent for the holders of Senior
Notes at the direction of the holders of a majority of the outstanding principal
amount of the Senior Notes or automatically, depending on the particular
event
of default.
Pursuant
to the terms of the Purchase Agreement, for so long as StarVest Partners,
LP
beneficially owns at least 8,000,000 shares of the Company’s common stock, the
Company must nominate StarVest’s designee for a position on the Company’s Board
of Directors. In addition, for so long as at least 40% of the aggregate
principal amount of the Senior Notes are outstanding, the Company may not,
without the prior written consent of the agent, engage in certain activities
or
transactions, including, but not limited to, declaring dividends, liquidating,
dissolving, effecting a reorganization or change of control, or incurring
certain indebtedness. The Purchase Agreement also provides that the purchasers
have a pro-rata right to provide up to 25% of the amount of any additional
financing the amount of which will be in excess of $2,000,000.
The
Company also entered into a Registration Rights Agreement dated April 27,
2006,
between the Company and the agent for the Senior Note holders, on its own
behalf
and on behalf of the holders of the holders of Senior Notes (the “Registration
Rights Agreement”). Pursuant to the Registration Rights Agreement, if the SEC
has not declared effective a registration statement relating to the resale
of
the shares of the Company’s common stock that the Senior Notes are convertible
into by January 22, 2007, the Company will be obligated to pay the holder
of the
Senior Notes liquidated damages as provided in the Registration Rights
Agreement.
Acquisition
of ArtSelect
On
May
16, 2006, AE Acquisition Corp., a wholly owned subsidiary of the Company,
merged
with and into ArtSelect, Inc. ArtSelect became a wholly owned subsidiary
of the
Company pursuant to the merger. ArtSelect supplies home and office framed
and
unframed wall décor to retailers, catalogers, membership organizations and
consumers through both online and traditional retail and wholesale distribution
channels. The Company intends to continue to use ArtSelect's assets to continue
the Business.
In
consideration for merger, the shareholders of ArtSelect received an aggregate
of
$4,500,000 of cash, $2,350,000 in secured notes (the “ArtSelect Notes”) and
$3,150,000 of Series A Preferred Stock (the “Preferred Stock”).
The
ArtSelect Notes bear interest at 6% per year and mature on the earlier to
occur
of a change of control (as set forth in the Notes) and May 15, 2009. The
first
year of interest on the principal balance of the ArtSelect Notes will be
accrued
and added to the principal thereof. After the first year, interest will be
payable quarterly, in arrears. The ArtSelect Notes are secured by substantially
all the assets of ArtSelect (provided that, with respect to up to $3,000,000
of
the assets of ArtSelect, the ArtSelect Notes are junior to certain
previously issued secured convertible notes).
The
Preferred Stock has certain liquidation preferences and, pursuant to an exchange
agreement entered into with each of the holders of Preferred Stock (the
“Exchange Agreement”), after the Company increases the number of its authorized
shares of common stock, is exchangeable for the Company’s common stock at a
minimum price per share of $0.75, subject to adjustment pursuant to weighted
average anti-dilution provisions contained in the transaction documents.
On May
16, 2006, the holders of Preferred Stock exchanged all of the Preferred Stock
for an aggregate of 4,200,000 shares of the Company’s common stock at a per
share price of $0.75 (the “Exchange Stock”). Pursuant to the terms of the
Exchange Agreement, the Exchange Stock will not be issued by the Company
until
it increases the number of authorized shares of its common stock to accommodate
such exchange.
The
shareholders of ArtSelect also received warrants to purchase 750,000 shares
of
the Company’s common stock at $1.00 per share (the “Warrants”), exercisable for
common stock only after the Company increases its authorized shares of common
stock. The Warrants expire four years from the closing date of the merger.
Other
reasons for the increase in authorized shares of common
stock
In
addition to compensating the stockholders of ArtSelect in connection with
the
merger, among other things, the proposed increase in the surviving company's
authorized capitalization will make shares available for future activities
that
are consistent with the surviving corporation's business strategy, including,
without limitation, the following:
-
the
acquisition of or investment in complementary businesses;
-
the
continued provision of equity incentives to employees, officers and directors
under the surviving corporation's equity compensation plans;
-
the
conversion of the surviving corporation's convertible securities;
and
-
the
completion of financings.
The
Company is currently in discussions with potential acquisition candidates.
Although the Company has not yet entered into any binding agreements, if
such
transactions are approved, shares of common stock or securities convertible
into
common stock of the surviving corporation may be issued as at least partial
consideration for the acquisition. In addition, depending on its need for
additional capital and its view of the capital markets, the surviving
corporation may issue some portion of the additional authorized shares of
common
stock or securities convertible into common stock for cash. Furthermore,
in
accordance with its business strategy, the surviving corporation may make
future
acquisitions and may use its common stock or securities convertible into
common
stock in such acquisitions if appropriate opportunities arise.
If
the
shareholders approve the merger, the Board of Directors may cause the issuance
of the additional shares of common stock without further vote of the surviving
corporation's stockholders, except as provided under the surviving corporation's
certificate of incorporation, the DGCL, the rules of any securities exchange
on
which the shares of common stock may at such time be listed or any other
applicable laws, rules or regulations. Subject to the differences between
the
TBCA and the DGCL and the charter and bylaws of the Company and the surviving
corporation set forth in Appendix
E
to this
Information Statement, the additional shares of common stock would be identical
to the shares of Common Stock now authorized. Holders of Common Stock do
not
have preemptive or similar rights, which means that current holders of Common
Stock do not have a prior right to purchase any new issue of common stock
by the
surviving corporation to maintain their respective percentage ownership thereof.
The issuance of additional shares of common stock by the surviving corporation
would decrease the proportionate ownership interest of the current holders
of
Common Stock and, depending upon the price paid for such additional shares,
could result in dilution to such holders. The additional shares of common
stock
could be used for purposes that might be deemed to be in defense of a potential
takeover threat. Such shares could be sold to purchasers who might side with
the
board of directors in opposing a takeover bid that the board of directors
determines not to be in the best interests of the surviving corporation and
its
stockholders. The issuance of new shares could discourage persons seeking
to
gain control of the surviving corporation in other ways as
well.
The
foregoing terms were approved by the Board of Directors of the Company and
the
Consenting Stockholders.
Effective
Date
Under
applicable federal securities laws, the Consenting Stockholder’s authorization
of the reincorporation cannot be effective until at least 20 calendar days
after
the Definitive Information Statement is distributed to the Company’s
shareholders.
Dissenters’
Right of Appraisal
The
TBCA
gives each of the Company’s shareholders the right to object to the merger and
to demand payment of the fair value of his shares calculated as of the day
the
written consent, excluding any appreciation or depreciation in anticipation
of
the merger.
The
surviving corporation must, within 10 days after the date the merger is
effected, mail to each shareholder notice of the fact and date of the merger
and
that the shareholder may exercise his right to dissent from the action. The
notice must be accompanied by a copy of Article 5.12 of the TBCA and any
articles or documents filed by the Company with the Secretary of State to
effect
the merger. If the shareholder has not have consented to the merger, the
shareholder may, within 20 days after the mailing of the notice, make written
demand on the surviving corporation for payment of the fair value of the
shareholder’s shares. The demand must state the number and class of shares owned
by the dissenting shareholder and the fair value of the shares as estimated
by
the shareholder. Any shareholder failing to make demand within the 20 day
period
loses the right to receive the fair market value of her or his
shares.
Within
20
days after receipt by the surviving corporation of a demand, the surviving
corporation must send to the dissenting shareholder a written notice that
the
surviving corporation will, within 90 days after the date the merger is
effected, either: (i) pay the amount claimed upon the surrender of the duly
endorsed certificates; or (ii) pay some other amount as the fair value, if,
within 60 days after the date the merger was effected, the dissenting
shareholder notifies the Company the shareholder will accept that amount
in
exchange for surrender of the shareholder’s duly endorsed certificates. If the
surviving corporation and the dissenting shareholder agree upon the fair
value,
that value will be paid and the dissenting shareholder will cease to have
any
interest in the shares or the surviving corporation. If agreement as to the
fair
value cannot be reached, either the dissenting shareholder or the surviving
corporation may, within the time limits prescribed by Article 5.12 of the
TBCA,
file a petition in a court of competent jurisdiction in Travis County, Texas,
asking for a finding and determination of the fair value of the shares. Court
costs will be allocated between the parties in such manner as the court
determines to be fair and equitable.
Articles
5.11, 5.12 and 5.13 of the TBCA are reproduced in full as Appendix
F.
SECURITY
HOLDERS
SHARING AN ADDRESS
The
Company will deliver only one copy of this Information Statement to multiple
shareholders sharing an address unless the Company has received contrary
instructions from one or more of the shareholders. Furthermore, the Company
undertakes to deliver promptly, upon written or oral request, a separate
copy of
the Information Statement to a shareholder at a shared address to which a
single
copy of the Information Statement is delivered. A shareholder can notify
us that
the shareholder wishes to receive a separate copy of the Information Statement
by contacting the Company at: a21, Inc., 7660 Centurion Parkway, Jacksonville,
Florida 32256,
Attn:
Thomas Costanza, Chief Financial Officer, or by contacting the Company via
telephone at (904) 565-0066. Conversely, if multiple shareholders sharing
an
address receive multiple Information Statements and wish to receive only
one,
such shareholders can notify the Company at the address or phone number set
forth above.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION ABOUT THE COMPANY
The
Company is subject to the information requirements of the Exchange Act, and
in
accordance therewith files reports, proxy statements and other information
including annual, quarterly and current reports on Forms 10-KSB, 10-QSB and 8-K
with the Securities and Exchange Commission (“SEC”). Reports and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained at the SEC at 100 F Street, N.E., Washington,
DC
20549. Copies of such material can be obtained upon written request addressed
to
the SEC, Public Reference Section, 100 F Street, N.E., Washington, DC 20549,
at
prescribed rates. You may obtain information on the operation of the SEC’s
Public Reference Room by calling the SEC at (800) SEC-0330. The SEC also
maintains a web site on the Internet (http://www.sec.gov) where the Company’s
reports, proxy and information statements and other information regarding
the
Company may be obtained free of charge.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
| (1)
|
The
Company’s Amended Annual Report on Form 10-KSB/A for the year ended
December 31, 2005;
|
| (2)
|
The
Company’s Quarterly Report on Form 10-QSB for the quarter ended March 31,
2005;
|
| (3)
|
The
Company’s Current Report on Form 8-K dated May 15, 2006;
and
|
| (4)
|
The
Company’s Amended Current Report on Form 8-K/A dated May 15,
2006.
|
By
Order
of the Board of Directors
July
____, 2006
Appendix
A
WRITTEN
CONSENT OF THE
STOCKHOLDERS
OF
a21,
INC.
The
undersigned, constituting the holders of at least a majority of the outstanding
capital stock of a21, Inc., a Texas corporation (the “Company”), adopt the
following resolutions by written consent in lieu of a meeting, pursuant to
provisions of the Texas Business Corporation Act and the Company’s Articles of
Incorporation:
WHEREAS,
the
Board of Directors (the “Board”) of the Company approved, the reincorporation of
the Company from Texas to Delaware (the “Reincorporation”) at a meeting of the
Board held on June 19, 2006; and
WHEREAS,
the
Board approved the form of Agreement and Plan of Merger (the “Merger Agreement”)
providing for the merger of the Company with and into a21, Inc., a Delaware
corporation and a wholly owned subsidiary of the Company (the “Surviving
Corporation”) presented to the stockholders signatory hereto on the date hereof;
and
WHEREAS,
pursuant to the terms of the Merger Agreement, each outstanding share of
the
Company’s common stock will become one outstanding share of the Surviving
Corporation’s common stock; and
WHEREAS,
pursuant to the terms of the Merger Agreement, each officer and director
of the
Company will become an officer and director of the Surviving Corporation;
and
WHEREAS,
upon
consummation of the merger in accordance with the Merger Agreement, the
Surviving Corporation will have 200,000,000 shares of its common stock and
100,000 shares of its preferred stock authorized for issuance; and
WHEREAS,
the
Company is required to obtain stockholder approval of the Merger Agreement;
NOW,
THEREFORE BE IT;
RESOLVED,
that
the Merger Agreement, in the form previously presented to the undersigned
be,
and hereby is, approved, and that the Company’s Board of Directors and officers
are hereby authorized and directed to proceed with the Reincorporation and
the
consummation the transactions contemplated by the Merger Agreement, provided
that if, in the judgment of the Board of Directors, it would not be in the
Company’s best interests to proceed with the Reincorporation or the consummation
of the transactions contemplated by the Merger Agreement, the Board of Directors
may vote to not proceed with the Reincorporation or the other transaction
contemplated by the Merger Agreement; and it is further
RESOLVED,
that
the
officers of the Company be, and each of them individually hereby is, authorized,
empowered and directed, in the name of, and on behalf of, the Company, to
take
all such further action as they, or any of them, may deem necessary or
appropriate to carry out the purpose and intent of the foregoing
resolutions.
IN
WITNESS WHEREOF:
| |
|
|
| |
AHAB
PARTNERS, L.P. |
|
Date:
___________________
|
By: |
Pequod
LLC, its General Partner |
| |
|
|
| |
By: |
|
| |
Name: Jonathan Gallen
Title: Managing
Member
|
| |
|
|
| |
AHAB
INTERNATIONAL, LTD. |
|
Date:
___________________
|
By: |
Ahab
Capital Management, Inc., its Investment
Advisor |
| |
|
|
| |
By: |
|
| |
Name: Jonathan Gallen
Title: President
|
| |
|
|
| |
STARVEST
PARTNERS, L.P. |
|
Date:
___________________
|
By: |
StarVest
Associates, LLC, its General Partner |
| |
|
|
| |
By: |
|
| |
Name: Deborah A. Farrington
Title: Managing
Member
|
| |
|
|
| |
LCA
CAPITAL PARTNERS I, INC. |
|
|
|
|
| |
|
|
|
Date:
___________________
|
By: |
|
| |
Name: Luke A. Allen
Title:
President
|
| |
|
|
|
Date:
___________________
|
|
|
| |
|
| |
|
|
|
Date:
___________________
|
|
|
| |
Albert
H. Pleus
|
| |
|
|
| |
WHITNEY
HOLDINGS, INC. |
|
|
|
|
Date:
___________________
|
By: |
|
| |
Name:
Albert H. Pleus
Title: President
|
| |
|
|
| |
WHITNEY
HOLDINGS GROUP, LLC |
|
|
|
|
Date:
___________________
|
By: |
|
| |
Name:
Albert H. Pleus
Title: Managing
Member
|
Appendix
B
WHEREAS,
the
Board of Directors of the Corporation has determined that it would be in
the
best interests of the Corporation to reincorporate from the State of Texas
to
the State of Delaware; and
WHEREAS,
the
officers of the Corporation have formed a wholly owned subsidiary of the
Corporation, a21, Inc., a Delaware corporation (the “Subsidiary”);
NOW,
THEREFORE, IT IS:
RESOLVED,
that
the Agreement and Plan of Merger attached hereto as Exhibit A (the “Merger
Agreement”), providing for the merger of the Corporation with and into the
Subsidiary, with the Subsidiary being the “Surviving Corporation” is hereby
adopted and approved in all respects; and it is further
RESOLVED,
that
the Merger Agreement, together with such other terms, provisions, covenants,
warranties and conditions as are normal and customary for a transaction of
this
type and as deemed necessary or appropriate by the proper officers of the
Corporation with the advice of counsel, such determination to be conclusively
evidenced by the execution and delivery thereof, is hereby adopted and approved
in all respects and that the Corporation’s officers are hereby authorized and
directed to enter into the Merger Agreement in the name of and on behalf
of the
Corporation; and it is further
RESOLVED,
that
the officers of the Corporation are hereby authorized and directed to present
the Merger Agreement to the stockholders of the Corporation for their consent
and approval, and that the officers of the Corporation are hereby authorized
and
directed to inform the stockholders of the Corporation that the Board of
Directors of the Corporation recommends approval of the Merger Agreement
and the
transactions contemplated thereby; and it is further
RESOLVED,
that,
subject to the approval of the Corporation’s stockholders, the officers of the
Corporation are hereby authorized and directed to consummate the transactions
contemplated by the Merger Agreement as soon as practicable after the date
that
the Corporation’s stockholders approve the Merger Agreement and the transactions
contemplated thereby; and it is further
RESOLVED,
that the
proper officers of the Corporation are hereby authorized, empowered and
directed, with each such officer having the full authority to act without
the
participation or consent of any other officer, to do and perform any and
all
such other acts and things, and to take or omit to take any and all such
further
action, and to execute and deliver any and all such further agreements,
instruments, certificates and other documents or communications (including
information statements), in the name and on behalf of the Corporation and
under
its corporate seal or otherwise, as each of the officers may, in his or her
discretion, deem necessary or appropriate in order to perform or otherwise
satisfy, in whole or in part, any and all of the purposes and intents of
the
foregoing resolutions; and it is further
RESOLVED,
that
all
actions previously taken by the officers of the Corporation in accordance
with
the resolutions contained in this Unanimous Written Consent are hereby ratified,
approved and confirmed in all respects.
Appendix
C
CERTIFICATE
OF INCORPORATION
OF
A21,
INC.
THE
UNDERSIGNED,
for the
purpose of incorporating and organizing a corporation under the General
Corporation Law of the State of Delaware, does hereby execute this Certificate
of Incorporation and does hereby certify as follows:
FIRST:
The
name of the corporation is a21, Inc. (hereinafter called the
"Corporation").
SECOND:
The
registered office of the Corporation is to be located at 2711 Centerville
Road,
Suite 400, in the City of Wilmington, County of New Castle, in the State
of
Delaware 19808. The name of its registered agent at that address is Corporation
Service Company.
THIRD:
The
purpose of the Corporation is to engage in any lawful act or activity for
which
corporations may be organized under the General Corporation Law of Delaware
(“GCL”).
FOURTH:
The
total
number of shares of all classes of capital stock which the Corporation
shall
have authority to issue is 200,100,000, of which 200,000,000 shares shall
be
Common Stock of the par value of $.001 per share, and 100,000 shares shall
be
Preferred Stock of the par value of $.001 per share.
(A) Preferred
Stock.
The
Board of Directors is expressly granted authority to issue shares of the
Preferred Stock, in one or more series, and to fix for each such series
such
voting powers, full or limited, and such designations, preferences and
relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof as shall be stated and expressed in
the
resolution or resolutions adopted by the Board of Directors providing for
the
issue of such series (a “Preferred Stock Designation”) and as may be permitted
by the GCL. The number of authorized shares of Preferred Stock may be increased
or decreased (but not below the number of shares thereof then outstanding)
by
the affirmative vote of the holders of a majority of the voting power of
all of
the then outstanding shares of the capital stock of the Corporation entitled
to
vote generally in the election of directors, voting together as a single
class,
without a separate vote of the holders of the Preferred Stock, or any series
thereof, unless a vote of any such holders is required pursuant to any
Preferred
Stock Designation.
(B) Common
Stock.
Except
as otherwise required by law or as otherwise provided in any Preferred
Stock
Designation, the holders of the Common Stock shall exclusively possess
all
voting power and each share of Common Stock shall have one vote.
FIFTH:
The
name and mailing address of the incorporator is: Sarah-Nicole Pinheiro,
c/o Loeb
& Loeb LLP, 345 Park Avenue, New York, New York 10154.
SIXTH:
The
personal liability of Directors of the Corporation to the Corporation or
its
stockholders for monetary damages shall be eliminated to the fullest extent
permitted under Section 102(b)(7) of the General Corporation Law of the
State of
Delaware.
SEVENTH:
Indemnification.
(A) A
director of the Corporation shall not be personally liable to the Corporation
or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director’s duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions
not
in good faith or which involve intentional misconduct or a knowing violation
of
law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware,
or (iv)
for any transaction from which the director derived an improper personal
benefit. If the General
Corporation Law of the State of Delaware
is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted
by
the General
Corporation Law of the State of Delaware,
as so
amended. Any repeal or modification of this paragraph A by the stockholders
of
the Corporation shall not adversely affect any right or protection of a
director
of the Corporation with respect to events occurring prior to the time of
such
repeal or modification.
(B) The
Corporation, to the full extent permitted by Section 145 of the General
Corporation Law of the State of Delaware,
as
amended from time to time, shall indemnify all persons whom it may indemnify
pursuant thereto. Expenses (including attorneys’ fees) incurred by an officer or
director in defending any civil, criminal, administrative, or investigative
action, suit or proceeding for which such officer or director may be entitled
to
indemnification hereunder shall be paid by the Corporation in advance of
the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount
if
it shall ultimately be determined that he is not entitled to be indemnified
by
the Corporation as authorized hereby.
EIGHTH:
The
Corporation’s Board of Directors shall have the power to adopt, amend or repeal
the Corporation’s By-Laws by a majority vote at any regular meeting of the Board
of Directors, or at any special meeting of the Board of Directors, if notice
thereof is contained in the notice of such special meeting, or by written
consent as provided by Section 141(f) of the General Corporation Law of
the
State of Delaware.
The
Corporation’s By-Laws may be adopted, amended or repealed by the Corporation’s
stockholders if two-thirds of all stockholders entitled to vote on the
adoption,
amendment or repeal of the By-Laws vote in favor of such adoptions, amendment
or
repeal.
NINTH:
The
election of Directors need not be by written ballot.
TENTH:
The
directors in their discretion may submit any contract or act for approval
or
ratification at any annual meeting of the stockholders or at any meeting
of the
stockholders called for the purpose of considering any such act or contract,
and
any contract or act that shall be approved or be ratified by the vote of
the
holders of a majority of the stock of the Corporation which is represented
in
person or by proxy at such meeting and entitled to vote thereat (provided
that a
lawful quorum of stockholders be there represented in person or by proxy)
shall
be as valid and binding upon the Corporation and upon all the stockholders
as
though it had been approved or ratified by every stockholder of the Corporation,
whether or not the contract or act would otherwise be open to legal attack
because of directors’ interests, or for any other reason.
ELEVENTH:
In
addition to the powers and authorities hereinbefore or by statute expressly
conferred upon them, the directors are hereby empowered to exercise all
such
powers and do all such acts and things as may be exercised or done by the
Corporation; subject, nevertheless, to the provisions of the statutes of
Delaware, of this Certificate of Incorporation, and to any by-laws from
time to
time made by the stockholders; provided, however, that no by-law so made
shall
invalidate any prior act of the directors which would have been valid if
such
by-law had not been made.
TWELFTH:
Whenever a compromise or arrangement is proposed between this Corporation
and
its creditors or any class of them and/or between this Corporation and
its
stockholders or any class of them, any court of equitable jurisdiction
within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application
of
any receiver or receivers appointed for this Corporation under Section
291 of
Title 8 of the Delaware Code or on the application of trustees in dissolution
or
of any receiver or receivers appointed for this Corporation under Section
279 of
Title 8 of the Delaware Code order a meeting of the creditors or class
of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said
court
directs. If a majority in number representing three fourths in value of
the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise
or
arrangement and to any reorganization of this Corporation as a consequence
of
such compromise or arrangement, the said compromise or arrangement and
the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or
on
all the stockholders or class of stockholders, of this Corporation, as
the case
may be, and also on this Corporation.
IN
WITNESS WHEREOF,
the
undersigned, being the incorporator herein before named, has executed this
Certificate of Incorporation this 23rd day of June 2006.
| |
|
|
| |
|
/s/
Sarah-Nicole
Pinheiro |
| |
Sarah-Nicole
Pinheiro, Incorporator |
BY-LAWS
OF
A21,
INC.
ARTICLE
I
OFFICES
SECTION
1. Principal
Office.
The
registered office of the corporation shall be located in such place as may
be
provided from time to time in the Certificate of Incorporation.
SECTION
2. Other
Offices.
The
corporation may also have offices at such other places both within and without
the State of Delaware as the board of directors may from time to time determine
or as the business of the corporation may require.
ARTICLE
II
STOCKHOLDERS
SECTION
1. Annual
Meetings.
The
annual meeting of the stockholders of the corporation shall be held wholly
or
partially by means of remote communication or at such place, within or without
the State of Delaware, on such date and at such time as may be determined by
the
board of directors and as shall be designated in the notice of said
meeting.
SECTION
2. Special
Meetings.
Special
meetings of the stockholders for any purpose or purposes, unless otherwise
prescribed by statute or by the Certificate of Incorporation, may be held wholly
or partially by means of remote communication or at any place, within or without
the State of Delaware, and may be called by resolution of the board of
directors, or by the Chairman or the Chief Executive Officer.
SECTION
3. Notice
and Purpose of Meetings.
Written
or printed notice of the meeting stating the place, date and hour of the meeting
and, in case of a special meeting, stating the purpose or purposes for which
the
meeting is called, and in case of a meeting held by remote communication stating
such means, shall be delivered not less than ten nor more than sixty days before
the date of the meeting, either personally, or by mail, or if prior consent
has
been received by a stockholder by electronic transmission, by or at the
direction of the Chairman or the Chief Executive Officer, the Secretary, or
the
persons calling the meeting, to each stockholder of record entitled to vote
at
such meeting.
SECTION
4. Quorum.
The
holders of a majority of the shares of capital stock issued and outstanding
and
entitled to vote, represented in person or by proxy, shall constitute a quorum
at all meetings of the stockholders for the transaction of business, except
as
otherwise provided by statute or by the Certificate of Incorporation. If,
however, such quorum shall not be present or represented at any meeting of
the
stockholders, the stockholders present in person or represented by proxy shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented.
At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting
as
originally notified.
SECTION
5. Voting
Process.
If a
quorum is present or represented, the affirmative vote of a majority of the
shares of stock present or represented at the meeting, by ballot, proxy or
electronic ballot, shall be the act of the stockholders unless the vote of
a
greater number of shares of stock is required by law, by the Certificate of
Incorporation or by these by-laws. Each outstanding share of stock having voting
power, shall be entitled to one vote on each matter submitted to a vote at
a
meeting of stockholders. A stockholder may vote either in person, by proxy
executed in writing by the stockholder or by his duly authorized
attorney-in-fact, or by an electronic ballot from which it can be determined
that the ballot was authorized by a stockholder or proxyholder. The term,
validity and enforceability of any proxy shall be determined in accordance
with
the General corporation Law of the State of Delaware.
SECTION
6. Written
Consent of Stockholders Without a Meeting.
Whenever the stockholders are required or permitted to take any action by vote,
such action may be taken without a meeting, without prior notice and without
a
vote, if a written consent or electronic transmission, setting forth the action
so taken, shall be signed or e-mailed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting called for such purpose.
ARTICLE
III
DIRECTORS
SECTION
1. Powers.
The
business affairs of the corporation shall be managed by its board of directors,
which may exercise all such powers of the corporation and do all such lawful
acts and things as are not by statute or by the Certificate of Incorporation
or
by these by-laws directed or required to be exercised or done by the
stockholders. The board of directors may adopt such rules and regulations,
not
inconsistent with the Certificate of Incorporation or these By-Laws or
applicable laws, as it may deem proper for the conduct of its meetings and
the
management of the corporation.
SECTION
2. Number,
Qualifications, Term.
The
board of directors shall consist of one or more members. The number of directors
shall be fixed initially by the Incorporator and may thereafter be changed
from
time to time by resolution of the board of directors or of the stockholders.
Directors need not be residents of the State of Delaware nor stockholders of
the
corporation. The directors shall be elected at the annual meeting of the
stockholders, and each director elected shall serve until the next succeeding
annual meeting and until his successor shall have been elected and
qualified.
SECTION
3. Vacancies.
Vacancies and newly created directorships resulting from any increase in the
number of directors may be filled by a majority of the directors then in office,
though less than a quorum, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and shall
qualify. A vacancy created by the removal of a director by the stockholders
may
be filled by the stockholders.
SECTION
4. Place
of Meetings.
Meetings of the board of directors, regular or special, may be held either
within or without the State of Delaware.
SECTION
5. First
Meeting.
The
first meeting of each newly elected board of directors shall be held immediately
following and at the place of the annual meeting of stockholders and no other
notice of such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting, provided a quorum shall be present,
or
it may convene at such place and time as shall be fixed by the consent in
writing of all the directors.
SECTION
6. Regular
Meetings.
Regular
meetings of the board of directors may be held upon such notice, or without
notice, and at such time and at such place as shall from time to time be
determined by the board.
SECTION
7. Special
Meetings.
Special
meetings of the board of directors may be called by the Chairman or the Chief
Executive Officer or by the number of directors who then legally constitute
a
quorum. Notice of each special meeting shall, if mailed, be addressed to each
director at least two but not more than twenty days prior to the date on which
the meeting is to be held.
SECTION
8. Notice;
Waiver.
Attendance of a director at any meeting shall constitute a waiver of notice
of
such meeting, except where a director attends for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the board of directors need be specified
in the notice or waiver of notice of such meeting.
SECTION
9. Quorum.
One-half of the directors then in office shall constitute a quorum for the
transaction of business unless a greater number is required by law, by the
Certificate of Incorporation or by these by-laws. If a quorum shall not be
present at any meeting of directors, the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
SECTION
10. Action
Without A Meeting.
Any
action required or permitted to be taken at a meeting of the directors may
be
taken without a meeting if a consent in writing or by electronic transmission,
setting forth the action so taken, shall be signed by all of the directors
entitled to vote with respect to the subject matter thereof. In addition,
meetings of the board may be held by means of conference telephone or voice
communication as permitted by the General corporation Law of the State of
Delaware.
SECTION
11. Action.
Except
as otherwise provided by law or in the Certificate of Incorporation or these
by-laws, if a quorum is present, the affirmative vote of a majority of the
members of the board of directors will be required for any action.
SECTION
12. Removal
of Directors.
Subject
to any provisions of applicable law, any or all of the directors may be removed
(a) for cause, by action of stockholders or by action of the remaining members
of the board, and (b) without cause, by vote of the stockholders.
ARTICLE
IV
COMMITTEES
SECTION
1. Executive
Committee.
The
board may, by resolution adopted by a majority of the whole board, designate
one
or more of its members to constitute members or alternate members of an
Executive Committee.
SECTION
2. Powers
and Authority of Executive Committee.
The
Executive Committee shall have and may exercise, between meetings of the board
of directors, all the powers and authority of the board of directors in the
management of the business and affairs of the Company, including, the right
to
authorize the purchase of stock, except that the Executive Committee shall
not
have such power or authority in reference to amending the Certificate of
Incorporation; adopting an agreement of merger or consolidation; recommending
to
the stockholders the sale, lease or exchange of all or substantially all of
the
corporation's property and assets; recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or amending
the
by-laws of the corporation or authorizing the declaration of a
dividend.
SECTION
3. Other
Committees.
The
board of directors may, by resolution adopted by a majority of the whole board
of directors, designate one or more other committees, each of which shall,
except as otherwise prescribed by law, have such authority of the board of
directors as shall be specified in the resolution of the board of directors
designating such committee. A majority of all the members of such committee
may
determine its action and fix the time and place of its meeting, unless the
board
of directors shall otherwise provide. The board of directors shall have the
power at any time to change the membership of, to fill all vacancies in and
to
discharge any such committee, either with or without cause.
SECTION
4. Procedure;
Meetings; Quorum.
Regular
meetings of the Executive Committee or any other committee of the board of
directors, of which no notice shall be necessary, may be held at such times
and
places as shall be fixed by resolution adopted by a majority of the members
thereof. Special meetings of the Executive Committee or any other committee
of
the board of directors shall be called at the request of any member thereof.
So
far as applicable, the provisions of Article III of these By-laws relating
to
notice, quorum and voting requirements applicable to meetings of the board
of
directors shall govern meetings of the Executive Committee or any other
committee of the board of directors. The Executive Committee and each other
committee of the board of directors shall keep written minutes of its
proceedings and circulate summaries of such written minutes to the board of
directors before or at the next meeting of the board of
directors.
ARTICLE
V
OFFICERS
SECTION
1. Number.
The
board of directors at its first meeting after each annual meeting of
stockholders shall choose a Chief Executive Officer and a Secretary, none of
whom need be a member of the board. The board of directors may also choose
a
Chairman from among the directors, a Chief Financial Officer, one or more
Executive Vice Presidents, one or more Vice Presidents, Assistant Secretaries,
Treasurers and Assistant Treasurers. The board of directors may appoint such
other officers and agents as it shall deem necessary, who shall hold their
offices for such terms and shall exercise such powers and perform such duties
as
shall be determined from time to time by the board of directors. More than
two
offices may be held by the same person.
SECTION
2. Compensation.
The
salaries or other compensation of all officers of the corporation shall be
fixed
by the board of directors. No officer shall be prevented from receiving a salary
or other compensation by reason of the fact that he is also a
director.
SECTION
3. Term;
Removal; Vacancy.
The
officers of the corporation shall hold office until their successors are chosen
and qualify. Any officer may be removed at any time, with or without cause,
by
the affirmative vote of a majority of the whole board of directors. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
SECTION
4. Chairman.
The
Chairman shall, if one be elected, preside at all meetings of the board of
directors.
SECTION
5. Chief
Executive Officer.
The
Chief Executive Officer shall be the chief executive of the corporation, shall
preside at all meetings of the stockholders and the board of directors in the
absence of the Chairman, shall have general supervision over the business of
the
corporation and shall see that all directions and resolutions of the board
of
directors are carried into effect.
SECTION
6. President.
The
President, if there shall be one, shall, in the absence or disability of the
Chief Executive Officer, perform the duties and exercise the powers of the
Chief
Executive Officer, be the Chief Executive Officer of the corporation and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
SECTION
7. Executive
Vice Presidents; Vice Presidents.
The
Executive Vice Presidents shall, in the absence or disability of the Chief
Executive Officer and the President, perform the duties and exercise the powers
of the Chief Executive Officer and shall perform such other duties and have
such
other powers as the board of directors may from time to time prescribe. If
there
shall be more than one Executive Vice President, the Executive Vice Presidents
shall perform such duties and exercise such powers in the absence or disability
of the Chief Executive Officer and the President, in the order determined by
the
board of directors. The Vice Presidents shall, in the absence or disability
of
the Chief Executive Officer, the President and of the Executive Vice Presidents,
perform the duties and exercise the powers of the Chief Executive Officer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe. If there shall be more than one
Vice
President, the Vice Presidents shall perform such duties and exercise such
powers in the absence or disability of the Chief Executive Officer, the
President and the Executive Vice President, in the order determined by the
board
of directors.
SECTION
8. Secretary.
The
Secretary shall attend all meetings of the board of directors and all meetings
of the stockholders and record all the proceedings of the meetings of the
corporation and of the board of directors in a book to be kept for that purpose.
He 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 President, under whose
supervision he shall be. He shall have custody of the corporate seal of the
corporation and he, or an assistant secretary, shall have the authority to
affix
the same to an instrument requiring it and when so affixed, it may be attested
by his signature or by the signature of such assistant secretary. The board
of
directors may give general authority to any other officer to affix the seal
of
the corporation and to attest the affixing by his signature.
SECTION
9. Assistant
Secretary.
The
Assistant Secretary, if there shall be one, or if there shall be more than
one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the Secretary, perform the duties and
exercise the powers of the Secretary and shall perform such other duties and
have such powers as the board of directors may from time to time
prescribe.
SECTION
10. Chief
Financial Officer.
The
Chief Financial Officer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation
in
such depositories as may be designated by the board of directors. He shall
disburse the funds of the corporation as may be ordered by the board of
directors, the Chief Executive Officer or the President, taking proper vouchers
for such disbursements, and shall render to the Chairman, the Chief Executive
Officer and the President and the board of directors, at its regular meetings,
or when the board of directors so requires, an account of all of his
transactions as Treasurer and of the financial condition of the
corporation.
SECTION
11. Treasurer.
The
Treasurer, if there shall be one, shall, in the absence or disability of the
Chief Financial Officer, perform the duties and exercise the powers of the
Chief
Financial Officer and shall perform such other duties and have such other powers
as the board of directors may from time to time prescribe.
SECTION
12. Assistant
Treasurer.
The
Assistant Treasurer, if there shall be one, or, if there shall be more than
one,
the Assistant Treasurers in the order determined by the board of directors,
shall, in the absence or disability of the Treasurer, perform the duties and
exercise the powers of the Treasurer and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
ARTICLE
VI
CAPITAL
STOCK
SECTION
1. Form.
The
shares of the capital stock of the corporation shall be represented by
certificates in such form as shall be approved by the board of directors and
shall be signed by the Chairman, the President, an Executive Vice President
or a
Vice President, and by the Treasurer or an assistant treasurer or the Secretary
or an Assistant Secretary of the corporation, and may be sealed with the seal
of
the corporation or a facsimile thereof.
SECTION
2. Lost
and Destroyed Certificates.
The
board of directors may direct a new certificate to be issued in place of any
certificate theretofore issued by the corporation alleged to have been lost
or
destroyed. When authorizing such issue of a new certificate, the board of
directors, in its discretion and as a condition precedent to the issuance
thereof, may prescribe such terms and conditions as it deems expedient, and
may
require such indemnities as it deems adequate, to protect the corporation from
any claim that may be made against it with respect to any such certificate
alleged to have been lost or destroyed.
SECTION
3. Transfer
of Shares.
Upon
surrender to the corporation or the transfer agent of the corporation of a
certificate representing shares duly endorsed or accompanied by proper evidence
of succession, assignment or authority to transfer, a new certificate shall
be
issued to the person entitled thereto, and the old certificate cancelled and
the
transaction recorded upon the books of the corporation.
ARTICLE
VII
INDEMNIFICATION
SECTION
1. (a) The corporation shall indemnify, subject to the requirements of
subsection (d) of this Section, any 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
(other than an action by or in the right of the corporation), by reason of
the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation 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 such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reason-able cause to believe his conduct was unlawful.
The
termi-nation of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere
or its
equivalent, shall not, of itself, create a presumption that the person 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 corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(b)
The
corporation shall indemnify, subject to the requirements of subsection (d)
of
this Section, 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 corporation 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 corporation or is
or
was serving at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or
suit if he acted in good faith and in a manner he reasonably believed to be
in
or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery of the State of
Delaware or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of
all
the circum-stances of the case, such person is fairly and reasonably entitled
to
indemnity for such expenses which the Court of Chancery of the State of Delaware
or such other court shall deem proper.
(c)
To
the extent that a director, officer, employee or agent of the corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in subsections (a) and (b) of this Section, or in defense
of any claim, issue or matter therein, the corporation shall indemnify him
against expenses (including attorneys' fees) actually and reason-ably incurred
by him in connection therewith.
(d)
Any
indemnification under subsections (a) and (b) of this Section (unless ordered
by
a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (a) and (b) of this
Section. Such determination shall be made (1) by the board of directors by
a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even
if obtainable a quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or (3) by the stockholders.
(e)
Expenses (including attorney’s fees) incurred by a director, officer, employee
or agent in defending a civil or criminal action, suit or proceeding may be
paid
by the corporation in advance of the final disposition of such action, suit
or
proceeding upon receipt of an undertaking by or on behalf of such director
or
officer to repay such amount if it shall ultimately be determined that he is
not
entitled to be indemnified by the corporation as authorized in this Section.
Such expenses (including attorney’s fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f)
The
indemnification and advancement of expenses provided by, or granted pursuant
to,
the other subsections of this Section shall not limit the corporation from
providing any other indemnification or advancement of expenses permitted by
law
nor shall they be deemed exclusive of any other rights to which a person seeking
indemnifica-tion or advancement of expenses may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both
as
to action in his official capacity and as to action in another capacity while
holding such office.
(g)
The
corporation may purchase and maintain insurance on behalf of any person who
is
or was a director, officer, employee or agent of the corporation, or is or
was
serving at the request of the corporation as a director, officer, employee
or
agent of another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by him in
any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability under
the provisions of this Section.
(h)
For
the purposes of this Section, references to "the corporation" shall include,
in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to
indemnify its directors, officers, employees or agents, so that any person
who
is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, shall stand in the same position
under
the provisions of this Section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its
separate existence had continued.
(i)
For
purposes of this Section, references to "other enterprises" shall include
employee benefit plans; references to "fines" shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and references
to
"serving at the request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which imposes duties
on,
or involves services by, such director, officer, employee, or agent with respect
to any employee benefit plan, its participants, or beneficiaries; and a person
who acted in good faith and in a manner he reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan
shall
be deemed to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this Section.
(j)
The
indemnification and advancement of expenses provided by, or granted pursuant
to,
this Section shall, unless otherwise provided when authorized or ratified by
the
board of directors, continue as to a person who has ceased to be a director,
officer, employee or agent of the corporation and shall inure to the benefit
of
the heirs executors and administrators of such a person.
ARTICLE
VIII
GENERAL
PROVISIONS
SECTION
1. Checks.
All
checks or demands for money and notes of the corporation shall be signed by
such
officer or officers or such other person or persons as the board of directors
may from time to time designate.
SECTION
2. Fiscal
Year.
The
fiscal year of the corporation shall be determined, and may be changed, by
resolution of the board of directors.
SECTION
3. Seal.
The
corporate seal shall have inscribed thereon the name of the corporation, the
year of its organization and the words "Corporate Seal, Delaware." The seal
may
be used by causing it or a facsimile thereof to be impressed or affixed or
in
any manner reproduced.
ARTICLE
IX
AMENDMENTS
SECTION
1. These by-laws may be altered, amended, supplemented or repealed or new
by-laws may be adopted (a) at any regular or special meeting of stockholders
at
which a quorum is present or represented, by the affirmative vote of the holders
of two-thirds of the shares entitled to vote, provided notice of the proposed
alteration, amendment or repeal be contained in the notice of such meeting,
or
(b) by a resolution adopted by the board of directors at any regular or special
meeting of the board. The stockholders shall have authority to change or repeal
any by-laws adopted by the directors.
Appendix
D
AGREEMENT
AND PLAN OF MERGER
A21,
INC.
(TEXAS) AND
A21,
INC.
(DELAWARE)
THIS
AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of June ___, 2006, is
made and entered into by and between a21, Inc., a Texas
corporation
(“a21-Texas”), and a21, Inc., a Delaware corporation (“a21-Delaware”), which
corporations are sometimes referred to herein as the “Constituent
Corporations.”
WITNESSETH
WHEREAS,
a21-Texas is a corporation organized and existing under the laws
of
the
State of Texas; and
WHEREAS,
a21-Delaware is a wholly-owned subsidiary corporation of
a21-Texas;
and
WHEREAS,
the respective Boards of Directors of a21-Texas and a21-Delaware
have
determined that it is desirable to merge a21-Texas with and into a21-Delaware
(the
“Merger”);
and
WHEREAS,
the parties intend by this Agreement to effect a reorganization
under
Section 368 of the Internal Revenue Code of 1986, as amended;
NOW,
THEREFORE, in consideration of the premises, the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree that a21-Texas shall
be merged with and into a21-Delaware upon the terms and conditions set forth
below.
ARTICLE
I
MERGER
On
the
effective date of the Merger (the “Effective Date”) as provided herein,
a21-Texas shall be merged with and into a21-Delaware, the separate existence
of
a21-Texas shall cease and a21-Delaware (hereinafter sometimes referred to as
the
“Surviving Corporation”) shall continue to exist under the name of a21, Inc. by
virtue of, and shall be governed by, the laws of the State of Delaware. The
address of the registered office of the Surviving Corporation in the State
of
Delaware will be 2711
Centerville Road, Suite 400, Wilmington, Delaware 19808.
ARTICLE
II
CERTIFICATE
OF INCORPORATION OF SURVIVING CORPORATION
The
name
of the Surviving Corporation shall be “a21, Inc.” The Certificate of
Incorporation of the Surviving Corporation as in effect on the date hereof
shall
be the Certificate of Incorporation of a21-Delaware (the “Delaware Charter”)
without change unless and until amended in accordance with applicable
law.
ARTICLE
III
BYLAWS
OF
THE SURVIVING CORPORATION
The
Bylaws of the Surviving Corporation as in effect on the date hereof shall be
the
Bylaws of a21-Delaware (the “Delaware Bylaws”) without change unless and until
amended in accordance with applicable law.
ARTICLE
IV
EFFECT
OF
MERGER ON STOCK OF CONSTITUENT CORPORATIONS
4.1.
On
the Effective Date, each outstanding share of common stock of a21-Texas, par
value $0.001 per share (the “Common Stock”), shall be converted into one share
of a21-Delaware common stock, par value $0.001 per share (the “Delaware Common
Stock”), and each outstanding share of Delaware Common Stock held by a21-Texas
shall be retired and canceled. The shares of Delaware Common Stock shall be
identical to the shares of Common Stock in all other aspects.
4.2.
On
the Effective Date, each share of Common Stock held in a21-Texas’ treasury shall
be converted into one treasury share of a21-Delaware Common Stock.
4.3.
All
options and rights to acquire the Common Stock under all outstanding options,
warrants or rights outstanding on the Effective Date will automatically be
converted into equivalent options and other rights to purchase the same number
of shares of Delaware Common Stock.
4.4.
After the Effective Date, certificates representing shares of the Common Stock
will represent shares of Delaware Common Stock and upon surrender of the same
to
the transfer agent for a21-Delaware, the holder thereof shall be entitled to
receive in exchange therefor a certificate or certificates representing the
number of shares of Delaware Common Stock into which such shares of Common
Stock
shall have been converted pursuant to Article 4.1 of this
Agreement.
ARTICLE
V
CORPORATE
EXISTENCE, POWERS AND LIABILITIES
OF
THE
SURVIVING CORPORATION
5.1.
On
the Effective Date, the separate existence of a21-Texas shall cease. a21-Texas
shall be merged with and into a21-Delaware, the Surviving Corporation, in
accordance with the provisions of this Agreement. Thereafter, a21-Delaware
shall
possess all the rights, privileges, powers and franchises of a public as well
as
of a private nature, and shall be subject to all the restrictions, disabilities
and duties of each of the parties to this Agreement; all singular rights,
privileges, powers and franchises of a21-Texas and a21-Delaware, and all
property, real, personal and mixed and all debts due to each of them on whatever
account, shall be vested in a21-Delaware; and all property, rights, privileges,
powers and franchises, and all and every other interest shall be thereafter
as
effectually the property of a21-Delaware, the Surviving Corporation, as they
were of the respective constituent entities, and the title to any real estate,
whether by deed or otherwise, vested in a21-Texas and a21-Delaware, or either
of
them, shall not revert or be in any way impaired by reason of the Merger, but
all rights of creditors and all liens upon the property of the parties hereto,
shall be preserved unimpaired, and all debts, liabilities and duties of
a21-Texas, shall thenceforth attach to a21-Delaware, and may be enforced against
it to the same extent as if said debts, liabilities and duties had been incurred
or contracted by it.
5.2.
a21-Texas agrees that it will execute and deliver, or cause to be executed
and
delivered, all such deeds and other instruments and will take or cause to be
taken such further or other action as the Surviving Corporation may deem
necessary in order to vest in and confirm to the Surviving Corporation title
to
and possession of all the property, rights, privileges, immunities, powers,
purposes and franchises, and all and every other interest of a21-Texas and
otherwise to carry out the intent and purposes of this Agreement.
ARTICLE
VI
OFFICERS
AND DIRECTORS OF SURVIVING CORPORATION
6.1.
Upon
the Effective Date, the officers and directors of a21-Texas shall become the
officers and directors of a21-Delaware, and such persons shall hold office
in
accordance with the charter documents of the Surviving Corporation until their
respective successors shall have been appointed or elected, and, in case of
directors, in the respective classes to which such directors are
assigned.
6.2.
If
upon the Effective Date, a vacancy shall exist in the Board of Directors of
the
Surviving Corporation, such vacancy may be filled in the manner provided by
the
charter documents of the Surviving Corporation.
ARTICLE
VII
APPROVAL
BY SHAREHOLDERS, EFFECTIVE DATE,
CONDUCT
OF BUSINESS PRIOR TO EFFECTIVE DATE
7.1.
Soon
after the approval of this Agreement by the requisite number of shareholders
of
a21-Texas, the respective Boards of Directors of a21-Texas and a21-Delaware
will
cause their duly authorized officers to make and execute Articles of Merger
and
a Certificate of Merger or other applicable certificates or documentation
effecting this Agreement and shall cause the same to be filed with the
Secretaries of State of the States of Texas and Delaware, respectively, in
accordance with the Texas Business Corporation Act (the “TBCA”) and the Delaware
General Corporation Law (the “DGCL”). The Effective Date shall be the date on
which the Merger becomes effective under the TBCA or the date on which the
Merger becomes effective under the DGCL, whichever occurs later.
7.2.
The
Boards of Directors of a21-Texas and a21-Delaware may amend this Agreement
and
the Delaware Charter at any time prior to the Effective Date, provided that
an
amendment made subsequent to the approval of the Merger by the shareholders
of
a21-Texas may not (i) change the assessment or type of shares to be received
in
exchange for or on conversion of the shares of the Common Stock; or (ii) change
any term of the terms and conditions of this Agreement if such change would
adversely affect the holders of the Common Stock.
ARTICLE
VIII
TERMINATION
OF MERGER
This
Agreement may be terminated and the Merger abandoned at any time prior to the
Effective Date, whether before or after shareholder approval of this Agreement,
by the consent of the Board of Directors of a21-Texas and
a21-Delaware.
ARTICLE
IX
MISCELLANEOUS
9.1.
Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Texas, except to the extent the laws of the State
of Delaware are required to be applied.
9.2.
Agreement. An executed copy of this Agreement will be on file at the principal
place of business of the Surviving Corporation at 7660 Centurion Parkway,
Jacksonville, Florida 32256, and, upon request and without cost, a copy thereof
will be furnished to any shareholder.
9.3.
Counterparts. This Agreement may be executed in any number of counterparts,
each
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed
as of the day and year first above written.
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A21,
INC.,
a
Texas
corporation
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By: |
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Name:
Title:
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A21,
INC.,
a
Delaware corporation
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By: |
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Name:
Title:
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Appendix
E
COMPARISON
OF RIGHTS OF STOCKHOLDERS
Some
of
the material differences between the Texas and Delaware corporation laws (the
"TBCA" and the "DGCL,"
respectively), as well as material differences between the Articles of
Incorporation and Bylaws of a21, Inc.-Texas (“a21-Texas”) and the Certificate of
Incorporation and Bylaws of a21, Inc.-Delaware (“a21-Delaware”), are described
below. The following description is a summary only and does not purport to
be a
complete description of all differences.
In
addition, please note that the TBCA will
expire on January 1, 2010, and will be replaced by the Texas Business
Organizations Code, which took effect January 1, 2006. All new corporations
incorporated in Texas after January 1, 2006 will be incorporated under the
Business Organizations Code, but corporations existing as of December 31, 2005
may continue to operate under the TBCA until January 1, 2010. The below
discussion is based on the TBCA since a21-Texas was incorporated prior to
January 1, 2006.
AUTHORIZED
CAPITALIZATION
A21-TEXAS
The
total
number of shares of all classes of capital stock that a21-Texas is authorized
to
issue is 100,100,000 of which (a) 100,000,000 shares is designated Common Stock,
par value $0.001 per share, and (b) 100,000 shares is designated Preferred
Stock, par value $0.001 per share.
Shares
of
the Preferred Stock may be issued from time to time in one or more series,
the
shares of each series to have such designations, preferences, limitations,
and
relative rights, including voting rights, as shall be stated and expressed
therein or in a resolution or resolutions providing for the issue of such series
adopted by the Board of Directors of a21-Texas.
A21-DELAWARE
The
total
number of shares of all classes of capital stock that a21-Delaware is authorized
to issue is 200,100,000, of which 200,000,000 shares shall be Common Stock
of
the par value of $.001 per share, and 100,000 shares shall be Preferred Stock
of
the par value of $.001 per share.
The
Board
of Directors is expressly granted authority to issue shares of the Preferred
Stock, in one or more series, and to fix for each such series such voting
powers, full or limited, and such designations, preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof as shall be stated and expressed in the
resolution or resolutions adopted by the Board of Directors providing for the
issue of such series and as may be permitted by the DGCL
VOTE
REQUIRED FOR MERGERS AND SIMILAR FUNDAMENTAL CORPORATE
TRANSACTIONS
A21-TEXAS
Pursuant
to the TBCA, the affirmative vote of the holders of at least two-thirds of
the
shares entitled to vote, including, if required, by separate class, is required
for a merger, consolidation, share exchange or dissolution. A company’s articles
of incorporation may, however, provide that such actions of the shareholders
shall be by the affirmative vote of the holders of a specified portion, but
not
less than a majority of the shares (or of any class or series) entitled to
vote
on the matter, rather than the two-thirds of the outstanding shares (or of
any
class or series) of the company otherwise required by the TBCA. The articles
of
incorporation of a21-Texas includes a provision which requires the affirmative
vote of the holders of a majority of the outstanding shares entitled to vote.
A21-DELAWARE
Pursuant
to the DGCL, the affirmative vote of the holders of a majority of the shares
entitled to vote, including, if required, by separate class, is required for
a
merger, consolidation or dissolution. The DGCL does not contain any share
exchange provision.
APPLICABLE
STATE TAKEOVER LAWS
A21-TEXAS
The
TBCA
generally prohibits significant business transactions, including mergers, with
a
holder of 20% or more of a public corporation's stock for a period of three
years after such holder exceeds such ownership level, unless:
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the
board approves either the transaction in question or the acquisition
of
shares by the affiliated shareholder prior to the affiliated shareholder's
share acquisition date; or
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the
transaction is approved by the holders of at least two-thirds of
the
corporation’s shares entitled to vote thereon, excluding the shares held
by the shareholder in question, at a meeting of shareholders not
less than
six months after the affiliated shareholder’s share acquisition
date.
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A21-DELAWARE
The
DGCL
generally prohibits significant business transactions, including mergers, with
a
holder of 15% or more of a public corporation's stock for a period of three
years after such holder exceeds such ownership level, unless:
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the
board approves either the transaction in question or the acquisition
of
shares by the interested stockholder prior to the time the stockholder
becomes an interested stockholder based on its direct or indirect
ownership of 15% of the corporation’s stock; or
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when
the interest stockholder exceeds the 15% threshold, it acquires at
least
85% of the outstanding shares not held by certain affiliates, such
as
pursuant to a tender offer; or
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the
transaction is approved by the board of directors and the holders
of at
least two-thirds of the corporation’s shares entitled to vote thereon,
excluding the shares held by the interested stockholder, at a meeting
of
stockholders. The DGCL does not require that this vote occur within
six
month’s of the interested stockholder’s share acquisition
date.
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VOTE
REQUIRED FOR SALE OF ALL OR SUBSTANTIALLY ALL OF THE CORPORATE
ASSETS
A21-TEXAS
The
TBCA
generally requires the affirmative vote of the holders of at least two-thirds
of
the shares entitled to vote, including, if required, by separate class, if
the
transaction is not in the “usual and regular course of business.” A company’s
articles of incorporation, however, may provide that the such actions of the
shareholders shall be the affirmative vote of the holders of a specified
portion, but not less than a majority of the shares (or of any class or series)
entitled to vote on the matter, rather than the two-thirds of the outstanding
shares (or of any class or series) of the company otherwise required by the
TBCA. The articles of incorporation of a21-Texas includes a provision which
requires affirmative vote of the holders of a majority of the outstanding shares
entitled to vote for a sale of all or substantially all the assets of a
corporation to be approved.
Under
the
TBCA, a transaction is deemed to be in the "usual and regular course of
business" if the corporation continues to engage in one or more businesses
after
the transaction or applies a portion of the sale proceeds to the conduct of
its
business.
A21-DELAWARE
The
DGCL
requires approval by the holders of a majority of the corporation’s outstanding
stock for such transactions.
APPRAISAL
RIGHTS
A21-TEXAS
Shareholders
of a Texas corporation generally have dissenter's rights in connection with
significant business transactions requiring shareholder approval, including
mergers. However, a shareholder of a Texas corporation has no appraisal rights
with respect to any plan of merger pursuant to which there is a single surviving
or new domestic or foreign corporation, or with respect to any plan of exchange,
if:
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the
shares held by the shareholder are part of a class of shares listed
on a
national securities exchange, listed on the Nasdaq National Market
or held
of record by not less than 2,000
holders,
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the
shareholder is not required to accept for his shares any consideration
that is different than the consideration to be received by other
holders
of the same class or series of shares held by such shareholder,
and
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the
shareholder is not required to accept any consideration other than
shares
of a corporation which satisfy the requirements of the first bullet
point
above and cash in lieu of fractional
shares.
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A21-DELAWARE
Stockholders
of a Delaware corporation generally have no appraisal rights in the event of
a
merger or consolidation of a corporation if the stock of the Delaware
corporation is listed on a national securities exchange or the Nasdaq National
Market, or such stock is held of record by more than 2,000 shareholders, or
in
the case of a merger for which stockholder approval is not required by statute,
in each case, unless they are required to accept for their stock anything other
than:
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shares
of stock of the surviving corporation (or depositary receipts in
respect
thereof), or shares of stock or depositary receipts of any other
corporation whose shares or depository receipts will satisfy the
listing
or ownership requirements described above,
and
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in
lieu of fractional shares.
CHARTER
AMENDMENTS
A21-TEXAS
In
accordance with the TBCA, charter amendments generally require board approval
and the affirmative vote of the holders of two-thirds of the outstanding shares
entitled to vote and, in some circumstances, a similar vote of each affected
class of shares. A company’s articles of incorporation, however, may provide
that the such actions of the shareholders shall be the affirmative vote of
the
holders of a specified portion, but not less than a majority of the shares
(or
of any class or series) entitled to vote on the matter, rather than the
two-thirds of the outstanding shares (or of any class or series) of the company
otherwise required by the TBCA. The articles of incorporation of a21-Texas
includes a provision which requires the affirmative vote of the holders of
a
majority of the outstanding shares entitled to vote.
A21-DELAWARE
The
DGCL
generally requires board approval and the affirmative vote of the holders of
a
majority of the outstanding stock entitled to vote and, in some circumstances,
a
similar vote of each affected class of stock.
AMENDMENTS
TO BYLAWS
A21-TEXAS
The
TBCA
provides that a corporation's board of directors and shareholders may amend
the
corporation's bylaws, unless otherwise provided in the corporation's articles
of
incorporation or bylaws. The bylaws of a21-Texas provide that the power to
amend
or repeal bylaws or to adopt new bylaws is vested in the board of directors,
but
is subject to the right of the shareholders to amend or repeal bylaws or to
adopt new bylaws.
A21-DELAWARE
The
DGCL
provides that stockholders have the power to amend a corporation’s by-laws,
unless a corporation confers this power to its directors. a21-Delaware’s by-laws
provide that bylaw amendments may be made by the board of directors without
the
consent or vote of the stockholders or by the stockholders with the affirmative
vote of holders of two-thirds of the outstanding shares entitled to
vote.
ACTION
WITHOUT A MEETING
A21-TEXAS
Under
the
TBCA and the a21-Texas charter, any action required to be taken at an annual
or
special meeting of shareholders may be taken without a meeting but only if
a
written consent signed by the holders of such number of shares as would be
required to approve the proposal if the holders of all the shares entitled
to
vote on such matter were present at a meeting of the stockholders is presented
to the corporation.
A21-DELAWARE
Under
the
DGCL any action required to be taken at an annual or special meeting of
shareholders may be taken without a meeting but only if a written consent signed
by the holders of such number of shares as would be required to approve the
proposal if the holders of all the shares entitled to vote on such matter were
present at a meeting of the stockholders is presented to the
corporation.
ABILITY
TO CALL SPECIAL MEETINGS
A21-TEXAS
Consistent
with the TBCA, the bylaws of a21-Texas permit the holders of at least ten
percent of shares entitled to vote to call a special meeting of
shareholders.
A21-DELAWARE
As
permitted by the DGCL, a21-Delaware’s charter and bylaws do not authorize
stockholders to call special meetings.
CLASS
VOTING
A21-TEXAS
Under
the
TBCA, class voting is required in connection with certain amendments of a
corporation’s charter, a merger or consolidation requiring shareholder approval
(if the plan of merger or consolidation contains any provision which, if
contained in a charter amendment, would require class voting) and certain sales
of all or substantially all of the corporation’s assets.
A21-DELAWARE
Under
the
DGCL, class voting is not required in connection with such matters, except
in
the case of a charter amendment which increases or decreases the authorized
shares or par value of the share of a class or adversely affects a class of
shares.
REMOVAL
OF DIRECTORS
A21-TEXAS
As
permitted by the TBCA, the bylaws of a21-Texas provide that directors may be
removed with or without cause by the vote of a majority of the shares entitled
to vote thereon.
A21-DELAWARE
Under
the
DGCL, a majority of stockholders may remove a director with or without cause
except: (i) if the board of directors of a Delaware corporation is classified
(i.e., elected for staggered terms), in which case a director may only be
removed for cause, unless the corporation’s certificate of incorporation
provides otherwise; and (ii) in the case of a corporation which possesses
cumulative voting, if less than the entire board is to be removed, no director
may be removed without cause if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of the entire
board of directors, or, if there be classes of directors, at an election of
the
class of directors of which he is a part.
INSPECTION
OF BOOKS AND RECORDS
A21-TEXAS
The
TBCA
provides that a person who has been a stockholder for six months immediately
preceding his demand, or is the holder of at least 5% of all the outstanding
shares of the corporation may inspect a corporation’s books and records for
proper purposes.
A21-DELAWARE
The
DGCL
provides that any stockholder may examine the list of stockholders of a
corporation and, upon written demand, may inspect any other corporate books
and
records for proper purposes.
INDEMNIFICATION
A21-TEXAS
Under
Texas law, a corporation is permitted to provide indemnification or advancement
of expenses, by articles of incorporation or bylaw provision, resolution of
the
shareholders or directors, agreement, or otherwise, against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by
the
person in connection with the proceedings. However, if the person is found
liable to the corporation, or if the person is found liable on the basis he
received an improper personal benefit, indemnification under Texas law is
limited to the reimbursement of reasonable expenses and no indemnification
will
be available if the person is found liable for willful or intentional
misconduct.
As
permitted by the TBCA, a21-Texas has agreed to limit the liability of its
directors and indemnify its directors and officers, in each case, to the fullest
extent permitted by Texas law.
A21-DELAWARE
Delaware
law permits a corporation to indemnify directors, officers, employees, or agents
against judgments, fines, amounts paid in settlement, and reasonable costs,
expenses and counsel fees paid or incurred in connection with any proceeding,
other than an action by or in the right of the corporation, to which such
director, officer, employee or agent may be a party, provided such a director,
officer employee or agent shall have acted in good faith and shall have
reasonably believed (a) in the case of a civil proceeding, that his conduct
was
in or not opposed to the best interests of the corporation, or (b) in the case
of a criminal proceeding, that he had no reasonable cause to believe his conduct
was unlawful. In connection with an action by or in the right of the corporation
against a director, officer, employee or agent, the corporation has the power
to
indemnify such director, officer, employee or agent for reasonable expenses
incurred in connection with such suit (a) if such person acted in good faith
and
in a manner not opposed to the best interests of the corporation, and (b) if
found liable to the corporation, only if ordered by a court of law. Section
145
of the DGCL provides that such section is not exclusive of any other
indemnification rights which may be granted by a corporation to its directors,
officers, employees or agents.
As
permitted by the DGCL, a21-Delaware has agreed to limit the liability of its
directors and indemnify its directors and officers, in each case, to the fullest
extent permitted by Delaware law.
Appendix
F
Art.
5.11. Rights of Dissenting Shareholders in the Event of Certain Corporate
Actions
A.
Any
shareholder of a domestic corporation shall have the right to dissent from
any
of the following corporate actions:
(1)
Any
plan of merger to which the corporation is a party if shareholder approval
is
required by Article 5.03 or 5.16 of this Act and the shareholder holds shares
of
a class or series that was entitled to vote thereon as a class or
otherwise;
(2)
Any
sale, lease, exchange or other disposition (not including any pledge, mortgage,
deed of trust or trust indenture unless otherwise provided in the articles
of
incorporation) of all, or substantially all, the property and assets, with
or
without good will, of a corporation if special authorization of the shareholders
is required by this Act and the shareholders hold shares of a class or series
that was entitled to vote thereon as a class or otherwise;
(3)
Any
plan of exchange pursuant to Article 5.02 of this Act in which the shares of
the
corporation of the class or series held by the shareholder are to be
acquired.
B.
Notwithstanding the provisions of Section A of this Article, a shareholder
shall
not have the right to dissent from any plan of merger in which there is a single
surviving or new domestic or foreign corporation, or from any plan of exchange,
if:
(1)
the
shares, or depository receipts in respect of the shares, held by the shareholder
are part of a class or series, shares, or depository receipts in respect of
the
shares, of which are on the record date fixed to determine the shareholders
entitled to vote on the plan of merger or plan of exchange:
(a)
listed on a national securities exchange;
(b)
listed on the Nasdaq Stock Market (or successor quotation system) or designated
as a national market security on an interdealer quotation system by the National
Association of Securities Dealers, Inc., or successor entity; or
(c)
held
of record by not less than 2,000 holders;
(2)
the
shareholder is not required by the terms of the plan of merger or plan of
exchange to accept for the shareholder's shares any consideration that is
different than the consideration (other than cash in lieu of fractional shares
that the shareholder would
otherwise
be entitled to receive) to be provided to any other holder of shares of the
same
class or series of shares held by such shareholder; and
(3)
the
shareholder is not required by the terms of the plan of merger or the plan
of
exchange to accept for the shareholder's shares any consideration other
than:
(a)
shares, or depository receipts in respect of the shares, of a domestic or
foreign corporation that, immediately after the effective time of the merger
or
exchange, will be part of a class or series, shares, or depository receipts
in
respect of the shares, of which are:
(i)
listed, or authorized for listing upon official notice of issuance, on a
national securities exchange;
(ii)
approved for quotation as a national market security on an interdealer quotation
system by the National Association of Securities Dealers, Inc., or successor
entity; or
(iii)
held of record by not less than 2,000 holders;
(b)
cash
in lieu of fractional shares otherwise entitled to be received; or
(c)
any
combination of the securities and cash described in
Subdivisions
(a) and (b) of this subsection.
A.
Any
shareholder of any domestic corporation who has the right to dissent from any
of
the corporate actions referred to in Article 5.11 of this Act may exercise
that
right to dissent only by complying with the following procedures:
(1)(a)
With respect to proposed corporate action that is submitted to a vote of
shareholders at a meeting, the shareholder shall file with the corporation,
prior to the meeting, a written objection to the action, setting out that the
shareholder's right to dissent will be exercised if the action is effective
and
giving the shareholder's address, to which notice thereof shall be delivered
or
mailed in that event. If the action is effected and the shareholder shall not
have voted in favor of the action, the corporation, in the case of action other
than a merger, or the surviving or new corporation (foreign or domestic) or
other entity that is liable to discharge the shareholder's right of dissent,
in
the case of a merger, shall, within ten (10) days after the action is effected,
deliver or mail to the shareholder written notice that the action has been
effected, and the shareholder may, within ten (10) days from the delivery or
mailing of the notice, make written demand on the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, for
payment of the fair value of the shareholder's shares. The fair value of the
shares shall be the value thereof as of the day immediately preceding the
meeting, excluding any appreciation or depreciation in anticipation of the
proposed action. The demand shall state the number and class of the shares
owned
by the shareholder and the fair value of the shares as estimated by the
shareholder. Any shareholder failing to make demand within the ten (10) day
period shall be bound by the action.
(b)
With
respect to proposed corporate action that is approved pursuant to Section A
of
Article 9.10 of this Act, the corporation, in the case of action other than
a
merger, and the surviving or new corporation (foreign or domestic) or other
entity that is liable to discharge the shareholder's right of dissent, in the
case of a merger, shall, within ten (10) days after the date the action is
effected, mail to each shareholder of record as of the effective date of the
action notice of the fact and date of the action and that the shareholder may
exercise the shareholder's right to dissent from the action. The notice shall
be
accompanied by a copy of this Article and any articles or documents filed by
the
corporation with the Secretary of State to effect the action. If the shareholder
shall not have consented to the taking of the action, the shareholder may,
within twenty (20) days after the mailing of the notice, make written demand
on
the existing, surviving, or new corporation (foreign or domestic) or other
entity, as the case may be, for payment of the fair value of the shareholder's
shares. The fair value of the shares shall be the value thereof as of the date
the written consent authorizing the action was delivered to the corporation
pursuant to Section A of Article 9.10 of this Act, excluding any appreciation
or
depreciation in anticipation of the action. The demand shall state the number
and class of shares owned by the dissenting shareholder and the fair value
of
the shares as estimated by the shareholder. Any shareholder failing to make
demand within the twenty (20) day period shall be bound by the
action.
(2)
Within twenty (20) days after receipt by the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, of a
demand for payment made by a dissenting shareholder in accordance with
Subsection (1) of this Section, the corporation (foreign or domestic) or other
entity shall deliver or mail to the shareholder a written notice that shall
either set out that the corporation (foreign or domestic) or other entity
accepts the amount claimed in the demand and agrees to pay that amount within
ninety (90) days after the date on which the action was effected, and, in the
case of shares represented by certificates, upon the surrender of the
certificates duly endorsed, or shall contain an estimate by the corporation
(foreign or domestic) or other entity of the fair value of the shares, together
with an offer to pay the amount of that estimate within ninety (90) days after
the date on which the action was effected, upon receipt of notice within sixty
(60) days after that date from the shareholder that the shareholder agrees
to
accept that amount and, in the case of shares represented by certificates,
upon
the surrender of the certificates duly endorsed.
(3)
If,
within sixty (60) days after the date on which the corporate action was
effected, the value of the shares is agreed upon between the shareholder and
the
existing, surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, payment for the shares shall be made within ninety (90)
days
after the date on which the action was effected and, in the case of shares
represented by certificates, upon surrender of the certificates duly endorsed.
Upon payment of the agreed value, the shareholder shall cease to have any
interest in the shares or in the corporation.
B.
If,
within the period of sixty (60) days after the date on which the corporate
action was effected, the shareholder and the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may be, do not
so
agree, then the shareholder or the corporation (foreign or domestic) or other
entity may, within sixty (60) days after the expiration of the sixty (60) day
period, file a petition in any court of competent jurisdiction in the county
in
which the principal office of the domestic corporation is located, asking for
a
finding and determination of the fair value of the shareholder's shares. Upon
the filing of any such petition by the shareholder, service of a copy thereof
shall be made upon the corporation (foreign or domestic) or other entity, which
shall, within ten (10) days after service, file in the office of the clerk
of
the court in which the
petition
was filed a list containing the names and addresses of all shareholders of
the
domestic corporation who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by the
corporation (foreign or domestic) or other entity. If the petition shall be
filed by the corporation (foreign or domestic) or other entity, the petition
shall be accompanied by such a list. The clerk of the court shall give notice
of
the time and place fixed for the hearing of the
petition
by registered mail to the corporation (foreign or domestic) or other entity
and
to the shareholders named on the list at the addresses therein stated. The
forms
of the notices by mail shall be approved by the court. All shareholders thus
notified and the corporation (foreign or domestic) or other entity shall
thereafter be bound by the final judgment of the court.
C.
After
the hearing of the petition, the court shall determine the shareholders who
have
complied with the provisions of this Article and have become entitled to the
valuation of and payment for their shares, and shall appoint one or more
qualified appraisers to determine that value. The appraisers shall have power
to
examine any of the books and records of the corporation the shares of which
they
are charged with the duty of valuing, and they shall make a determination of
the
fair value of the shares upon such investigation as to them may seem proper.
The
appraisers shall also afford a reasonable opportunity to the parties interested
to submit to them pertinent evidence as to the value of the shares. The
appraisers shall also have such power and authority as may be
conferred
on Masters in Chancery by the Rules of Civil Procedure or by the order of their
appointment.
D.
The
appraisers shall determine the fair value of the shares of the shareholders
adjudged by the court to be entitled to payment for their shares and shall
file
their report of that value in the office of the clerk of the court. Notice
of
the filing of the report shall
be
given
by the clerk to the parties in interest. The report shall be subject to
exceptions to be heard before the court both upon the law and the facts. The
court shall by its judgment determine the fair value of the shares of the
shareholders entitled to payment for
their
shares and shall direct the payment of that value by the existing, surviving,
or
new corporation (foreign or domestic) or other entity, together with interest
thereon, beginning 91 days after the date on which the applicable corporate
action from which
the
shareholder elected to dissent was effected to the date of such judgment, to
the
shareholders entitled to payment. The judgment shall be payable to the holders
of uncertificated shares immediately but to the holders of shares represented
by
certificates only upon, and simultaneously with, the surrender to the existing,
surviving, or new corporation (foreign or domestic) or other entity, as the
case
may be, of duly endorsed certificates for those shares. Upon payment of the
judgment, the dissenting shareholders shall cease to have any interest in those
shares or in the corporation. The court shall allow the appraisers a reasonable
fee as court costs, and all court costs shall be allotted between the parties
in
the manner that the court determines to be fair and equitable.
E.
Shares
acquired by the existing, surviving, or new corporation (foreign or domestic)
or
other entity, as the case may be, pursuant to the payment of the agreed value
of
the shares or pursuant to payment of the judgment entered for the value of
the
shares, as in this Article provided, shall, in the case of a merger, be treated
as provided in the plan of merger and, in all other cases, may be held and
disposed of by the corporation as in the case of other treasury
shares.
F.
The
provisions of this Article shall not apply to a merger if, on the date of the
filing of the articles of merger, the surviving corporation is the owner of
all
the outstanding shares of the other corporations, domestic or foreign, that
are
parties to the merger.
G.
In the
absence of fraud in the transaction, the remedy provided by this Article to
a
shareholder objecting to any corporate action referred to in Article 5.11 of
this Act is the exclusive remedy for the recovery of the value of his shares
or
money damages to the
shareholder
with respect to the action. If the existing, surviving, or new corporation
(foreign or domestic) or other entity, as the case may be, complies with the
requirements of this Article, any shareholder who fails to comply with the
requirements of this Article shall not be entitled to bring suit for the
recovery of the value of his shares or money damages to the shareholder with
respect to the action.
A.
Any
shareholder who has demanded payment for his shares in accordance with either
Article 5.12 or 5.16 of this Act shall not thereafter be entitled to vote or
exercise any other rights of a shareholder except the right to receive payment
for his shares pursuant to the provisions of those articles and the right to
maintain an appropriate action to obtain relief on the ground that the corporate
action would be or was fraudulent, and the respective shares for which payment
has been demanded shall not thereafter be considered outstanding for the
purposes of any subsequent vote of shareholders.
B.
Upon
receiving a demand for payment from any dissenting shareholder, the corporation
shall make an appropriate notation thereof in its shareholder records. Within
twenty (20) days after demanding payment for his shares in accordance with
either Article 5.12 or 5.16 of this Act, each holder of certificates
representing shares so demanding payment shall submit such certificates to
the
corporation for notation thereon that such demand has been made. The failure
of
holders of certificated shares to do so shall, at the option of the corporation,
terminate such shareholder's rights under Articles 5.12 and 5.16 of this Act
unless a court of competent jurisdiction for good and sufficient cause shown
shall otherwise direct. If uncertificated shares for which payment has been
demanded or shares represented by a certificate on which notation has been
so
made shall be transferred, any new certificate issued therefor shall bear
similar notation together with the name of the original dissenting holder of
such shares and a transferee of such shares shall acquire by such transfer
no
rights in the corporation other than those which the original dissenting
shareholder had after making demand for payment of the fair value
thereof.
C.
Any
shareholder who has demanded payment for his shares in accordance with either
Article 5.12 or 5.16 of this Act may withdraw such demand at any time before
payment for his shares or before any petition has been filed pursuant to Article
5.12 or 5.16 of this Act asking for a finding and determination of the fair
value of such shares, but no such demand may be withdrawn after such payment
has
been made or, unless the corporation shall consent thereto, after any such
petition has been filed. If, however, such demand shall be withdrawn as
hereinbefore provided, or if pursuant to Section B of this Article the
corporation shall terminate the shareholder's rights under Article 5.12 or
5.16
of this Act, as the case may be, or if no petition asking for a finding and
determination of fair value of such shares by a court shall have been filed
within the time provided in Article 5.12 or 5.16 of this Act, as the case may
be, or if after the hearing of a petition filed pursuant to Article 5.12 or
5.16, the court shall determine that such shareholder is not entitled to the
relief provided by those articles, then, in any such case, such shareholder
and
all persons claiming under him shall be conclusively presumed to have approved
and ratified the corporate action from which he dissented and shall be bound
thereby, the right of such shareholder to be paid the fair value of his shares
shall cease, and his status as a shareholder shall be restored without prejudice
to any corporate proceedings which may have been taken during the interim,
and
such shareholder shall be entitled to receive any dividends or other
distributions made to shareholders in the interim.