“B” Reorganization: Acquisition by
One Corporation of Stock of Another Corporation
(1) Agreement and plan of
reorganization
AGREEMENT AND PLANS OF REORGANIZATION,
dated as of [date], among The Sussex Corporation, a Delaware corporation,
hereinafter called Sussex; The Marlboro Corporation, a Delaware corporation,
hereinafter called Marlboro; and John Irvine, Robert Edwards, Frederick Blaine,
Mark Jones, William Smith, Philip McKay, John Rhodes, Lewis Arnold, Richard
Toole, and Robert Niven, hereinafter called the Stockholders.
1. Plan of Reorganization. The Stockholders are the owners of all of the issued and
outstanding stock of Marlboro, which consists of 5,000 shares of common stock
of the par value of 25 cents per share. It is the intention of the parties
hereto that all of the issued and outstanding capital stock of Marlboro shall
be acquired by Sussex in exchange solely for its voting stock.
2. Exchange of Shares. Sussex and the Stockholders agree that all of the 5,000 shares of
Marlboro shall be exchanged with Sussex for 25,000 shares of the common stock
of Sussex. Such shares shall be issued in certificates of such denominations,
amounts, and names as may be requested by the respective Stockholders. The
Stockholders represent and warrant that they will hold such shares of common
stock of Sussex for investment.
3. Delivery of Shares. On the closing date, the Stockholders will deliver certificates for
the shares of Marlboro duly endorsed with signatures guaranteed and with
documentary stamps affixed at the Stockholders’ expense so as to make Sussex
the sole owner thereof, free and clear of all claims and encumbrances; and on
such closing date delivery of the Sussex shares, on which documentary stamp
taxes will have been paid by Sussex, will be made to the Stockholders as above
set forth. Delivery will be made at such place in or about Los Angeles,
California, as may be determined by the parties. Time is of the essence.
4. Representations of Stockholders. The Stockholders represent and warrant as follows:
(a)
As of the closing date they will be the sole
owners of the shares appearing of record in their names; such shares will be
free from claims, liens, or other encumbrances; and, subject to the escrow of
such shares established pursuant to permits heretofore issued to Marlboro by
the Commissioner of Corporations of the State of California with respect to the
issuance thereof in escrow, they will have the unqualified right to transfer
such shares.
(b)
The shares constitute validly issued shares of Marlboro,
fully paid and nonassessable.
(c)
The audited financial statements of Marlboro, as
of [date], which will be delivered to Sussex prior to the closing date, are
true and complete statements of the financial condition of Marlboro as of that
date; there are no substantial liabilities, either fixed or contingent, not
reflected in such financial statements other than contracts or obligations in
the usual course of business; and no such contracts or obligations in the usual
course of business are liens or other liabilities which, if disclosed, would
alter substantially the financial condition of Marlboro as reflected in such
financial statements.
(d)
Since [date], there have not been, and prior to
the closing date there will not be, any material changes in the financial
position of Marlboro, except changes arising in the ordinary course of
business.
(e)
Marlboro is not involved in any pending
litigation or governmental investigation or proceeding not reflected in such
financial statements or otherwise disclosed in writing to Sussex and, to the
knowledge of Marlboro or the Stockholders, no litigation or governmental
investigation or proceeding is threatened against Marlboro.
(f)
As of the closing date, Marlboro will be in good
standing as a Delaware corporation.
5. Representations of Acquiring Corporation. Sussex represents and warrants as follows:
(a)
As of the closing date, the Sussex shares to be
delivered to the Stockholders will constitute the valid and legally issued
shares of Sussex, fully paid and nonassessable, and will be legally equivalent
in all respects to the common stock of Sussex issued and outstanding as of the
date hereof.
(b)
The officers of Sussex are duly authorized to
execute this agreement pursuant to authorization of its stockholders.
(c)
Sussex’s balance sheet dated [date], is a true
and complete statement, as of that date, of its financial condition, and its
Statement of Earnings for the nine months ended [date], fairly presents the
results of its operations for such period; there are no substantial liabilities,
either fixed or contingent, not reflected in such financial statements other
than contracts or obligations in the usual course of business; and no such
contracts or obligations in the usual course of business are liens or other
liabilities which, if disclosed, would alter substantially the financial
condition of Sussex as reflected in such financial statements.
(d)
Since [date], there have not been, and prior to
the closing date there will not be, any material changes in the financial
position of Sussex, except changes arising in the ordinary course of business.
(e)
Sussex is not involved in any pending litigation
or governmental investigation or proceeding not reflected in such financial
statements or otherwise disclosed in writing to the Stockholders.
(f)
As of the closing date, Sussex will be in good
standing as a Delaware corporation.
(g)
The shares of Marlboro are being acquired by
Sussex as an investment, and there is no present intention on the part of
Sussex to dispose of such shares.
6. Agreement as to Escrow. All of the issued and outstanding shares of Marlboro are presently
held in escrow pursuant to an order of the Commissioner of Corporations of the
State of California, the Stockholders agree that they will cause an Order of
such Commissioner of Corporations to issue pursuant to which such shares may be
transferred to Sussex within the escrow.
7. Conditions of Closing. The closing date herein referred to shall be [date], or such other
date as the parties hereto may mutually agree upon. All representations and
covenants herein made shall survive the closing. At the closing the
Stockholders hereby designate, nominate, constitute, and appoint Robert Edwards
and Mark Jones, and each of them, as their agents and attorneys in fact to
accept delivery of the certificates of Sussex stock to be issued in their
respective names, and to give a good and sufficient receipt and acquittance for
the same, and in connection therewith to make delivery of their stock in
Marlboro to Sussex. The obligations of Sussex hereunder are conditioned upon
its obtaining a permit of the Commissioner of Corporations of the State of
California for the issuance of its common stock to Stockholders as hereinabove
provided.
8. Prohibited Acts. Marlboro agrees not to do any of the following things prior to the
closing date, and the Stockholders agree that prior to the closing date they
will not request or permit Marlboro to do any of the following things:
(a)
Declare or pay any dividends or other
distributions on its stock or purchase or redeem any of its stock;
(b)
Issue any stock or other securities, including
any right or option to purchase or otherwise acquire any of its stock, or issue
any notes or other evidences of indebtedness not in the usual course of
business;
(c)
Make capital expenditures in excess of an
aggregate of $25,000 except with the consent of Sussex.
9. Delivery of Records. The Stockholders agree that on or before the closing date they will
cause to be delivered to Sussex such corporate records or other documents of
Marlboro as Sussex may request.
10. Notices. Any
notice which any of the parties hereto may desire to serve upon any of the
other parties hereto shall be in writing and shall be conclusively deemed to
have been received by the party to whom addressed, if mailed, postage prepaid,
United States Registered Mail, to the following addresses:
The Sussex Corporation, 100 Broad
Avenue, Los Angeles, California, Attention of Mark Jones, President
Stockholders: c/o Mr. William Smith,
The Marlboro Corporation, 100 1st Avenue, San Diego, California.
11. Successors.
This agreement shall be binding upon and inure to the benefit of the heirs,
personal representatives, successors, and assigns of the parties.
Executed in multiple counterparts,
each of which shall be deemed a duplicate original, as of the date first above
written.
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Corporate Seal