EX-2.4 2 exh2_4.txt FIRST AMENDMENT TO REORG Exhibit 2.4 Page 1 of 6 FIRST ADDENDUM TO REORGANIZATION AGREEMENT This First Addendum to the Reorganization Agreement ("Agreement") between and among Tamboril Cigar Company, a corporation organized under the laws of the State of Delaware (the "Company"), Axion Power Corporation, a Canadian Federal Corporation, ("Axion") and the persons identified in Schedules A-1 through A-4 (the "Axion Securityholders") is made, entered into and effective this 9th day of January 2004. WHEREAS, C and T Co. Incorporated and Dr. Igor Filipenko have agreed to join in and execute the Reorganization Agreement upon the terms and conditions specified in this First Addendum; and WHEREAS, Turitella Corporation has agreed to join in the Reorganization Agreement and become an additional Axion Securityholder upon the terms and conditions specified in this First Addendum; NOW, THEREFORE, in consideration of the mutual covenants, obligations and benefits hereinafter set forth, the parties hereto agree as follows: 1. Paragraph 1(c) of the agreement is hereby amended to read in its entirety as follows: c. Capitalization. The authorized capital stock of Axion consists of an unlimited number of shares of common stock without par value ("Axion Common"). As of the date hereof one (1) share of Axion Common is issued and outstanding and 3,923,999 shares of common stock are issuable to the founders of Axion for out-of-pocket costs incurred and substantial personal services actually rendered in connection with the organization of Axion. All of the issued and outstanding shares of Axion Common are duly authorized, validly issued, fully paid and nonassessable and not subject to preemptive rights created by statute, Axion' Articles of Incorporation or By-Laws or any other agreement to which Axion is a party or bound. Axion has received the full consideration for the founders' shares and the shares are presently issuable to the persons entitled thereto. Schedule A-1 identifies the owner of the one issued and outstanding share of Axion Common and the beneficial owners of the 3,923,999 founders' shares that will be acquired by the Company pursuant to this Agreement. Axion has previously sold $550,000 aggregate principal amount of convertible seed financing notes, which are convertible into Axion Common at a price of $.50 per share. Schedule A-2 identifies the holders of the $500,000 aggregate principal amount of Axion's convertible seed financing notes that will be acquired by the Company pursuant to this Agreement. Axion has previously sold $1,000,000 aggregate principal amount of convertible first round private placement notes, which are convertible into Axion units at a price of $.75 per unit. Each Axion unit will include one share of Axion Common and one warrant that entitles the holder to purchase one additional share of Axion Common for a period of one year upon payment of a warrant exercise price $1.00 per share. If the warrants are not exercised within six months from the issue date, the exercise price will increase to $1.50 per share. Schedule A-3 identifies the holders of the $800,000 aggregate principal amount of Axion's convertible first round private placement notes that will be acquired by the Company pursuant to this Agreement. Axion has previously sold $350,000 aggregate principal amount of convertible second round private placement notes, which are convertible into Axion units at a price of $1.00 per unit. Each Axion unit will include one share of Axion Common and one warrant that entitles the holder to purchase one additional share of Axion Common for a period of one year upon payment of a warrant exercise price $1.50 per share. If the warrants are not exercised within six months from the issue date, the exercise price will increase to $2.00 per share. Schedule A-4 identifies the holders of the $150,000 aggregate principal amount of Axion's convertible second round private placement notes that will be acquired by the Company pursuant to this Agreement. Except as set forth above, there are no bonds, debentures, notes or other debt securities presently outstanding, or any agreements, understandings or arrangements obligating Axion to issue, deliver or sell any debt securities in the future. Except as set forth above, there are no options, warrants, calls or other rights, agreements, arrangements or commitments presently outstanding, or any agreements, understandings or arrangements obligating Axion to issue, deliver, sell or enter into any such option, warrant, call or other such right, agreement, arrangement or commitment in the future. All of the Axion securities specified above are duly authorized, validly issued, fully paid and nonassessable and are owned by the persons specified in Schedules A-1 through A-4, free and clear of any security interests, liens, claims, pledges, agreements, limitations on voting rights, charges or other encumbrances of any nature whatsoever ("Encumbrances"). 2. Paragraph 3(c) of the agreement is hereby amended to read in its entirety as follows: c. Capitalization. The Company has the corporate authority to issue a total of 400,000,000 shares of $.0001 par value common stock and 100,000,000 shares of $0.0001 par value preferred stock, of which 30,000,000 shares of common stock are presently issued and outstanding. All issued and outstanding shares of the Company's common stock are fully paid, validly issued and nonassessable. Except as specifically provided herein, no other capital stock of the Company will be outstanding on the Closing Date. Except as specifically provided herein, no stockholder of the Company will have or obtain any registration rights with respect to any shares of the Company's capital stock that are issued and outstanding on the Closing Date. On the closing date, after paying all outstanding third-party debts, the Company will have no material assets and approximately $484,123 in related party debt owed to John L. Petersen and Sally A. Fonner. Immediately after the closing of this agreement, the Company will issue 1,865,731 common stock purchase warrants to each of John L. Petersen and Sally A. Fonner in full and settlement of all related party debts. The warrants will expire on December 31, 2005 and each warrant will entitle the holder to purchase one share of common stock year upon payment of a warrant exercise price of $.125 per share. On January 8, 2004, Tamboril issued a total of 3,741,462 warrants to John L. Petersen as partial compensation for legal services to be provided by Mr. Petersen in connection with the operations of Tamboril after December 31, 2004. The warrants will expire on January 8, 2006 and each warrant will entitle Mr. Petersen to purchase one share of common stock year upon payment of a warrant exercise price of $.125 per share. On January 8, 2004, C and T Co. Incorporated agreed to purchase a total of 20,000,000 Tamboril shares from John L. Petersen and Sally A. Fonner for a price of $200,000. On January 8, 2004, C and T Co. Incorporated agreed to join in the Reorganization Agreement and transfer certain contractual rights with respect to Axion and Axion's technology to Tamboril in exchange for 25,000,000 common stock purchase warrants. The warrants will expire on December 31, 2005 and each warrant will entitle the holder to purchase one share of common stock year upon payment of a warrant exercise price of $.125 per share. On January 8, 2004, Igor Filipenko agreed to transfer all of his right, title and interest in and to 340,000 Axion founders' shares and $50,000 in Axion seed financing notes to Tamboril in accordance with the provisions of the Reorganization Agreement. On January 8, 2004, Turitella Corporation agreed to purchase the equivalent of $200,000 in convertible first round private placement notes and $200,000 in convertible second round private placement notes. As a condition of the foregoing agreements, C and T Co. Incorporated, Igor Filipenko and Turitella Corporation required that the number of Tamboril shares allocated to Axion's founders be increased from 24,480,000 shares to 31,392,000 shares and that such shares be reallocated among the Axion founders as set forth in Schedule A-1 to this Addendum. As a condition of the foregoing agreements, C and T Co. Incorporated, Igor Filipenko and Turitella Corporation required that the number of shares allocated to the Mega-C Shareholders Trust be increased from 114,359,736 shares to 118,167,736 shares. Immediately after the closing of this Addendum, the Company will have 201,826,432 shares of Common Stock and 45,225,555 common stock purchase warrants issued and outstanding, which will be held beneficially and of record as follows:
Common Total Stock Warrants Ownership Tamboril Stockholders 10,000,000 6,758,859 16,758,859 C and T Co. Incorporated 20,000,000 25,000,000 45,000,000 MCP stockholders trust 118,167,736 118,167,736 Axion Founders 31,392,000 31,392,000 Seed Financing 8,800,000 8,800,000 First Round Private Placement 10,666,696 10,666,696 21,333,392 Second Round Private Placement 2,800,000 2,800,000 5,600,000 ---------- ---------- ---------- Totals 201,826,432 45,225,555 247,051,987
3. Except as specifically set forth above and the Amended Schedules attached hereto, all other provisions of the original Reorganization Agreement shall remain in full force and effect. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. TAMBORIL CIGAR COMPANY /s/ /s/s Kirk Tierney, president and director John L. Petersen, chief financial officer and director C and T Co. Incorporated /s/ Igor Filipenko, president /s/ Turitella Corporation Igor Filipenko /s/ Authorized representative EXHIBIT A SCHEDULE OF STOCK ISSUANCES PAGE 1 OF 2 AMENDED SCHEDULE A-1 HOLDERS OF COMMON STOCK AND BENEFICIAL OWNERS OF FOUNDERS SHARES Name of Stockholder or Axion Shares Tamboril Beneficial Owner Surrendered Shares Issued Thomas Kirkwood (Kirk) Tierney 90,000 720,000 Robert Averill 540,000 4,320,000 James Smith 340,000 2,720,000 James Eagan 400,000 3,200,000 Thomas Granville 404,000 3,232,000 Igor Filipenko 340,000 2,720,000 Joseph Piccirilli 340,000 2,720,000 Joseph Souccar 340,000 2,720,000 Glenn W. Patterson 450,000 3,600,000 Canadian Consultants Bureau Inc. 340,000 2,720,000 Ron Bibace 340,000 2,720,000 Schedule A-1 Total 3,924,000 31,329,000 AMENDED SCHEDULE A-2 HOLDERS OF CONVERTIBLE SEED FINANCING NOTES
Name of Convertible Principal Amount Axion Shares Tamboril Seed Financing Noteholder of Notes Issuable Shares Issued Robert Averill $50,000 100,000 800,000 James Smith $50,000 100,000 800,000 James Eagan $50,000 100,000 800,000 Thomas Granville $50,000 100,000 800,000 Igor Filipenko $50,000 100,000 800,000 Joseph Piccirilli $50,000 100,000 800,000 Joseph Souccar $50,000 100,000 800,000 HAP Investments LLC $50,000 100,000 800,000 Canadian Consultants Bureau Inc. $50,000 100,000 800,000 Infinity Group LLC $100,000 200,000 1,600,000 Schedule A-2 Total $550,000 1,100,000 8,800,000
EXHIBIT A SCHEDULE OF STOCK ISSUANCES PAGE 2 OF 2 AMENDED SCHEDULE A-3 HOLDERS OF CONVERTIBLE FIRST ROUND PRIVATE PLACEMENT NOTES
Name of Convertible First Round Private Principal Amount Axion Shares Tamboril Tamboril Placement Noteholder of Notes Issuable Shares Issued Warrants Issued Robert Averill $ 200,000 266,667 2,133,333 2,133,333 James Smith $ 100,000 133,333 1,066,667 1,066,667 James Eagan $ 100,000 133,333 1,066,667 1,066,667 Thomas Granville $ 100,000 133,333 1,066,667 1,066,667 Turitella Corporation $ 200,000 266,667 2,133,333 2,133,333 HAP Investments LLC $ 200,000 266,667 2,133,333 2,133,333 Canadian Consultants Bureau Inc. $ 100,000 133,333 1,066,667 1,066,667 Schedule A-3 Total $ 1,000,000 1,333,333 10,666,667 10,666,667
AMENDED SCHEDULE A-4 HOLDERS OF CONVERTIBLE SECOND ROUND PRIVATE PLACEMENT NOTES
Name of Convertible Second Round Private Principal Amount Axion Shares Tamboril Tamboril Placement Noteholder of Notes Issuable Shares Issued Warrants Issued James Keim $150,000 150,000 1,200,000 1,200,000 Turitella Corporation $200,000 200,000 1,600,000 1,600,000 Schedule A-4 Total $350,000 350,000 2,800,000 2,800,000