AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
by and among
New Millennium Media International, Inc.
New Millennium Media, Inc.
a wholly owned subsidiary of New Millennium Media International, Inc.
and
UNERGI, Inc.
dated
August 31, 1999
TABLE OF CONTENTS
Section 1. The Merger......................................................1
1.1 Actions to be Taken.............................................1
1.2 Conversion of Target Securities ................................2
1.3 Exchange of Certificates........................................2
1.4 Fractional Shares...............................................3
1.5 Unexchanged Certificates........................................3
1.6 Legend on Parent Certificates Issued in Conversion of the
Target Common Stock.............................................3
1.7 Filing of Merger Documents .....................................3
Section 2. Representations and Warranties of Target .......................3
2.1 Corporate Organization and Good Standing .......................3
2.2 Capitalization..................................................4
2.3 Authorization, Execution and Delivery...........................4
2.4 Financial Statements ...........................................4
2.5 Absence of Undisclosed Liabilities .............................4
2.6 Absence of Certain Changes......................................4
2.7 Litigation, Etc. ...............................................4
2.8 Contracts.......................................................5
2.9 Title...........................................................5
2.10 Tax Returns.....................................................5
2.11 No Violation....................................................5
2.12 Books and Records...............................................5
2.13 Disclosure......................................................5
2.14 Broker's or Finder's Fees.......................................5
Section 3. Representations and Warranties of Parent and Sub ...............6
3.1 Corporate Organization..........................................6
3.2 Capitalization..................................................6
3.3 Authorization, Execution and Delivery...........................6
3.4 Financial Statements............................................6
3.5 Absence of Undisclosed Liabilities..............................7
3.6 Absence of Certain Changes......................................7
3.7 Litigation......................................................7
3.8 Contracts.......................................................7
3.9 Title...........................................................7
3.10 Tax Returns.....................................................7
3.11 No Violation....................................................7
3.12 Books and Records...............................................7
3.13 Continuity of Business Enterprise...............................7
3.14 Compliance with Law ............................................7
3.15 Disclosure......................................................8
3.16 Broker's or Finder's Fees.......................................8
Section 4. Conduct of Target Pending the Effective Date....................8
4.1 Regular Course of Business......................................8
4.2 Restricted Activities and Transactions..........................8
4.3 Advice of Changes...............................................9
4.4 Access to Records and Properties................................9
Section 5. Conduct of Parent and Sub Pending the Effective Date............9
5.1 Regular Course of Business......................................9
5.2 Restricted Activities and Transactions.........................10
5.3 Advice of Changes..............................................10
5.4 Access to Records and Properties...............................10
5.5 Guarantee of Sub Obligations...................................11
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Section 6 MUTUAL COVENANTS...............................................11
6.1 Confidentiality ...............................................11
6.2 Expenses.......................................................11
6.3 Further Assurances.............................................12
Section 7. Conditions Precedent to Obligation of Target...................12
7.1 Parent and Sub Representations and Warranties..................12
7.2 Parent and Sub Covenants.......................................12
7.3 Guarantee of Sub Obligations...................................12
Section 8. Conditions Precedent to Obligation of Parent ..................12
8.1 Target's Representations and Warranties........................12
8.2 Target's Covenants.............................................12
8.3 Funding........................................................12
Section 9. Designation of Agent for Service...............................12
Section 10. Stand-still Agreement and Break-off Fee........................13
Section 11. Notice of Events...............................................13
Section 12. Termination....................................................13
12.1 Circumstances of Termination...................................13
12.2 Effect of Termination..........................................14
Section 13. General Provisions.............................................14
13.1 Further Assurances.............................................14
13.2 Waiver.........................................................14
13.3 Entire Agreement...............................................14
13.9 Headings.......................................................14
13.5 Governing Law..................................................14
13.6 Assignment.....................................................14
Section 14. Survival of Representations, Warranties and Agreements ........15
Section 15. Indemnity Agreements of Parent and Target......................15
Section 16. Other Agreements ..............................................15
16.1 Public Disclosure..............................................15
16.2 Notices........................................................15
16.3 Binding Effect.................................................16
16.4 Entire Agreement...............................................16
16.5 Schedules and Exhibits.........................................16
16.6 Applicable Law and Jurisdiction ...............................16
16.7 No Benefit to Third Parties....................................16
16.8 Counterparts...................................................16
16.9 Acknowledgments................................................17
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Exhibits and Schedules
----------------------
Schedule 1.1(d) Officers and Directors of Surviving Corporation
Schedule 1.3 Target Shareholder Information
Schedule 2.2 Obligations to Issue Shares Pursuant to Subscription
Agreement
Schedule 2.5 Target Liabilities
Schedule 2.6 Changes of Target
Schedule 2.7 Litigations, etc.
Schedule 2.8 Contracts of Target
Schedule 2.9 Properties of Target
Schedule 3.5 Parent Liabilities
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AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER
AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER ("Amended Agreement")
dated as of August 31, 1999, by and among New Millennium Media International,
Inc., a Colorado corporation ("Parent" or "NMNI"), New Millennium Media, Inc., a
Colorado corporation and wholly-owned subsidiary of Parent ("Sub"), and UNERGI,
Inc., a Nevada corporation ("Target" or "UNERGI") (Sub and Target being
hereinafter collectively referred to as the "Constituent Corporations").
RECITALS
--------
A. The Parent, Sub and Target entered into an Agreement and Plan of Merger
dated June __, 1999 ("Agreement"), whereby, the Parent would acquire Target by
the merger of Target into the Sub, in a transaction intended to qualify as a
tax-free reorganization under Section 386(a) of the Internal Revenue Code of
1986, as amended (the "Code"), no later than July 30, 1999, as subsequently
amended by the parties.
B. Although the Agreement has terminated by its terms, the Boards of
Directors of Parent, Sub and Target deem it advisable for the mutual benefit of
Parent, Sub and Target, and their respective stockholders, to amend and restate
the Agreement and waive any and all claims for breach thereunder.
C. The Boards of Directors of Parent, Sub and Target expect that this
transaction will further certain of their business objectives and have adopted
resolutions authorizing the transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements, representations, warranties and covenants contained herein, the
parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. The Merger
---------------------
1.1 Actions to be Taken. Subject to the terms and conditions of this
Agreement, including the fulfillment (or waiver) of all conditions to the
obligations of the parties contained herein, at the Effective Date (as
hereinafter defined) and pursuant to the laws of the States of Colorado and
Nevada, the following shall occur:
(a) Target shall be merged with: and into Sub (such transaction hereafter
referred to as the "Merger"), and Sub shall be the surviving corporation (the
"Surviving Corporation"). The separate existence and corporate organization of
Target shall cease upon filing of the Articles of Merger with the Colorado
Secretary of State and the Nevada Secretary of State, and thereupon Sub and
Target shall be a single corporation and will continue to be governed by the
laws of the State of Colorado.
(b) The Articles of Incorporation of Sub shall be the Articles of
Incorporation of the Surviving Corporation from and after the Effective Date,
subject to the right of the Surviving Corporation to amend its Articles of
Incorporation in accordance with the laws of the State of Colorado.
(c) The By-Laws of Sub as they shall exist on the Effective Date shall be
and remain the bylaws of the Surviving Corporation until the same shall be
altered, amended and repealed as therein provided.
(d) The officers and directors of Parent and Sub shall resign as of the
Effective Date and the persons set forth on Schedule 1.1(d) shall be the
officers and directors, respectively, of the Parent and the Surviving
Corporation until their successors shall have been elected and qualified.
(e) As soon as practicable following fulfillment or waiver of the
conditions specified in Sections 7 and 8 hereof, and provided that this
Agreement has not been terminated or abandoned pursuant to Section 12, the
Constituent Corporations will cause this Agreement and Plan of Merger ("Merger
Agreement") to be filed with the office of the Secretary of State of the State
of Colorado, and will cause a copy of this Agreement certified by the Secretary
of State of Colorado to be filed with the office of the Secretary of State of
the State of Nevada. Subject to and in accordance with the laws of the States of
Colorado and Nevada, the Merger will become effective at the date and time the
Article of Merger is filed with the office of the Secretary of State of Colorado
or such later time or date as May be specified in the Article of Merger (the
"Effective Date"). Each of the parties will use its best efforts to cause the
Merger to be consummated, as soon as practicable following the fulfillment or
waiver of the conditions specified in Sections 7 and 8 hereof, but no later than
August 31, 1999 ("Closing Date").
1.2 Conversion of Target Securities. The mode of carrying the merger into
effect and the manner and basis of converting the shares of Target into shares
of Parent are as follows:
(a) At the Effective Date all of the issued and outstanding shares of
Target Common Stock (as defined in Section 2.2) shall, by virtue of the Merger
and without any action on the part of the respective holders thereof, become
and be converted into the right to receive an aggregate of 16,566,667 shares of
Parent Common Stock (as defined in Section 3.2) (the "Merger Consideration") and
each share of Target Common Stock shall become and be converted into the right
to receive its pro rata portion of the Merger Consideration.
(b) Each certificate evidencing ownership of shares of Parent Common Stock
issued and outstanding on the Effective Date shall continue to evidence
ownership of the number of shares of Parent Common Stock represented thereto.
1.3 Exchange of Certificates. As promptly as practicable after the
Effective Date, each holder of an outstanding certificate or certificates
theretofore representing shares of Target Common Stock shall surrender the same
to American Securities Transfer, Inc., Denver, Colorado ("Exchange Agent"), and
shall receive in exchange a certificate or certificates representing the number
of full of Parent Common Stock into which the shares of Target Common Stock
represented by the certificate or certificates so surrendered shall have been
converted pursuant to Section 1.2. The name, address and amount of shares owned
by each holder of Target Common Stock is set forth on Schedule 1.3.
1.4 Fractional Shares. Fractional shares of Parent Common Stock shall not
be issued.
1.5 Unexchanged Certificates. Until surrendered, each outstanding
certificate which, prior to the Effective Date, represented Target Common Stock
shall be deemed for all purposes, other than the payment of dividends or other
distributions, to evidence ownership of the whole number of shares of Parent
Common Stock into which it is to be converted, and no dividend or other
distribution payable to holders of Parent Common Stock as of any date subsequent
to the Effective Date shall be paid to the holders of unexchanged certificates.
There shall be paid to the record holders of the certificates issued in exchange
therefor the amount, without interest thereon, of dividends and other
distributions which would have been payable with respect to the shares of Parent
Common Stock represented thereby.
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1.6 Legend on Parent Certificates Issued in Conversion of the Target Common
Stock. Each of the certificates representing shares of Parent Common Stock
issued upon conversion of the Target Common Stock as provided for herein shall
bear the following legend:
The securities represented by this Certificate have not been
registered under the Securities Act of 1933 (the "Act") and are
"restricted securities" as that term is defined in Rule 144 under the
Act. The securities May not be offered for sale, sold or otherwise
transferred except pursuant to an effective registration statement
under the Act or pursuant to an exemption from registration under the
Act, the availability of which is to be established to the
satisfaction of the Corporation.
1.7 Filing of Merger Documents. As soon as practicable after the Closing
Date, Sub and Target shall, in accordance with Section 1.1(e), cause the Merger
Agreement to be filed with the Secretary of State of the State of Colorado and
will cause a copy of the Merger Agreement certified by the Colorado Secretary of
State, to be filed with the office of the Secretary of State of the State of
Nevada. Target, Sub and Parent will take such other and further actions as May
be required by the applicable laws of Colorado and Nevada in connection with
such filing and in order to complete the Merger.
Section 2. Representations and Warranties of Target
---------------------------------------------------
Target represents and warrants that:
2.1 Corporate Organization and Good Standing. Target is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and is duly qualified or licensed as a foreign corporation in each other
jurisdiction where it owns or leases substantial properties. Target has no
subsidiaries. Target has the requisite corporate power and authority to own,
operate and lease its properties and to conduct its business as it is now being
conducted. Target has previously delivered to Parent a true and complete copy of
its Articles of Incorporation and Bylaws.
2.2 Capitalization. The authorized capital stock of Target consists of: (i)
20,000,000 shares of Common Stock, $.0001 par value per share ("Target Common
Stock"), of which 20,000,000 shares are issued and outstanding, fully paid and
nonassessable, which include the obligation pursuant to subscription agreements,
to issue shares of its capital stock as disclosed in Schedule 2.2 which shall be
provided to Parent no later than August 30, 1999; and (ii) 1,000,000 shares of
Series A Convertible Preferred Stock, $.0001 par value per share ("Target
Preferred Stock"), none of which are issued and outstanding. Except as set forth
above, Target does not have any shares of its capital stock issued or
outstanding.
2.3 Authorization, Execution and Delivery. Target has the corporate power
to enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by its Board of
Directors and shareholders, and no other corporate proceedings on the part
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of Target are necessary to authorize this Agreement and the transactions
contemplated hereby. Target is not subject to or obligated under any charter,
by-law or contract provision or any note, mortgage, lease, agreement, bond,
indenture, instrument, license, franchise or permit, or subject to any order,
judgment, injunction, writ or decree, which would be breached or violated by the
execution or consummation of this Agreement. Other than in connection with or in
compliance with the provisions and requirements of the laws of the State of
Nevada, the 1933 Act, and the securities or blue sky laws of the various states,
no authorization, consent or approval of, or filing with, any public body or
authority is necessary for the completion by Target of the transactions
contemplated by this Agreement, except for such authorizations, consents,
approvals or filings, the failure to obtain or make which would not have a
material adverse effect on Target's business.
2.4 Financial Statements. Target's balance sheet as of April 30, 1999,
fairly presents the financial condition of Target as of said date and in
conformity with generally accepted accounting principles consistently applied.
2.5 Absence of Undisclosed Liabilities. Except as disclosed on Schedule
2.5, and to the extent reflected or reserved against in Target's balance sheet
as of April 30, 1999, Target did not have at that date any liabilities or
obligations (secured, unsecured, contingent or otherwise) of a nature
customarily reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles ("Liabilities").
2.6 Absence of Certain Changes. Except as disclosed on Schedule 2.6, there
has been no material adverse change in the business, properties or financial
condition of Target since April 30, 1999.
2.7 Litigation, Etc. Except as disclosed on Schedule 2.7, there is no
litigation, proceeding or investigation pending or, to the knowledge of Target,
threatened against Target which if successful might result in a material adverse
change in the business, properties or financial condition of Target or which
questions the validity or legality of this Agreement or of any action taken or
to be taken by Target in connection with this Agreement.
2.8 Contracts. Schedule 2.8 sets forth all material contracts to which
Target is a party. Except as disclosed on Schedule 2.8, none of the contracts
are in default.
2.9 Title. Target has good and marketable title to all property included in
the balance sheet of Target as of April 30, 1999, other than property disposed
of in the ordinary course of business after said date. Except as disclosed on
Schedule 2.9, the properties of Target as previously disclosed in writing to
Parent, including its rights to all patents, know how and intellectual property
relating to the products it distributes, are not subject to any mortgage,
encumbrance or lien of any kind except minor encumbrances which do not
materially interfere with the use of the property in the conduct of the business
of Target.
2.10 Tax Returns. No required federal, state and local tax returns are
delinquent.
2.11 No Violation. Consummation of the merger will not constitute or result
in a breach or default under any provision of any charter, bylaw, indenture,
mortgage, lease or agreement, or any order, judgment, decree, law or regulation
to which any property of Target is subject or by which is bound, except for
breaches or defaults which in the aggregate would not have a
4
materially adverse effect on Target's properties, business operations or
financial condition.
2.12 Books and Records. The corporate minute books, stock certificate
books, stock registers and other corporate records of Target are correct and
complete in all material respects, and the signatures appearing on all documents
contained therein are the true signatures of the persons purporting to have
signed the same.
2.13 Disclosure. Neither this Agreement nor any Schedule, Exhibit or
certificate delivered in accordance with the terms hereof, or any document or
statement in writing which, has been supplied by or on behalf of Target or by
any of Target's directors or officers, in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact, or omits
any statement of a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact or circumstance
known to Target which could be reasonably expected to materially and adversely
affect its business, prospects or financial condition or its assets, which has
not been set forth in this Agreement, the Schedules, Exhibits, certificates or
statements furnished in writing to Parent in connection with the transactions
contemplated by this Agreement.
2.14 Broker's or Finder's Fees. No broker, finder or similar intermediary
is entitled to fees in connection with the transactions contemplated by this
Agreement by virtue of any action or agreement of Target.
Section 3. Representations and Warranties of Parent and Sub
-----------------------------------------------------------
Parent and Sub represent and warrant that:
3.1 Corporate Organization. Parent and Sub, the sole subsidiary of Parent,
are corporations duly organized, validly existing and in good standing under the
laws of their respective jurisdictions of incorporation and each has all
requisite corporate power and authority to own, operate and lease its properties
and to conduct its business as it is now being conducted. Parent is duly
qualified or licensed as a foreign corporation in each other jurisdiction where
it owns or leases substantial properties, except where the failure to be so
qualified or licensed would not have a material adverse effect on the financial
condition, properties or businesses of Parent taken as a whole Parent and Sub
have each delivered to Target a true and complete copy of their Articles of
Incorporation and By-Laws.
3.2 Capitalization.
(a) Parent's authorized capital stock consists of: (i) 25,000,000 shares of
Common Stock, $.001 par value per share ("Parent Common Stock"), of which
7,533,214 shares are issued and outstanding, fully paid and nonassessable; and,
(ii) 10,000,000 shares of Preferred Stock, $.001 par value per share, ("Parent
Preferred Stock"), none of which are issued and outstanding. There are 1,050,000
options, warrants or rights outstanding to purchase shares of Parent Common
Stock from Parent.
(b) Except as set forth above, Parent does not have any shares of its
capital stock issued or outstanding.
(c) The authorized capital stock of Sub consists of 1,000,000 shares of
Common Stock, par value $.01 per share, of which 100,000 shares are
5
issued and outstanding, all of which are owned of record and beneficially by
Parent.
(d) To the best knowledge of Parent's management, Parent's outstanding
securities have been issued in compliance with all applicable federal and state
securities laws.
3.3 Authorization, Execution and Delivery. Parent and Sub each have the
corporate power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement by Parent and Sub and
the consummation of the transactions contemplated hereby have been duly
authorized by all requisite corporate action; no other corporate proceedings on
the part of Parent are necessary to authorize this Agreement and the
transactions contemplated hereby.
3.4 Financial Statements. Parent's balance sheet and statement of
operations, shareholder's equity and cash flow as of April 30, 1999, copies of
which have been provided to Target, fairly presents the financial condition of
Parent as of said date and in conformity with generally accepted accounting
principles consistently applied.
3. 5 Absence of Undisclosed. Liabilities. Except as disclosed on Schedule
3.5 and to the extent reflected or reserved against in Parent's balance sheet as
of April 30, 1999, Parent did not have at that date any liabilities or
obligations (secured, unsecured, contingent or otherwise) of a nature
customarily reflected in a corporate balance sheet prepared in accordance with
generally accepted accounting principles ("Liabilities").
3.6 Absence of Certain Changes. There has been no material adverse change
in the business, properties or financial condition of Parent since April 30,
1999.
3.7 Litigation There is no litigation, proceeding or investigation pending
or, to the knowledge of Parent, threatened against Parent which if successful
might result in a material adverse change in the business, properties or
financial condition of Parent or Sub or which questions the validity or legality
of this Agreement or of any action taken or to be taken by Parent or Sub in
connection with this Agreement.
3.8 Contracts. Parent is not a party to any material contract not in the
ordinary course of business which is to be performed in whole or in part at or
after the date of this Agreement.
3.9 Title. Parent has good and valid title to all property included in the
balance sheet of Parent as of April 30, 1999, other than property disposed of in
the ordinary course of business after said date. The properties of Parent are
not subject to any mortgage, encumbrance or lien of any kind.
3.10 Tax Returns. Parent has timely filed all required federal, state and
local tax returns and has no outstanding tax liabilities, including but not
limited to income, withholding, property and corporate franchise taxes.
3.11 No Violation. Consummation of the merger will not constitute or result
in a breach or default under any provision of any charter, bylaw, indenture,
mortgage, lease or agreement, or any order, judgment, decree, law or regulation
to which any property of Parent is subject or by which Parent is bound, except
for breaches or defaults which in the aggregate would not have a materially
adverse effect on Parent's properties, business operations or financial
condition.
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3.12 Books and Records. The corporate minute books, stock certificate
books, stock registers and other corporate records of Parent are correct and
complete in all material respects, and the signatures appearing on all documents
contained therein are the true signatures of the persons purporting to have
signed the same.
3.13 Continuity of Business Enterprise. Parent will continue at least one
significant historic business line of Target, or use at least a significant
portion of Target's historic business assets in a business, in each case within
the meaning of Treasury Reg. [section] 1.368-1(d)
3.14 Compliance with Law. There has been no default under any laws
applicable to Parent and Parent has not received notice from any governmental
entity regarding any alleged defaults under any laws. There has been no default
with respect to any court order applicable to Parent.
3.15 Disclosure. Neither this Agreement nor any Schedule, Exhibit or
certificate delivered in accordance with the terms hereof, or any document or
statement in writing which has been supplied by or on behalf of Parent or by any
of Parent's directors or officers in connection with the transactions
contemplated hereby, contains any untrue statement of a material fact, or omits
any statement of a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact or circumstance
known to Parent which could be reasonably expected to materially and adversely
affect its business, prospects or financial condition or its assets, which has
not been set forth in this Agreement, the Schedules, Exhibits, certificates or
statements furnished in writing to Target in connection with the transactions
contemplated by this Agreement.
3.16 Broker's or Finder's Fees. No broker, finder or similar intermediary
is entitled to fees in connection with the transactions contemplated by this
Agreement by virtue of any action or agreement of Parent.
Section 4. Conduct of Target Pending the Effective Date
-------------------------------------------------------
Target covenants that between the date of this Agreement and the Effective
Date:
4.1 Regular Course of Business. Except as otherwise consented to in writing
by Parent, prior to the Effective Date, Target will carry on its business in the
ordinary course only, and, without limiting the generality of the foregoing,
Target will use its best efforts to preserve its present business organization
intact, keep available the services of its present officers and employees, and
preserve its present relationships with persons having business dealings with it
including, but not limited to, the contracts as set forth in Schedule 2.8(b).
4.2 Restricted Activities and Transactions. Except as otherwise consented
to in writing by Parent, or contemplated by this Agreement, prior to the
Effective Date, Target will not:
(a) amend its certificate or articles of incorporation or bylaws;
(b) issue, sell or deliver, or agree to issue, sell or deliver, any shares
of any class of capital stock or any securities convertible into any such shares
or convertible into securities in turn so convertible, or any options, warrants
or other rights calling for the issuance, sale or delivery of
7
any such shares or convertible securities, declare or pay any dividend or make
any distribution on its capital stock in cash, stock or property, subdivide
shares of capital stock into a greater number of shares, or redeem, repurchase
or otherwise acquire any shares of capital stock;
(c) discharge or satisfy or pay any lien, encumbrance, debt or obligation
other than in the ordinary course of business;
(d) sell, transfer or otherwise dispose of any of its assets otherwise than
in the normal course of business;
(e) incur or assume or authorize or commit to any expenditure(s) in excess
of $25,000 in the aggregate other than in the ordinary course of business;
(f) assume or guarantee, or agree to assume or guarantee, any debt,
liability or other obligation of any person, firm or corporation; or
(g) acquire control of any other corporation, association, joint venture,
partnership, business trust or other business entity, or acquire control or
ownership of all or a substantial portion of the assets of any of the foregoing
or merge, consolidate or otherwise combine with any other corporation (except as
provided for in this Agreement), or enter into any agreement providing for any
of the foregoing.
4.3 Advice of Changes. Until the Closing Date, Target will promptly advise
Parent in writing after acquiring knowledge thereof, of (i) any event occurring
subsequent to the date of this Agreement which would render any representation
or warranty of Target contained in this Agreement, if made on or as of the date
of such event or the Effective Date, untrue or inaccurate in any material
respect; and, (ii) any material adverse change in Target's business.
4.4 Access to Records and Properties. Parent May, prior to the Closing
Date, through its employees, agents and representatives, make or cause to be
made a detailed review of the business and financial condition of Target, and
make or cause to be made such investigation as it deems necessary or advisable
of the properties, assets, businesses, books and records of Target. Target
agrees to furnish such assistance as Parent reasonably may request in conducting
such review and investigation and will provide, and will cause its independent
public accountants to provide, Parent and its employees, agents and
representatives full access to all books, records (including tax returns filed
or in preparation), personnel and premises of Target and the work papers and
other records of its independent public accountants and shall provide to Parent
such other information concerning the business of Target as Parent reasonably
may request Any such review described in this section shall be undertaken during
normal business hours following reasonable notice to Target.
Section 5. Conduct of Parent and Sub Pending the Effective Date
---------------------------------------------------------------
Parent and Sub covenant that between the date of this Agreement and the
Effective Date:
5.1 Regular Course of Business. Except as otherwise consented to in writing
by Target, prior to the Effective Date, Parent and Sub will carry on its
business in the ordinary course only, and, without limiting the generality of
the foregoing, Parent will use its best efforts to preserve its present business
organization intact, keep available the services of its present officers and
employees, and preserve its present relationships with persons having business
dealings with it.
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5.2 Restricted Activities and Transactions. Except as otherwise consented
to in writing by Target, or contemplated by this Agreement, prior to the
Effective Date, neither Parent nor Sub will:
(a) amend its certificate or articles of incorporation or bylaws;
(b) issue, sell or deliver, or agree to issue, sell or deliver, any shares
of any class of capital stock or any securities convertible into any such shares
or convertible into securities in turn so convertible, or any options, warrants
or other rights calling for the issuance, sale or delivery of any such shares or
convertible securities, declare or pay any: dividend or make any distribution on
its capital stock in cash, stock or property, subdivide shares of capital stock
into a greater number of shares, or redeem, repurchase or otherwise acquire any
shares of capital stock;
(c) discharge or satisfy or pay any lien, encumbrance, debt or obligation
other than in the ordinary course of business;
(d) sell, transfer or otherwise dispose of any of its assets otherwise than
in the normal course of business;
(e) incur or assume or authorize or commit to any expenditure(s) in excess
of $25,000 in the aggregate other than in the ordinary course of business;
(f) assume or guarantee, or agree to assume or guarantee, any debt,
liability or other obligation of any person, firm or corporation; or
(g) acquire control of any other corporation, association, joint venture,
partnership, business trust or other business entity, or acquire control or
ownership of all or a substantial portion of the assets of any of the foregoing
or merge, consolidate or otherwise combine with any other corporation (except as
provided for in this Agreement), or enter into any agreement providing for any
of the foregoing.
5.3 Advice of Changes. Parent will promptly advise Target in writing after
acquiring knowledge thereof, of (i) any event occurring subsequent to the date
of this Agreement which would render any representation or warranty of Parent
contained in this Agreement, if made on or as of the date of such event or at
the Effective Date, untrue or inaccurate in any material respect; and, (ii) any
material adverse change in the business of Parent and/or its Sub.
5.4 Access to Records and Properties. Target may, prior to the Closing
Date, through its employees, agents and representatives, make or cause to be
made a detailed review of the business and financial condition of Parent, and
make or cause to be made such investigation as it deems necessary or advisable
of the properties, assets, businesses, books and records of Parent. Parent
agrees to furnish such assistance as Target reasonably may request in conducting
such review and investigation and will provide, and will cause its independent
public accountants to provide, Target and its employees, agents and
representatives full access to all books, records (including tax returns filed
or in preparation), personnel and premises of Parent and the work papers and
other records of its independent public accountants and shall provide to Target
such other information concerning the business of Parent as Target reasonably
may request. Any such review described in this section shall be undertaken
during normal business hours following reasonable notice to Parent.
9
5.5 Guarantee of Sub Obligations. Parent shall cause Sub to perform in a
timely manner all its obligations, and to comply with all its agreements, in
this Agreement and in the Articles of Merger.
Section 6 MUTUAL COVENANTS
--------------------------
6.1 Confidentiality. Parent and Target will use their best efforts to keep
confidential any and all information furnished to one of them by the other or
such other's representatives or independent public accountants in connection
with the transactions contemplated by this Agreement, and the business and
financial review and investigation referred to in Section 4.4 and Section 5.4,
except to the extent any such information may be generally available to the
public, and Parent and Target have instructed their respective officers,
employees and other representatives having access to such information to comply
with the obligation of confidentiality. In the event of termination of this
Agreement, each of Parent and Target will promptly deliver to the other all
originals and copies of documents, work papers and other material containing
information concerning the other that was obtained from the other or its agents,
employees or representatives in connection with such transactions or business
and financial review and investigation, whether so obtained before or after the
execution hereof, will not use any information so obtained, will not disclose or
divulge such information to any other person and will keep confidential any
information so obtained; provided, however, that (after reasonable measures have
been taken to maintain confidentiality and after giving reasonable notice to the
other parties to this Agreement specifying the information involved and the
manner and extent of the proposed use of disclosure thereof) (i) any disclosure
of such information may be made by a party hereto to the extent required by
applicable law or regulation or judicial or regulatory process and (ii) such
information may be used by such party as evidence in or in connection with any
pending or threatened litigation relating to this Agreement or any transaction
contemplated hereby. The obligations arising under this Section 6.1 shall
survive any termination or abandonment of this Agreement.
6.2 Expenses. Whether or not the Merger is consummated, each party hereto
shall be responsible for its own legal, accounting and other fees; costs and
expenses regarding this Agreement and the transactions contemplated hereby.
Notwithstanding any other provision in this Agreement, in the event of any
dispute or controversy, in addition to any other remedies the prevailing party
may obtain in such dispute, the prevailing party in such dispute shall be
entitled to recover from the other party all of its reasonable legal fees and
out-of-pocket costs incurred by such party in enforcing or defending its rights
hereunder.
6.3 Further Assurances. Each party hereto agrees to execute and deliver
such instruments and take such other actions as any other party may reasonably
require in order to carry out the intent of this Agreement.
10
Section 7. Conditions Precedent to Obligation of Target
-------------------------------------------------------
Target's obligation to consummate this Merger shall be subject to
fulfillment on or before the Closing Date of each of the following conditions,
unless waived in writing by Target:
7.1 Parent and Sub Representations and Warranties. The representations and
warranties of Parent and Sub set forth in Section 3 hereof shall be true and
correct at the Closing Date as though made at and as of that date, except as
affected by transactions contemplated hereby.
7.2 Parent and Sub Covenants. Parent and Sub shall have performed all
covenants required by this Agreement to be performed by it on or before the
Closing Date.
7.3 Guarantee of Sub Obligations. Parent shall cause Sub to perform in a
timely manner all of its obligations, and to comply with all its agreements; in
this Agreement.
Section 8. Conditions Precedent to Obligation of Parent
-------------------------------------------------------
Parent's obligation to consummate this merger shall be subject to
fulfillment on or before the Closing Date of each of the following conditions,
unless waived in writing by Parent:
8.1 Target's Representations and Warranties. The representations and
warranties of Target set forth in Section 2 hereof shall be true and correct at
the Closing Date as though made at and as of that date, except as affected by
transactions contemplated hereby.
8.2 Target's Covenants. Target shall have performed all covenants required
by this Agreement to be performed by it on or before the Closing Date.
8.3 Funding. Target will have completed a private placement of its
securities which shall result in gross proceeds of not less than $500,000 no
later than August 30, 1999. The Private Placement will be made under the
provisions of Regulation D promulgated under the Securities Act of 1933, as
amended. The offering will be made only to "Accredited Investors" as that term
is defined in Regulation D.
Section 9. Designation of Agent for Service
-------------------------------------------
The Surviving Corporation hereby: (1) agrees that it may be served with
process in the State of Nevada in any proceeding for the enforcement of any
obligation of Target and in any proceeding for the enforcement of the rights of
a dissenting shareholder of Target; (2) irrevocably appoints the Secretary of
State of the State of Nevada as its agent to accept service or process in any
such proceedings; and (3) agrees that it will promptly pay to dissenting
shareholders, if any, of Target the amount, if any, to which they shall be
entitled pursuant to the laws of the State of Nevada.
11
Section 10 Stand-still Agreement and Break-off Fee
--------------------------------------------------
From and after the date of this Agreement and up to and including the
Closing Date both parties agree to conduct their respective businesses in the
ordinary course and agree that during such period each shall have the exclusive
right to negotiate with the other with respect to the Merger and during such
period each party agrees not to directly or through intermediaries solicit,
entertain or otherwise discuss with any person or entity any other offer and
neither Parent nor Target will issue or agree to issue, except as otherwise
disclosed in this Agreement, any additional securities without the consent of
the other party. Without the consent of the other party, neither party will,
except in the ordinary course of business, transfer assets or create liabilities
other than those contemplated herein. All reasonable expenses incurred in
connection with the completion of the transactions contemplated herein shall be
deemed to be in the ordinary course of business. Should any party be in
violation of this provision, it shall pay the other party the greater of: (i)
its expenses on an accountable basis, including time of its personnel and
representatives reasonably incurred in connection with the Transactions; or,
(ii) the sum of $25,000 as a Break-Off Fee within ten (10) days of written
notice from the other party and if any party fails to pay such fee, it shall be
liable to the other party for interest at the rate of eighteen percent (18%) per
annum together with reasonable attorneys fees for collection.
Section 11. Notice of Events
----------------------------
Each party shall promptly notify each other party of (a) any event,
condition or circumstance occurring from the date hereof through the Effective
Date that would constitute a violation or breach of this Agreement, or (b) any
event, occurrence, transaction or other item which would have been required to
have been disclosed on any Schedule, Exhibit or statement delivered hereunder,
had such event, occurrence, transaction or item existed on the date hereof,
other than items arising in the ordinary course of business which would not
render a change in any of the representations, warranties or other agreements of
said party.
Section 12. Termination
-----------------------
12.1 Circumstances of Termination. This Agreement may be terminated
(notwithstanding approval by the shareholders of Target hereof):
(a) By the mutual consent in writing of the Boards of Directors of Target
and Parent.
(b) By the Board of Directors of Target if any condition provided in
Section 7 hereof has not been satisfied or waived on or before the Closing Date.
(c) By the Board of Directors of Parent if any condition provided in
Section 8 hereof has not been satisfied or waived on or before the Closing Date.
(d) By the Board of Directors of either Parent or Target if the Effective
Date has not occurred by September 10, 1999.
12.2 Effect of Termination. In the event of a termination of this Agreement
pursuant to Section 12.1 (a) hereof, each party shall pay the costs and expenses
incurred by it in connection with this Agreement and no non-breaching party (or
any of its officers, directors and shareholders) shall be liable to any
12
other party for any costs, expenses, damage or loss of anticipated profits
hereunder.
In the event of a termination of this Agreement pursuant to Sections
12.1(b), (c) and (d) hereof, the party at fault shall be liable to the other
party for all reasonable costs and expenses, but shall not be liable for damage
or loss of anticipated profits hereunder.
Section 13. General Provisions
------------------------------
13.1 Further Assurances. At any time, and from time to time, after the
Effective Date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
13.2 Waiver. Any failure on the part of either party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
13.3 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any other agreement,
representation, or communication, whether oral or written between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
13.4 Headings. The section and subsection headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.5 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado, without regard to
conflict of laws. This Agreement shall be subject to the jurisdiction and venue
of the state and federal courts situated in Denver, Colorado.
13.6 Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this Agreement
without the written consent of the other party shall be void.
Section 14. Survival of Representations, Warranties and Agreements
------------------------------------------------------------------
All of the representations and warranties of the parties contained in this
Agreement shall survive for a period of two years after the Effective Date.
13
Section 15. Indemnity Agreements of Parent and Target
-----------------------------------------------------
Parent and Target each shall indemnify, defend, reimburse and hold harmless
the other from and against any and all Losses resulting from:
(a) Any inaccuracy in, or breach of, any representation and warranty or
nonfulfillment of any covenant on the part of Parent or Target, respectively;
contained in this Agreement.
(b) Any misrepresentation in or omission from or nonfulfillment of any
covenant on the part of Parent or Target, respectively, contained in any other
agreement, certificate or other instrument furnished or to be furnished to the
other party by that party pursuant to this Agreement.
Section 16. Other Agreements
----------------------------
16.1 Public Disclosure. None of the parties hereto shall issue any press
release or otherwise make any public statement with respect to the transactions
contemplated hereby not required by law except upon the written consent of the
other party hereto. Such approval shall not be unreasonably withheld.
16.2 Notices. All consents, waivers, notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by facsimile transmission or by overnight courier
to the parties at the following addresses or at such other addresses as shall be
specified by the parties by like notice:
(1) If to Parent or Sub to:
▇▇▇▇ ▇. ▇▇▇▇▇▇
New Millennium Media International
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
With a copy to:
A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
(2) If to Target to:
UNERGI, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
White & Case LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Telephone)
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
14
Any party may change the address to which notices, requests, demands and other
communications hereunder are to be sent to such party by giving the other
parties hereto written notice thereof in accordance with this Section 16.2.
16.3 Binding Effect. This Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective successors and assigns;
provided that this Agreement may not be assigned by any party without the
consent of the other parties.
16.4 Entire Agreement. This Agreement (including the Exhibits and Schedules
referred to herein) constitutes the entire agreement and supersedes all other
prior agreements and undertakings, both written and oral, among the parties, or
any of them, with respect to the subject matter hereof.
16.5 Schedules and Exhibits. The Schedules and Exhibits referred to in this
Agreement shall be construed as an integral part of this Agreement as if the
same had been set forth herein and shall be satisfactory in form and substance
to each party hereto.
16.6 Applicable Law and Jurisdiction. This Agreement shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Colorado without regard to conflict of law. This Agreement shall be
subject to the jurisdiction and venue of the state and federal courts situated
in Denver, Colorado.
16.7 No Benefit to Third Parties. No provision of this Agreement is
intended to confer any rights or remedies upon any person not a party of this
Agreement.
16.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original but all of which, when
taken together, shall constitute only one document. It shall not be necessary in
making proof of this Agreement to produce or account for more than one such
counterpart.
16.9 Acknowledgments.
(a) The parties represent and acknowledge that each has been represented
and advised by counsel in connection with this Agreement.
(b) The parties acknowledge that Target shall assume all liabilities of
Parent and Sub following the Closing and Effective Date of the Merger.
[SIGNATURES ON NEXT PAGE]
15
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
New Millennium Media International,
a Colorado corporation ("Parent")
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
New Millennium Media, Inc.,
a Colorado corporation ("Sub")
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
UNERGI, Inc.,
a Nevada corporation ("Target")
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
16
SCHEDULE 1.1(d)
---------------
OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
▇▇▇▇▇▇ ▇▇▇▇▇▇ Director Chairman of the Board
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Director Vice President-Corporate Finance
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Director President
▇▇▇▇ ▇▇▇▇▇▇ Director
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Controller
▇▇▇▇ ▇▇▇▇▇ Director Vice President-Marketing
SCHEDULE 1.3
------------
UNERGI'S SHAREHOLDER INFORMATION
Investment Management of America, Inc. 15,250,000 shares
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 3,250,000 shares
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇. #▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ 500,000 shares
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇. #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ 500,000 shares
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dual ▇▇▇▇▇▇ 500,000 shares
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Total 20,000,000 shares
Unassigned 1,000,000 preferred shares
SCHEDULE 2.2
------------
OBLIGATIONS TO ISSUE SHARES PURSUANT
TO SUBSCRIPTION AGREEMENTS
None
SCHEDULE 2.5
------------
LIST OF TARGET LIABILITIES
IMA $650,000
SCHEDULE 2.6
------------
CHANGES OF UNERGI
There have been no significant changes since the merger was agreed to.
SCHEDULE 2.7
------------
LITIGATION
There is no litigation pending with regards to UNERGI.
17
SCHEDULE 2 8
------------
CONTRACTS OF UNERGI
BETWEEN & FOR: SIGNED: NOTES:
Showcase Mall Joint Venture And 02/05/99 Assigned to UNERGI.
Dynamic Media Group. For the
Showcase Garage site in Las
Vegas. One face.
Champion Outdoor Media Services 02/08/99 Assigned to UNERGI.
And Dynamic Media Group. For
the I-595 billboard site in Ft
Lauderdale, FL. Two faces.
Champion Outdoor media Services 02/08/99 Assigned to UNERGI.
And Dynamic Media-Group. For
the I-95 billboard site in Ft.
Lauderdale, FL. Two faces.
Below are additional sites that are in the process of being secured but
contracts have not been signed. The rights to all of these potential contracts
are being assigned to UNERGI, INC.
Island Plaza Joint Venture in Las Vegas. A site in front of the Showcase facing
the corner of Las Vegas Blvd. (the strip) and Tropicana.
Las Vegas Airport property. NW corner of Tropicana and Paradise.
Maxim Hotel and Casino in Las Vegas. Side Wall.
Freemont Street in Las Vegas. End of the walkway.
Argosy Riverboat in Cincinnati. Inside the Atrium.
All-Star Sports Cafe in Manhattan. Side of the building.
NJ Turnpike heading towards the Holland tunnel. Billboard with Champion Outdoor.
Cleveland, Ohio at the Point with PlayHouse Square.
Reno Airport baggage area with Reno Airport.
Los Angeles billboard. Corner of Burbank and ▇▇▇▇▇▇▇▇▇ with owners.
SCHEDULE 2.9
------------
PROPERTIES OF UNERGI
None
SCHEDULE 3.5
LIST OF PARENT LIABILITIES
▇▇▇ ▇▇▇▇▇▇ $234,860
▇▇▇ ▇▇▇▇▇ $ 54,000
▇▇▇▇ ▇▇▇▇▇▇ $641,152
