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Nevada
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88-0429812
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(State
or other Jurisdiction of
Incorporation)
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(I.R.S.
Employer
Identification
No.)
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1.
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The
shares are to terminate on the earlier of December 31, 2008 or
27 weeks
following the date of issuance if the Company fails to generate
revenue
and/or other funds of at least $1,000,000 during that 27 week
period or 54
weeks from the date of issuance if the Company fails to generate
at least
$5,000,000 during that 54 week
period.
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2.
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The
shares have no conversion or subscription rights, nor preference
on
liquidation rights, nor any rights to
dividends.
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3.
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Each
share issued grants the holder thereof voting rights equal to
eighteen
shares of the Company’s common stock with respect to the following matters
only:
a)
actions requiring shareholder approval relating specifically
to (i)
amendments or changes to the Corporation’s Articles of Incorporation which
cause increases or decreases in the number of authorized shares
of the
Corporation’s Common Stock and/or which authorize the Corporation to issue
other securities, and/or (ii) a merger,
consolidation, exchange of shares, recapitalization, reorganization,
or
other similar event whereby shares of Common Stock are changed
into the
same or a different number of shares of the same or another class
or
classes of stock or securities or other assets of the Corporation
or
another entity, and/or (iii) a sale of all or substantially all
the
Corporation’s assets; and/or b)
the election or dismissal of members of the Corporation’s Board of
Directors, provided that such voting rights shall not be exercised
by the
holder of shares of Series “B” Preferred Stock for the purpose of voting
for or against such holder’s election to or dismissal from the
Corporation’s Board of Directors.
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1.
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Additional
restrictions: (a) Each holder of such Series B Preferred stock
is
prohibited from voting in favor of any proposed merger, consolidation,
exchange of shares, recapitalization, reorganization, or other
similar
event whereby shares of common stock are changed into the same
or a
different number of shares of the same or another class or classes
of
stock or securities or other assets of the Corporation or another
entity
if the a majority of the issued and outstanding shares of Common
Stock
vote against such any such aforementioned event; and (b) Each
holder of
such Series B Preferred stock is prohibited from voting in favor
of any
proposed sale of substantially all of the Company’s assets if a majority
of the issued and outstanding shares of common stock vote against
any such
proposed sale
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2.
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Consideration
received by Company
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(a)
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Each
of the two individuals receiving a majority of such shares (Mr.
Rosenfeld
and Dr. Hinojosa) agreed that he would not claim or attempt to
collect any
of the deferred and unpaid compensation as of February 28, 2007
until such
time as all of the Company’s loans currently outstanding, other than loans
made by the holders of such shares, have been repaid in full
and until
such time as the Company’s cash flow is sufficient to satisfy the
operational and development requirements of the Company;
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(b)
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Each
of the two individuals receiving a majority of such shares (Mr.
Rosenfeld
and Dr. Hinojosa) agreed that he would not claim or attempt to
collect any
sums loaned or otherwise advanced to the Company by such individual
as of
February 28, 2007, until such time as all of the Company’s loans currently
outstanding and currently due and payable, other than loans made
by the
holders of such shares, have been paid in full, and until such
time as the
Company’s cash flow is sufficient to satisfy the operational and
development requirements of the
Company;
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(c)
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Each
of the two individuals receiving the balance of such shares (Jorge
Hinojosa and Willie Rodriguez) agreed that he would not claim
or attempt
to collect in excess of 30% of the deferred and unpaid compensation
as of
February 28,2007 until such time as all of the Company’s loans currently
outstanding, other than loans made by the holders of such shares,
have
been repaid in full; and each of the same individuals agreed
that he would
not claim or attempt to claim in excess of 30% of any sums loaned
or
otherwise advanced to the Company by such individual as of February
28,
2007, until such time as all of the Company’s loans currently outstanding
and currently due and payable, other than loans made by other
holders of
such shares, have been paid in
full;
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(d)
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The
agreement with each individual relating to restrictions on making
claims
for deferred compensation and/or repayment of loans remain in
force until
such time as the shares of Series B Preferred stock issued to
such
individual are terminated or otherwise
cancelled.
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1.
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With
respect to those matters on which the holders of such shares
may vote,
such holders in the aggregate would have voting power equal to
180 Million
shares out of a current total of 379,785,734 million possible
votes,
computed by the sum of the total shares of common stock currently
issued
and outstanding, or 199,785,734 shares, plus the voting power
attributable
to the 10 million shares of Series B Preferred stock. To the
extent
approval by a majority of the voting power of the issued and
outstanding
shares of stock is required with respect to an action of shareholders,
whether at a meeting of shareholders or based on the written
consent of
stockholders without a meeting, the holders of such Series B
Preferred
Stock would in the aggregate be entitled to 180 Million of the
189,892,318
Million votes currently needed for approval of any action which
is within
the parameters of the voting rights to which such shares of Series
B
Preferred shares are entitled.
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2.
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With
respect to any matter relating to a merger, consolidation of
sale of
substantially all of the Company’s assets, if a majority of the
outstanding shares of common stock voted against such an action,
the
holders of the Series B Preferred would not be entitled to vote
in favor
of such action. Accordingly, the issuance of the Series B Preferred
shares
will have no effect in utilizing the voting power derived from
the shares
of Series B Preferred stock to force such an action upon the
Company to
the extent such action is not otherwise approved by a vote of
majority of
the issued and outstanding shares of common stock .
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3.
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With
respect to the dismissal or election of any director, an individual
holder
of shares of Series B Preferred is not entitled to vote such
shares if
such holder is the director in question. Since two of the four
individuals
who were issued shares of the Series B Preferred Stock are currently
directors, the following would result as an illustration: Dr.
Raul
Hinojosa: Dr Hinojosa was issued 4,400,000 shares of the Series
B
Preferred; accordingly, Dr Hinojosa could not utilize the 79,200,000
votes
otherwise granted to him pursuant to the provisions of the Series
B
Preferred shares in connection with his election or dismissal
from the
Board of Directors. The holders of the remaining shares of Series
B
Preferred issued and outstanding would be entitled to 100.8 Million
votes
in the aggregate, or significantly less than a majority of the
voting
power required to elect of dismiss a director at a shareholders
meeting.
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Name
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Share
Issued
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Deferred
Compensation
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Loans/Advances
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Raul
Hinojosa
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4,400,000
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$215,000
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$375,000
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RM
Rosenfeld
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3,400,000
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$215,000
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$250,000
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Jorge
Hinojosa
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1,600,000
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$97,500
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$116,848
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W
Rodriguez
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600,000
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$
80,000
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$
12,800
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(a)
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Financial
Statements of Businesses
Acquired.
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(b)
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Pro
Forma Financial Information.
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(c)
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Shell
Company Transactions.
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(d)
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Exhibits.
The following materials are filed as exhibits to this Current
Report on
Form 8-K
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NO
BORDERS INC
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| Date: March 9, 2007 | By: | /s/ Robert M Rosenfeld |
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Name: Robert M Rosenfeld |
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| Title: Chief Executive Officer | ||