Exhibit 1
AGREEMENT AND PLAN OF REORGANIZATION
As Amended April 8, 2000
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this
29th day of March 2000, by and among Monarch Media and Entertainment Group,
Inc., a Nevada corporation ("Monarch"); Intuitech Marketing Inc., incorporated
under the laws of the province of British Columbia ("Intuitech"); and the
persons listed in Exhibit A-1 hereof who are the owners of record of all the
issued and outstanding stock of Intuitech who execute and deliver the Agreement
("Intuitech Stockholders"), based on the following:
Recitals
Monarch wishes to acquire all the issued and outstanding stock of
Intuitech in exchange for stock of Monarch in a transaction intended to qualify
as a tax-free exchange pursuant to section 368(a)(1)(B) of the Internal Revenue
Code of 1986, as amended. The parties intend for this Agreement to represent the
terms and conditions of such tax-free reorganization, which Agreement the
parties hereby adopt.
Agreement
Based on the stated premises, which are incorporated herein by reference,
and for and in consideration of the mutual covenants and agreements hereinafter
set forth, the mutual benefits to the parties to be derived herefrom, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 1.05
hereof), the Intuitech Stockholders shall assign, transfer, and deliver to
Monarch, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or claims of any kind, nature, or description, all issued and
outstanding shares of common stock of Intuitech (the "Intuitech Shares") held by
Intuitech Stockholders which shares shall represent all issued and outstanding
shares of Intuitech common stock, and Monarch agrees to acquire such shares on
such date by issuing and delivering in exchange therefore an aggregate of
4,322,249 restricted shares of Monarch common stock, par value $0.001 per share,
(the "Monarch Common Stock"). Such shares of Monarch Common Stock shall be
issued on a Five (5) for One (1) basis, (for every 5 shares of Intuitech,
Intuitech shareholders will receive 1 share of Monarch) based on the number of
Intuitech Shares held and as set forth opposite the Intuitech Stockholder's
respective names in Exhibit A-1. All 4,322,249 shares of Monarch Common Stock to
be issued and delivered pursuant to this Agreement shall be appropriately
adjusted to take into account any stock split, stock dividend, reverse stock
split, recapitalization, or similar change in the Monarch Common Stock which may
occur between the date of the execution of this Agreement and the Closing Date.
1.02 Delivery of Certificates by Intuitech Stockholders. The transfer of
Intuitech Shares by the Intuitech Stockholders shall be effected by the delivery
to Monarch at the Closing (as set forth in Section 1.05 hereof) of certificates
representing the transferred shares endorsed in blank or accompanied by stock
powers executed in blank, with all signatures guaranteed and if applicable all
necessary transfer taxes and other revenue stamps affixed and acquired at the
Intuitech Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to the
transaction contemplated hereby, Monarch will own all the issued and outstanding
shares of Intuitech and Intuitech will be a wholly-owned subsidiary of Monarch
operation under the name Intuitech Marketing, Inc., or such other name as may be
acceptable to the Intuitech board of directors.
1.04 Further Assurances. At the Closing and from time to time thereafter,
the Intuitech Stockholders shall execute such additional instruments and take
such other action as Monarch may reasonably request, without undue cost to the
Intuitech Stockholders in order to more effectively sell, transfer, and assign
clear title and ownership in the Intuitech Shares to Monarch.
1.05 Closing and Parties. The Closing contemplated hereby shall be held at
a mutually agreed upon time and place on or before March 29, 2000, or on another
date to be agreed to in writing by the parties (the "Closing Date"). The
Agreement may be closed at any time following approval by a majority of the
shareholders of Monarch Common Stock as set forth in Section 4.02 hereof and the
Intuitech Stockholders as set forth in Section 5.02. The Closing may be
accomplished by wire, express mail, overnight courier, conference telephone call
or as otherwise agreed to by the respective parties or their duly authorized
representatives.
1.06 Closing Events
(a) Monarch Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article IV, Monarch shall deliver to Intuitech at
Closing all the following:
(i) A certificate of good standing from the secretary of State
of Nevada, issued as of a date within sixty days prior to the
Closing Date, certifying that Monarch is in good standing as a
corporation in the State of Nevada:
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of Monarch executing this
Agreement and any other document delivered pursuant hereto on behalf
of Monarch;
(iii) Copies of the resolution of Monarch board of directors
and shareholder minutes or consents authorizing the execution and
performance of this Agreement and the contemplated transactions,
certified by the secretary or an assistant secretary of Monarch as
of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly
executed by the chief executive officer of Monarch;
(v) The certificate contemplated by Section 4.03, dated the
Closing Date, signed by the chief executive officer of Monarch;
(vi) Certificates for 4,322,249 shares of Monarch Common Stock
in the names of the Intuitech Stockholders and in the amounts set
forth in Exhibit "A" and;
In addition to the above deliveries, Monarch shall take all steps and actions as
Intuitech and Intuitech Stockholders may reasonably request or as may otherwise
be reasonably necessary to consummate the transactions contemplated hereby.
(b) Intuitech Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, Intuitech and/or Intuitech
Stockholder's shall deliver to Monarch at Closing all the following:
(i) A certificate of good standing from the appropriate
governmental agency of British Columbia, issued as of a date within
five days prior to the Closing Date certifying that Intuitech is in
good standing as a corporation in the province of British Columbia;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of Intuitech executing
this Agreement and any other document delivered pursuant hereto on
behalf of Intuitech:
(iii) Copies of resolutions of the board of directors and of
the stockholders of Intuitech authorizing the execution and
performance of this Agreement and the contemplated transactions,
certified by the secretary or an assistant secretary of Intuitech as
of the Closing Dates;
(iv) The certificate contemplated by Section 5.03, executed by
the chief operating officer of Intuitech; and
(v) The certificate contemplated by Section 5.04, dated the
Closing Date, and signed by the chief operating officer of
Intuitech.
(vi) The shareholder certificates contemplated by section
1.02.
In addition to the above deliveries, Intuitech shall take all steps and actions
as Monarch may reasonably request or as may otherwise be reasonably necessary to
consummate the transactions contemplated hereby.
1.07. Termination
(a) This Agreement may be terminated by the board of directors of
either Monarch or Intuitech at any time prior to the Closing Date if:
(i) There shall be any actual or threatened action of
proceeding before any court or any governmental body which shall
seek to restrain, prohibit, or invalidate the transaction
contemplated by this Agreement and which, in the reasonable judgment
of such board of directors, made in good faith and based upon the
advice of its legal counsel, makes it inadvisable to proceed with
the transactions contemplated by this Agreement;
(ii) Any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions or in the reasonable judgment of
such board of directors, made in good faith and based on the advice
of counsel, there is substantial likelihood that any such approval
will not be obtained or will be obtained only on a condition or
conditions which would be unduly burdensome, making it inadvisable
to proceed with the exchange;
In the event of termination pursuant to this paragraph (a) of Section 1.07, no
obligation, right, or liability shall arise hereunder, and each party shall bear
all of the expenses incurred by it in contemplated hereby.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Monarch if (i)
shareholders of Monarch owning more than five percent (5%) of the issued
and outstanding shares of Monarch Common Stock perfect their dissenter's
rights with respect to the approval of this Agreement and the transactions
contemplated hereby, (ii) Intuitech shall fail to comply in any material
respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of Intuitech
contained herein shall be inaccurate in any material respect or (iii)
Monarch determines that there has been or is likely to be any material
adverse change in the financial or legal condition of Intuitech . In the
event of termination pursuant to this paragraph (b) of this Section 1.07,
no obligation, right, remedy, or liability shall arise hereunder. All
parties shall bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Intuitech if (i)
shareholders of Intuitech owning more than five percent (5%) of the issued
and outstanding shares of Intuitech Shares perfect their dissenter's
rights with respect to the approval of this Agreement and the transactions
contemplated herby, (ii) Monarch shall fail to comply in any material
respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of Monarch
contained herein shall be inaccurate in any material respect, or (iii)
Intuitech determines that there has been or is likely to be any adverse
change in the financial or legal condition of Monarch. In the event of
termination pursuant to this paragraph (c) of this Section 1.07, no
obligation, right, remedy, or liability shall arise hereunder. All parties
shall each bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
ARTICLE II
REPRESENTATION, COVENANTS, AND WARRANTIES OF MONARCH
As an inducement to, and to obtain the reliance of Intuitech and/or
Intuitech shareholders, Monarch represents and warrants as follows:
2.01 Organization. Monarch is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the state of Nevada and has the corporate power and is and will be duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, and there are no other jurisdictions in which it is
not so qualified in which the character and location of the assets owned by it
or the nature of the material business transacted by it requires qualification,
except where failure to do so would not have a material adverse effect on its
business, operation, properties, assets or condition. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not,
violate any provision of Monarch articles of incorporation or bylaws, or other
agreement to which it is a party or by which it is bound.
2.02 Approval of Agreement. Monarch has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, bylaws, and otherwise to execute and deliver this Agreement and
to consummate the transaction herein contemplated. The board of directors of
Monarch has authorized and approved the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby; subject to the approval
of the Monarch shareholders and compliance with state and federal corporate and
securities laws.
2.03 Capitalization. The authorized capitalization of Monarch consists of
50,000,000 shares, of common stock, $0.001 par value, of which 19,122,100 shares
are issued and outstanding. All issued and outstanding shares of Monarch are
legally issued, fully paid, and nonassessable and not issued in violation of the
preemptive or other right of any person. There are no dividends or other amounts
due or payable with respect to any of the shares of capital stock of Monarch.
2.04 Financial Statements.
(a) Included in the Schedules are the audited balance sheets of
Monarch as of December 31, 1999 and 1998, and the related statement of
operations, stockholder's equity (deficit), and cash flows for the fiscal
year ended December 31, 1999, and 1998, and from inception (October 7,
1996) through December 31, 1999, including the notes thereto, and the
accompanying report of Xxxxxxxx, Xxxxxxxx & Associates, Ltd; independent
certified public accountants. At or prior to the Closing Date, Monarch
shall deliver the un-audited balance sheet of Monarch as of March 31,
2000, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the three months ended March 31, 2000,
together with the notes thereto and representations by the principal
accounting and financial officer of Monarch to the effect that such
financial statements contain all adjustments (all of which are normal
recurring adjustments) necessary to present fairly the results of
operations and financial position for the periods and as of the dates
indicated and such financial statements shall not reflect any material
changes since the December 31, 1999, financial statements.
(b) The financial statements of Monarch delivered pursuant to
Section 2.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
as explained in the notes to such financial statements. The Monarch
financial statements present fairly, in all material respects, as of their
respective dates, the financial position of Monarch. Monarch did not have,
as of the date of any such financial statements, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected therein in
accordance with generally accepted accounting principles, and all assets
reflected therein presently fairly the assets of Monarch in accordance
with generally accepted accounting principles
(c) Monarch has filed or will file as the Closing Date all tax
returns required to be filed by it from inception to the Closing Date. All
such returns and reports are accurate and correct in all material respect.
Monarch has no material liabilities with respect to the payment of any
federal, state, county, local, or other taxes (including any deficiencies,
interest, or penalties) accrued for or applicable to the period ended on
the date of the most recent balance sheet of Monarch, except to the extent
reflected on such balance sheet and all such dates and years and periods
prior thereto and for which Monarch may at said date have been liable in
its own right or as transferee of the assets of, or as successor to, any
other corporation or entity, except for taxes accrued but not yet due and
payable, and to the best knowledge of Monarch, no deficiency assessment or
proposed adjustment of any such tax return is pending, proposed or
contemplated. To the best knowledge of Monarch, none of such income tax
returns has been examined or is
currently being examined by the Internal Revenue Service and no deficiency
assessment or proposed adjustment of any such return is pending, proposed
or contemplated. Monarch has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that relate
solely to methods of accounting, depreciation, or amortization) that would
have a material adverse affect on Monarch, its financial condition, its
business as presently conducted or proposed to be conducted, or any of its
respective properties or material assets. There are no outstanding
agreements or waivers extending the statutory period of limitation
applicable to any tax return of Monarch.
2.05 Outstanding Warrants and Options. Monarch has no existing Warrants,
options, calls, or commitments of any nature relating to the authorized and
un-issued Monarch Common Stock.
2.06 Information. The information concerning Monarch set forth in this
Agreement is complete and accurate in all material respects and does not contain
any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading. Monarch shall cause the schedules delivered by
it pursuant hereto and the instruments delivered to Intuitech hereunder to be
updated after the date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or the schedules hereto, since the date of the most recent Monarch
balance sheet described in Section 2.04 and included in the information referred
to in Section 2.06.
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition
of Monarch or (ii) any damage, destruction, or loss to Monarch (whether or
not covered by insurance) materially and adversely affecting the business,
operations, properties, assets, or conditions of Monarch;
(b) Monarch has not (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment
of dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of
Monarch; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any other material
transactions; (vi) made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it to
any of its officers or directors or any of its employees whose monthly
compensation exceeds $1,000; or (viii) made any increase in any
profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or with its officers, directors, or employees;
(c) Monarch has not (i) granted or agreed to grant any options,
warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Monarch balance sheet
and current liabilities incurred since that date in the ordinary course of
business; (iv) sold or transferred, or agreed to sell or transfer, any of
its material assets, properties, or rights (except assets, properties, or
rights
not unused or un-useful in its business which, in the aggregate have a
value of less than $5,000 or canceled, or agreed to cancel, any debts or
claims (except debts and claims which in the aggregate are of a value of
less than $5,000; (v) made or permitted any amendment or termination of
any contract, agreement, or license to which it is a party if such
amendment or termination is material, considering the business of Monarch;
or (vi) issued, delivered, or agreed to issue or deliver any stock, bonds,
or other corporate securities including debentures (whether authorized and
un-issued or held as treasury stock); and
(d) To the best knowledge of Monarch, it has not become subject to
any law or regulation which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operations, properties, assets, or condition of Monarch.
2.08 Litigation and Proceeding. There are no material actions, suits, or
administrative or other proceedings pending or, to the knowledge of Monarch,
threatened by or against Monarch or adversely affecting Monarch or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind.
Monarch does not have any knowledge of any default on its part with respect to
any default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or governmental
agency or instrumentality.
2.09 Compliance With Laws and Regulations. Monarch has complied with all
applicable statutes and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance (i) could not
materially and adversely affect the business, operations, properties, assets, or
conditions of Monarch or (ii) could not result in the occurrence of any material
liability for Monarch. To the best knowledge of Monarch, the consummation of
this transaction will comply with all applicable statures and regulations,
subject to the preparation and filing of any forms required by state and federal
securities laws.
2.10 Material Contract Defaults. Monarch is not in default in any material
respect under the terms of any outstanding contract, agreement, lease, or other
commitment which is material to the business, operations, properties, assets, or
condition of Monarch, and there is no event of default in any material respect
under any such contract, agreement, lease, or other commitment in respect of
which Monarch has not taken adequate steps to prevent such a default from
occurring.
2.11 No Conflict With Other Instrument. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Monarch is a party or to
which any of its properties or operations are subject.
2.12 Subsidiary. Monarch does not own, beneficially or of record, any
equity securities in any other entity.
2.13 Monarch Schedules. Monarch has delivered to Intuitech the following
schedules, which are collectively referred to as the "Monarch Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, all certified by a duly authorized officer of
Monarch as complete, true and accurate:
(a) A schedule including copies of the articles of incorporation and
bylaws of Monarch in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the board
of directors of Monarch approving this Agreement and the transactions
herein contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of Monarch since the most recent Monarch balance sheet, required
to be provided pursuant to Section 2.04 hereof,
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the Monarch
Schedules by Sections 2.01 through 2.12.
Monarch shall cause the Monarch Schedules and the instruments delivered to
Intuitech hereunder to be updated after the date hereof up to and including a
specified date not more than three business days prior to the Closing Date. Such
updated Monarch Schedules, certified in the same manner as the original Monarch
Schedules, shall be delivered prior to and as a condition precedent to the
obligation of the Intuitech to close.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF INTUITECH
As an inducement to, and to obtain the reliance of, Monarch, Intuitech
represents and warrants as follows:
3.01 Organization. Intuitech is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under the
laws of the province of British Columbia and has the corporate power and is and
will be duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by its requires qualification, except where failure to do so would
not have a material adverse effect on its business, operations, properties,
assets or conditions of Intuitech . The execution and delivery of this Agreement
does not, and the consummation of the transaction contemplated by this Agreement
in accordance with the terms hereof will not, violate any provision of
Intuitech's memorandum or articles of incorporation, or other material agreement
to which it is a party or by which it is bound.
3.02 Approval of Agreement. Intuitech has full power, authority, and legal
right and has taken, or will take, all action required by law, its articles of
incorporation, memorandum, or otherwise to execute and deliver this Agreement
and to consummate the transactions herein contemplated. The board of directors
of Intuitech have authorized and approved the execution, delivery, and
performance of this Agreement and the transactions contemplated hereby; subject
to the approval of the Intuitech Stockholders and compliance with provincial and
federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of Intuitech consists
of 100,000,000 shares. Consisting of 50,000,000 shares of common stock, no par
value, of which as of the date hereof 21,611,246 shares are issued and
outstanding, and 25,000,000 Class A Preferred and 25,000,000 Class B Preferred,
none of the Class A or B preferred are outstanding. All issued and outstanding
shares of Intuitech are legally issued, fully paid, and non-assessable and not
issued in violation of the preemptive or other right of any person. There are no
dividends or other amounts due or payable with respect to any of the shares of
capital stock of Intuitech.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited balance sheet of
Intuitech as of April 30, 1999 and the related statements of operations,
cash flows, and stockholders' equity, for the past five years (April 30,
1994 through April 30, 1999), and the accompanying reports of Xxxxxxxx
Botteselle & Co., independent certified general accountants. At or prior
to the Closing Date, Intuitech shall deliver the un-audited balance sheet
of Intuitech as of March 31, 2000, and the related statements of
operations, stockholders' equity (deficit), as cash flows for the three
months ended March 31, 2000, together with the notes thereto and
representations by the chief operation officer of Intuitech to the effect
that such financial statements contain all adjustments (all of which are
normal recurring adjustments) necessary to present fairly the results of
operations and financial position for the periods and as the dates
indicated.
(b) The audited financial statements delivered pursuant to Section
3.04(a) have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods
involved. The financial statements of Intuitech present fairly, as of
their respective dates, the financial position of Intuitech. Intuitech did
not have, as of the date of any such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in any
financial statements or the notes thereto prepared in accordance with
generally accepted accounting principles, and all assets reflected therein
present fairly the assets of Intuitech, in accordance with generally
accepted accounting principles. The statements of revenue and expenses and
cash flows present fairly the financial position and result of operations
of Intuitech as of their respective dates and for the respective periods
covered thereby.
(c) Intuitech has filed or will file as the Closing Date all tax
returns required to be filed by it from inception to the Closing Date. All
such returns and reports are accurate and correct in all material respect.
Intuitech has no material liabilities with respect to the payment of any
federal, provincial, county, local, or other taxes (including and
deficiencies, interest, or penalties) accrued for or applicable to the
period ended on the date of the most recent balance sheet of Intuitech,
except to the extent reflected on such balance sheet and all such dates
and years and periods prior thereto and for which Intuitech may at said
date have been liable in its own right or as transferee of the assets of,
or as successor to, any other corporation or entity, except for taxes
accrued but not yet due and payable, and to the best knowledge of
Intuitech , no deficiency assessment or proposed adjustment of any such
tax return is pending, proposed or contemplated. To the best knowledge of
Intuitech, none of such income tax returns has been examined or is
currently being examined by the Internal Revenue Service and no deficiency
assessment or proposed adjustment of any such return is pending, proposed
or contemplated. Intuitech has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that relate
solely to methods of accounting, depreciation, or amortization) that would
have a material adverse affect on Intuitech, its financial condition, its
business as presently conducted or proposed to be conducted, or any of its
respective properties or material
assets. There are no outstanding agreements or waivers extending the
statutory period of limitation applicable to any tax return of Intuitech.
3.05 Outstanding Warrants and Options. Intuitech has no existing warrants,
options, calls, or commitments relating to the authorized and un-issued
Intuitech Common Stock.
3.06 Information. The information concerning Intuitech set forth in this
Agreement and in the schedules delivered by Intuitech pursuant hereto is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact of omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. Intuitech shall cause the schedules delivered by Intuitech
pursuant hereto to Monarch hereunder to be updated after the date hereof up to
and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth in this
Agreement or The schedules hereto, since the date of the most recent Intuitech
balance sheet described in Section 3.04 and included in the information referred
to in Section 3.06.
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition
of Intuitech or (ii) any damage, destruction, or loss to Intuitech
materially and adversely affecting the business, operations, properties,
assets, or conditions of Intuitech;
(b) Intuitech has not (i) amended its articles of incorporation or
memorandum; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary and material considering the business of
Intuitech; (iv) made any material change in its method of accounting; (v)
entered into any other material transactions other than those contemplated
by this Agreement; (vi) made any material accrual or material arrangement
for or payment of bonuses to an officer or employee; or (vii) made any
material increase in any profit-sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment,
or arrangement made to, for, or with their officers, directors, or
employees;
(c) Intuitech has not (i) granted or agreed to grant any option,
warrants, or other rights for its stocks, bonds, or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to
borrow any funds or incurred, or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Intuitech balance
sheet and current liabilities incurred since that date in the ordinary
course of business; (iv) sold or transferred, or agreed to sell or
transfer, any of its material assets, properties, or rights, or agreed to
cancel, any material debts or claims; (v) made or permitted any amendment
or termination of any contract, agreement, or license to which it is a
party if such amendment or termination is material, considering the
business of Intuitech ; or (vi) issued, delivered, or agreed to issue or
deliver any stock, bonds, or other corporate securities including
debentures (whether authorized and un-issued or held as treasury stock):
and
(d) To the best knowledge of Intuitech, it has not become subject to
any law or regulation, which materially and adversely affects, or in the
future would be reasonably expected to adversely affect, the business,
operation, properties, assets, or conditions of Intuitech.
3.08 Title and Related Matters. Except as provided herein or disclosed in
the most recent Intuitech balance sheet and the notes therein, Intuitech has
good and marketable title to all of its properties, inventory, interests in
properties, technology, whether patented or un-patented, including, but not
limited to the technology and software source code for an archive publisher
product and a master license to use this technology from Helikon Technologies
Inc., and assets, which are reflected in the most recent Intuitech balance sheet
or acquired after that date (except properties, interests in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all mortgages, liens, pledges, charges, or
encumbrances, except (i) statutory liens or claims not yet delinquent; and (ii)
such imperfections of title and casements as do not, and will not, materially
detract from, or interfere with, the present or proposed use of the properties
subject thereto or affected thereby or otherwise materially impair present
business operations on such properties. To the best knowledge of Intuitech, its
technology does not infringe on the copyright, patent, trade, secret, know-how,
or other proprietary right of any other person or entity and comprises all such
rights necessary to permit the operation of the business of Intuitech as now
being conducted or as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed in Schedule
3.09, there are no material actions, suits, or proceedings pending or, to the
knowledge of Intuitech, threatened by or against Intuitech or adversely
affecting Intuitech , at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind. Intuitech does not have any knowledge of any default on
its part with respect to any judgment, order, writ, injunction, decree, award,
rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.10 Material Contract Defaults. Intuitech is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets, or condition of Intuitech , and there is no event of default or other
event which, with notice or lapse of time or both, would constitute a default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which Intuitech has not taken adequate steps to prevent
such a default from occurring.
3.11 No Conflict With Other Instruments. The execution of this Agreement
and the consummation of the transactions contemplated by this Agreement will not
result in the breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust, or other
material contract, agreement, or instrument to which Intuitech is a party or to
which any of its properties or operations are subject.
3.12 Governmental Authorization. Intuitech has all licenses, franchises,
permits, and other governmental authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date of this Agreement. Except for compliance with federal and state securities
and corporation laws, as hereinafter provided, no authorization, approval,
consent, or order of, or registration, declaration, or filing with, any court or
other governmental body is required in connection with the execution and
delivery by Intuitech of this Agreement and the consummation by Intuitech of the
transactions contemplated hereby.
3.13 Compliance With Laws and Regulations. Intuitech has complied with all
applicable statutes and regulations of any federal, provincial, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or conditions of Intuitech or except to the extent that noncompliance
would not result in the occurrence of any material liability for Intuitech . To
the best of knowledge of
Intuitech, the consummation of this transaction will comply with all applicable
statutes and regulations, subject to the preparation and filing of any forms
required by state and federal security laws.
3.14 Subsidiary. Intuitech does not own, beneficially or of record, any
equity Securities in any other entity.
3.15 Intuitech Schedules. Intuitech has delivered to Monarch the following
schedules, which are collectively referred to as the "Intuitech Schedules" and
which consist of the following separate schedules dated as of the date of
execution of this Agreement, all certified by the chief executive officer of
Intuitech as complete, true, and accurate:
(a) A schedule including copies of the memorandum and articles of
Incorporation of Intuitech and all amendments thereto effect as of the
date of this Agreement;
(b) A schedule containing copies of resolution adopted by the board
of directors of Intuitech approving this Agreement and the transactions
herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of Intuitech since the most recent Intuitech balance sheet,
required to be provided pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the
Intuitech Schedules by Sections 3.01 through 3.14.
Intuitech shall cause the Intuitech Schedules and the instruments delivered to
Monarch hereunder to be updated after the date hereof up to end including a
specified date not more than three business days prior to the Closing Date. Such
updated Intuitech Schedules, certified in the same manner as the original
Intuitech Schedules, shall be delivered prior to and as a condition precedent to
the obligation of Monarch to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF INTUITECH
The obligations of Intuitech under this Agreement are subject to the
satisfaction of Intuitech, at or before the Closing Date, of the following
conditions;
4.01 Shareholder Approval. Monarch shall call and hold a meeting of its
shareholders, or obtain the written consent of a majority of its shareholders,
to approve the transactions contemplated by this agreement including the
acquisition of Intuitech through the issuance of Monarch Common Stock of all of
the issued and outstanding Intuitech Shares, and the change of name of Monarch
to "Intuitech Marketing, Inc." or such other derivation thereof as may be agreed
to by the board of directors of Intuitech .
4.02 Accuracy of Representation. The representations and warranties made
by Monarch in this Agreement were true when made and shall be true at the
closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and Monarch shall have performed or complied with
all covenants and conditions required by this Agreement to be performed or
complied with by Monarch prior to or at the Closing. Intuitech shall be
furnished with certificates, signed by duly authorized officers of Monarch and
dated the Closing Date, to the foregoing effect.
4.03 Officer's Certificates. Intuitech shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
executive officer of Monarch to the effect that to such officers best knowledge
no litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Monarch threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and Monarch own documents and information, the certificate
shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by Monarch board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Monarch by its duly authorized officers pursuant to,
and in compliance with, authority granted by the board of directors of
Monarch pursuant to a unanimous consent;
(b) There has been no material adverse changes in Monarch up to and
including the date of the certificate;
(c) All conditions required by this Agreement has been met,
satisfied, or performed by Monarch;
(d) All authorizations, consents, approvals, registrations, and/or
filings with any governmental body, agency, or court required in
connection with the execution and delivery of the documents by Monarch
have been obtained and are in full force and effect or, if not required to
have been obtained, will be in full force and effect by such time as may
be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending or
threatened against Monarch, wherein an unfavorable decision, ruling, or
finding could have an adverse effect on the financial condition of
Monarch, the operation of Monarch, or the acquisition and reorganization
contemplated herein, or any agreement or instrument by which Monarch is
bound or in any way contests the existence of Monarch.
4.04 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business, or operations of Monarch, nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of Monarch.
4.05 Good Standings. Intuitech shall have received a certificate of good
standing from the secretary of state of Nevada, dated as of the date within five
days prior to the Closing Date, certifying that Monarch is in good standing as a
corporation in the State of Nevada.
4.06 Other Items. Intuitech shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
Intuitech may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF MONARCH
The obligations of Monarch under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions;
5.01 Shareholder Approval. Monarch shall call and hold a meeting of its
shareholders, or obtain through a majority written consent of its shareholders,
whereby the shareholders of Monarch authorize and approve this Agreement and the
transactions contemplated hereby.
5.02 Intuitech Shareholders. Holders of all of the issued and outstanding
Intuitech Shares shall agree to this Agreement and the exchange of shares
contemplated by this Agreement.
5.03 Accuracy of Representations. The representations and warranties made
by Intuitech and the Intuitech Stockholders in this Agreement were true when
made and shall be true at the Closing Date with the same force and affect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and Intuitech shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Intuitech prior to or at the
Closing. Monarch shall be furnished with a certificate, signed by a duly
authorized officer of Intuitech and dated the Closing Date, to the foregoing
effect.
5.04 Officer's Certificates. Monarch shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized chief
operating officer of Intuitech to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of Intuitech ,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement. Furthermore,
these certificates shall represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by Intuitech's board of
directors and shareholders and has been duly executed and delivered in the
name and on behalf of Intuitech by its duly authorized officers pursuant
to, and in compliance with, authority granted by the board of directors of
Intuitech pursuant to a unanimous consent of its board of directors and a
majority vote of its stockholders:
(b) Except as provided or permitted herein, there have been no
material adverse changes in Intuitech up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body agency, or court required in connection
with the execution and delivery of the documents by Intuitech have been
obtained and are in full force and effect or, if not required to have been
obtained will be in full force and effect by such time as may be required:
and
(d) Except as otherwise disclosed in Schedule 3.08, there is no
material action, suit, proceeding, inquiry, or investigation at law or in
equity by any public board or body pending or threatened against
Intuitech, wherein an unfavorable decision, ruling, or finding would have
an adverse affect on the financial condition of Intuitech , the operation
of Intuitech , or the acquisition and reorganization contemplated herein,
or any material agreement or instrument by which Intuitech is bound or
would in any way contest the existence of Intuitech .
5.05 No Material Adverse Change. Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business or operations of Intuitech , nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of Intuitech.
5.06 Good Standings. Monarch shall have received a certificate of good
standing from the appropriate authority, dated as of a date within five days
prior to the Closing Date, certifying that Intuitech is in good standing as a
corporation in the province of British Columbia.
5.07 Other Items. Monarch shall have received such further documents,
certificates, or instruments relating to the transactions contemplated hereby as
Monarch may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of Monarch and Intuitech
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the respective schedules to be delivered by
Monarch and Intuitech pursuant hereto or as permitted or contemplated by
this Agreement, Monarch and Intuitech will each:
(i) Carry on its business in substantially the same manner as
it has heretofore;
(ii) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve its
business organization intact, to retain its key employees, and to
maintain its relationships with its material suppliers and
customers;
(v) Duly and timely file for all taxable periods ending on or
prior to the Closing Date all federal, state, county, and local tax
returns required to be filed by or on behalf of such entity or for
which such entity may be held responsible and shall pay, or cause to
pay, all taxes required to be shown as due and payable on such
returns, as well as all installments of tax due and payable during
the period commencing on the date of this Agreement and ending on
the Closing Date; and
(vi) Fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state
laws and all rules, regulations, and orders imposed by federal or
state governmental authorities.
(b) From and after the date of this Agreement and except as provided
herein until the Closing Date, Monarch and Intuitech will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument of any of the types described in such party's
schedules, except that a party may enter into or amend any contract,
agreement, or other instrument in the ordinary course of business;
and
Enter into any agreement for the sale of Intuitech or Monarch
securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date, Intuitech
and Monarch will afford to the other party's officers and authorized
representatives full access to the properties, books, and records of the other
party in order that each party may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of Intuitech or Monarch
and will furnish the other party with such additional financial and other
information as to the business and properties of Intuitech or Monarch as each
party shall from time to time reasonably request.
6.03 Indemnification by Intuitech. Intuitech will indemnify and hold
harmless Monarch and its directors and officers, and each person, if any, who
controls Monarch within the meaning of the Securities Act, from and against any
and all losses, claims, damages, expenses, liabilities, or actions to which any
of them may become subject under applicable law (including the Securities Act
and the Securities Exchange Act) and will reimburse them for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any claims or actions, whether or not resulting in liability, insofar
as such losses, claims, damages, expenses, liabilities, or actions arise out of
or are based upon any untrue statement or alleged untrue statement of material
fact contained in any application or statement filed with a governmental body or
arising out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon and in conformity with
information furnished in writing by Intuitech expressly for use therein. The
indemnity agreement contained in this Section 6.03 shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
Monarch and shall survive the consummation of the transactions contemplated by
this Agreement for a period of six months.
6.04 Indemnification by Monarch. Monarch will indemnify and hold harmless
Intuitech, the Intuitech Stockholders, Intuitech 's directors and officers, and
each person, if any, who controls Intuitech within the meaning of the Securities
Act, from and against any and all losses, claims, damages, expenses,
liabilities, or actions to which any of them may become subject under applicable
law (including the Securities Act and the Securities Exchange Act) and will
reimburse them for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any claims or actions, whether or not
resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities, or actions arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any application or
statement filed with a governmental body or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made in
reliance upon and in conformity with information furnished in writing by Monarch
expressly for use therein. The indemnity agreement contained in this Section
6.04 shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of Intuitech and shall survive the
consummation of the transactions contemplated by this Agreement for a period of
six months.
6.05 The Acquisition of Monarch Common Stock. Monarch and Intuitech
understand and agree that the consummation of this Agreement including the
issuance of the Monarch Common Stock to Intuitech in exchange for the Intuitech
shares as contemplated hereby, constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Monarch and Intuitech
agree that such transactions shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such statutes that
depend, among other items, on the circumstances under which such securities are
acquired.
(a) In order to provide documentation for reliance upon exemption
from the registration and prospectus delivery requirements for such
transactions, the signing of this Agreement and the delivery of
appropriate separate representations shall constitute the parties
acceptance of, and concurrence in, the following representations and
warranties:
(i) The Intuitech Stockholders acknowledge that neither the
SEC nor the securities commission of any state or other federal
agency has made any determination as to the merits of acquiring
Monarch Common Stock, and that this transaction involves certain
risks.
(ii) The Intuitech Stockholders have received and read the
Agreement and understand the risks related to the consummation of
the transactions herein contemplated.
(iii) Intuitech Stockholders have such knowledge and
experience in business and financial matters that they are capable
of evaluating each business.
(iv) Intuitech Stockholders have been provided with copies of
all materials and information requested by them or their
representatives, including any information requested to verify any
information furnished (to the extent such information is available
or can be obtained without unreasonable effort or expense), and the
parties have been provided the opportunity for direct communication
regarding the transactions contemplated hereby.
(v) All information which the Intuitech Stockholders have
provided to Monarch or their representatives concerning their
suitability and intent to hold shares in Monarch following the
transactions contemplated hereby is complete, accurate, and correct.
(vi) The Intuitech Stockholders have not offered or sold any
securities of Monarch or interest in this Agreement and have no
present intention of dividing the Monarch Common Stock or Intuitech
Shares to be received or the rights under this Agreement with others
or of reselling or otherwise disposing of any portion of such stock
or rights, either currently or after the passage of a fixed or
determinable period of time or on the occurrence or nonoccurrence of
any predetermined event or circumstance.
(vii) The Intuitech Stockholders understand that the Monarch
Common Stock has not been registered, but is being acquired by
reason of a specific exemption under the Securities Act as well as
under certain state statutes for transactions not involving any
public offering and that any disposition of the subject Monarch
Common Stock may, under certain circumstances, be inconsistent with
this exemption and may make Intuitech or Monarch an "underwriter",
within the meaning of the Securities Act. It
is understood that the definition of "underwriter" focuses upon the
concept of "distribution" and that any subsequent disposition of the
subject Monarch Common Stock can only be effected in transactions,
which are not considered distributions. Generally, the term
"distribution" is considered synonymous with "public offering" or
any other offer or sale involving general solicitation or general
advertising. Under present law, in determining whether a
distribution occurs when securities are sold into the public market,
under certain circumstances one must consider the availability of
public information regarding the issuer, a holding period for the
securities sufficient to assure that the persons desiring to sell
the securities without registration first bear the economic risk of
their investment, and a limitation on the number of securities which
the stock holder is permitted to sell and on the manner of sale,
thereby reducing the potential impact of the sale on the trading
markets. These criteria are set forth specifically in rule 144
promulgated under the Securities Act, and, after two years after the
date the Monarch Common Stock or Intuitech Shares are fully paid
for, as calculated in accordance with rule 144(d), sales of
securities in reliance upon rule 144 can only be made in limited
amounts in accordance with the terms and conditions of that rule.
After two years from the date the securities are fully paid for, as
calculated in accordance with rule 144(d), they can generally be
sold without mooting those conditions, provided the holder is not
(and has not been for the preceding three months) an affiliate of
the issuer.
(viii) The Intuitech Stockholders acknowledge that the shares
of Monarch Common Stock, must be held and may not be sold,
transferred, or otherwise disposed of for value unless they are
subsequently registered under the Securities Act or an Exemption
from such registration is available. Monarch is not under any
obligation to register the Monarch Common Stock under the Securities
Act. If rule 144 is available after two years and prior to three
years following the date the shares are fully paid for, only routine
sales of such Monarch Common Stock in limited amounts can be made in
reliance upon rule 144 in accordance with the terms and conditions
of that rule. Monarch is not under any obligation to make rule 144
available except as set forth in this Agreement and in the event
rule 144 is not available, compliance with Regulation A or some
other disclosure exemption may be required before Intuitech
Stockholders can sell, transfer, or otherwise dispose of such
Monarch Common Stock without registration under the Securities Act.
Subject to compliance with federal and state securities laws,
Monarch registrar and transfer agent will maintain a stop transfer
order against the registration and transfer of the Monarch Common
Stock held by Intuitech Stockholders and the certificates
representing the Monarch Common Stock will bear a legend in
substantially the following form so restricting the sale of such
securities:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND XXXX "REGISTRICTED SECURITIES" WITHIN
THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.
THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT
BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER
THE SECURITIES ACT.
(ix) Subject to compliance with federal and state securities
laws, Monarch may refuse to register further transfers or resale's
of the Monarch Common Stock in the absence of compliance with rule
144 unless the Intuitech Stockholders furnish Monarch with an
opinion of counsel reasonably acceptable to Monarch stating that the
transfer is proper. Further, unless such opinion states that the
shares of Monarch Common Stock are free of any restrictions under
the Securities Act, Monarch may refuse to transfer the securities to
any transferee who does not furnish in writing to Monarch the same
representations and agree to the same conditions with respect to
such Monarch Common Stock as set forth herein. Monarch may also
refuse to transfer the Monarch Common Stock if any circumstances are
present reasonably indicating that the transferee's representations
are not accurate.
(b) In connection with the transaction contemplated by this
Agreement, Intuitech and Monarch shall each file with the assistance of
the other and their respective legal counsel, such notices, applications,
reports, or other instruments as may be deemed by them to be necessary or
appropriate in an effort to document reliance on such exemptions, and the
appropriate regulatory authority in the states where the Intuitech
Stockholders reside unless an exemption requiring no filing is available
in such jurisdictions, all to the extent and in the manner as may be
deemed by such parties to be appropriate.
(c) In order to more fully document reliance on the exemptions as
provided herein, Intuitech, the Intuitech Stockholders, and Monarch shall
execute and deliver to the other, at or prior to the Closing, such further
letters of representation, acknowledgment, suitability, or the like as
Monarch or Intuitech and their respective counsel may reasonably request
in connection with reliance on exemptions from registration under such
securities laws.
(d) The Intuitech Stockholders acknowledge that the basis for
relying on exemptions from registration or qualification are factual,
depending on the conduct of the various parties, and that no legal opinion
or other assurance will be required or given to the effect that the
transactions contemplated hereby are in fact exempt from registration or
qualification.
6.06 Monarch Liabilities. Immediately prior to the Closing Date, Monarch
shall have no material assets and no liabilities in excess of $1,000 and all
expenses related to this Agreement or otherwise shall have been paid.
6.07 Sales of Securities Under Rule 144, If Applicable.
(a) Monarch will use its best efforts to at all times satisfy the
current public information requirements of rule 144 promulgated under the
Securities Act so that its shareholders can sell restricted securities
that have been held for two years or more or such other restricted period
as required by rule 144 as it is from time to time amended.
(b) Upon being informed in writing by any person holding restricted
stock of Monarch as of the date of this Agreement that such person intends
to sell any shares under rule 144 promulgated under the Securities Act
(including any rule adopted in substitution or replacement thereof),
Monarch will certify in writing to such person that it is compliance with
rule 144 current public information requirement to enable such person to
sell such person's restricted stock under rule 144, as may be applicable
under the circumstances.
(c) If any certificate representing any such restricted stock is
presented to Monarch transfer agent for registration or transfer in
connection with any sales theretofore made under rule 144, provided such
certificate is duly endorsed for transfer by the appropriate person(s) or
accompanied by a separate stock power duly executed by the appropriate
person(s) in each case with reasonable assurances that such endorsements
are genuine and effective, and is accompanied by an opinion of counsel
satisfactory to Monarch and its counsel that such transfer has complied
with the requirements of rule 144, as the case may be, Monarch will
promptly instruct its transfer agent to register such transfer and to
issue one or more new certificates representing such shares to the
transferee and, if appropriate under the provisions of rule 144, as the
case may be, free of any stop transfer order or restrictive legend. The
provisions of this Section 6.07 shall survive the Closing and the
consummation of the transactions contemplated by this Agreement for a
period of two years.
(d) The shareholders of Monarch as of the date of this Agreement, as
well as those receiving Monarch Common Stock pursuant to this Agreement,
are intended third-party beneficiaries of this Section 6.07.
6.08 New Board of Directors and Officers. Upon closing of the transactions
contemplated by this Agreement, the current board of directors and officers of
Monarch shall resign and in their place nominees of Intuitech shall be
appointed, subject to the approval of the suitability and qualifications of such
nominees.
6.09 Monarch Capitalization For a period of eighteen months from the
Closing Date, Monarch will not engage in any reverse split of its issued and
outstanding Common Stock without the prior written approval of the holders of a
majority in interest of the issued and outstanding Monarch Common Stock on the
date of this Agreement.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. Except as provided herein, Monarch and Intuitech agree that
there were no finders or brokers involved in bringing the parties together or
who were instrumental in the negotiation, execution, or consummation of this
Agreement. Further, Monarch and Intuitech each agree to indemnify the other
against any claim by any third person for any commission, brokerage, or finder's
fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between such
party and such third person, whether express or implied, from the actions of
such party.
The covenants set forth in this section shall survive the Closing Date and the
consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation or
warranty is being made by any party to any other regarding the treatment of this
transaction for federal or state income taxation. Each party has relied
exclusively on its own legal, accounting, and other tax adviser regarding the
treatment of this transaction for federal and state income taxes and on
representation, warranty, or assurance from any other party or such other
party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced and
constructed under and in accordance with the laws of the State of Nevada.
7.04 Notices. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier addressed as follows:
If to Monarch Media and Entertainment Group, Inc.:
Xxx Xxxx, President
XX Xxx 000
Xxxxxxxxxx, XX 00000
If to Intuitech Marketing, Inc.:
Xxx Xxxxxxxx, President
000-000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X0X0
Fax: (000) 000-0000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices, hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered or sent by facsimile or
telecopy transmission or other electronic communication, or one day after the
date so sent by overnight courier.
7.05 Attorney's Fees. In the event that any party institutes any action or
suit to enforce this Agreement or to secure relief from any default hereunder or
breach hereof, the breaching party or parties shall reimburse the non-breaching
party or parties from all costs, including reasonable attorneys fees, incurred
in connection therewith and in enforcing or collecting any judgment rendered
therein.
7.06 Schedules / Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by Monarch
or Intuitech such reference is to information specifically set forth in such
schedules and clearly marked to identify the section of this Agreement to which
the information relates. Whenever any representation is made to the "knowledge"
of any party, it shall be deemed to be a representation that no officer or
director of such party, after reasonable investigation, has any knowledge of
such matters.
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged into
this Agreement. The Agreement alone fully and completely expresses the agreement
of the parties relating to the subject matter hereof. There are no other courses
of dealing, understandings, agreements, representations, or warranties, written
or oral, except as set forth herein.
7.08 Survival Termination. The representations, warranties, and covenants
of the respective parties shall survive the Closing Date and the consummation of
the transactions herein contemplated for a period of six months from the Closing
Date, unless otherwise provided herein.
7.09 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
7.10 Amendment or Waiver. Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and such remedies may be enforced concurrently, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
be amended by a writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing signed
by the party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first above written.
MONARCH MEDIA AND ENTERTAINMENT GROUP, INC.
A Nevada Corporation
By: /s/ Xxx Xxxx
------------------------------------------
Xxx Xxxx, President
INTUITECH MARKETING, INC.
A British Columbia Corporation
By: /s/ Xxx Xxxxxxxx
----------------------------
Xxx Xxxxxxxx, President
STATE OF ___________)
COUNTY OF ___________)
On this ____ day of __________, 2000, personally appeared before me Xxx
Xxxx, whose identity is personally known to me and who by me duly sworn, did say
that he is the President of Monarch, Inc. and that said document was signed by
him on behalf of said corporation by authority of its bylaws, and said Xxx Xxxx
acknowledged to me that said corporation executed the same.
-----------------------------
NOTARY PUBLIC
STATE OF __________)
COUNTY OF __________)
On this ____ day of ________, 2000, personally appeared before me Xxx
Xxxxxxxx, whose identity is personally known to me and who by me duly sworn, did
say that he is the President of Intuitech, Inc., and that said document was
signed by him of behalf of said corporation by authority of its bylaws, and said
Xxx Xxxxxxxx acknowledged to me that said corporation executed the same.
-----------------------------
NOTARY PUBLIC
