1
MERGER AGREEMENT
THIS MERGER AGREEMENT (the "Agreement") is made and entered into by and
between International Environmental Management, Inc., a Nevada corporation (the
"Corporation") and Xxxxxx Xxxxxxx, as sole shareholder of Broward Recycling,
Inc. (the "Subscriber"), the Corporation and the Subscriber being collectively
referred to as the "Parties".
PREAMBLE:
WHEREAS, the Subscriber owns all of the authorized issued and outstanding
Common Stock of Broward Recycling, Inc., a corporation organized under the laws
of Florida (the "Subsidiary"); and
WHEREAS, the Subscriber desires to acquire 1,500,000 shares of the
Corporation's 25,000,000 authorized common stock, par value $.001 (the
"Stock"); and
WHEREAS, the Subscriber desires to acquire the Stock, in consideration for
their conveyance of all of their common stock in the Subsidiary, which stock
constitutes all of the Subsidiary's authorized, issued and outstanding
securities (the "Subsidiary Stock"), provided that such conveyance meets the tax
free exchange requirements of Section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises, as well as the mutual
covenants hereinafter set forth, the Parties, intending to be legally bound,
hereby agree as follows:
WITNESSETH:
ARTICLE ONE
MERGER PROVISIONS
1.1 MERGER
Subject to the hereinafter described conditions, the Corporation hereby
agrees to exchange 1,500,000 shares of common stock, $.001 par value (the
"Stock"), with the Subscriber for all of the common stock (667 authorized,
issued and outstanding) of the Subsidiary.
1
2
1.2 CLOSING
The exchange of the common stock of the "Corporation" for the Subsidiary
Stock has taken place at the offices of Global Asset Management Group, Inc., a
related party to the Corporation prior to July 1, 1999:
(a) The Subscriber has tendered to the "Corporation" certificates
representing all of the Subsidiary's authorized, issued and outstanding common
stock, duly executed and in proper form for transfer to the Corporation,
together with such executed consents, powers of attorney, stock powers and other
items as shall be required to convey such stock to the Corporation, in
compliance with all applicable laws; and
(b) The Corporation shall tender to the Subscriber 100% of the total
issued and outstanding shares of the Stock and such other items as shall be
required to convey such stock to the Subscriber.
1.3 EXEMPTION FROM REGISTRATION
(a) The Subscriber hereby represents, warrants, covenants and
acknowledges that:
(1) The Stock is being issued without registration under the
provisions of Section 5 of the Securities Act of 1933, as amended (the "Act")
pursuant to exemptions provided pursuant to Sections 3(b), 4(2) or 4(6) thereof;
(2) All of the Stock will bear legends restricting its transfer to
United States residents, or its transfer, sale, conveyance or hypothecation
within the jurisdictional boundaries of the United States, unless such Stock is
either registered under the provisions of Section 5 of the Act and under
applicable State securities laws, or an opinion of legal counsel, in form and
substance satisfactory to legal counsel to the Corporation is provided
certifying that such registration is not required as a result of applicable
exemptions therefrom;
(3) The Subscriber is acquiring the Stock for investment purposes
only, and not with a view to further sale or distribution; and
(4) The Subscriber and its advisors have examined all of the
Corporation's books and records and have fully and completely questioned the
Corporation's officers and directors as to all matters involving the
Corporation.
2
3
(b) The Corporation hereby represents, warrants, covenants and
acknowledges that:
(1) The Subsidiary Stock is being transferred without registration
under the provisions of Section 5 of the Act pursuant to exemptions provided
pursuant to Section 3(b), 4(2) or 4(6) thereof;
(2) All of the Subsidiary Stock will bear legends restricting its
transfer to United States residents, or its transfer, sale, conveyance or
hypothecation within the jurisdictional boundaries of the United States, unless
such Subsidiary Stock is either registered under the provisions of Section 5 of
the Act and under applicable State securities laws, or an opinion of legal
counsel is provided certifying that such registration is not required as a
result of applicable exemptions therefrom;
(3) The Corporation shall not transfer any of the Subsidiary Stock
except in compliance with all applicable laws;
(4) The Corporation is acquiring the Subsidiary Stock for investment
purposes only and not with a view to further sale or distribution.
ARTICLE TWO
REPRESENTATIONS AND WARRANTIES
2.1 THE CORPORATION
The Corporation hereby represents and warrants to the Subscriber, as a
material inducement to their entry into this Agreement, that:
(a) The Corporation is, as of the date of this Agreement, a validly
existing Corporation, organized pursuant to the laws of the State of Nevada,
with all legal and corporate authority and power to conduct its business and
to own its properties and that it possesses all necessary permits and licenses
required in connection with the conduct of its business;
(b) The conduct of the Corporation's business is in full compliance with
all applicable Federal, state and local governmental statutes, rules,
regulations, ordinances and decrees;
(c) Pursuant to its Articles of Incorporation the Corporation is
authorized to issue 25,000,000 Shares of Common Stock, $.001 par value. There
are no other authorized or
3
4
outstanding securities of any class or of any kind or character or, except as
reflected in this Agreement, there are no outstanding subscriptions, options,
warrants or other agreements or commitments obligating the Corporation to issue
or sell any additional shares of the Corporation's capital stock or any options
or rights with respect thereto, or any securities convertible into any shares of
Stock of any class;
(d) Upon issuance of the Stock, the Subscriber will become the owner of
1,500,000 of the Corporation's authorized, issued and outstanding Common Stock;
(e) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this Agreement
will not result in a breach of any of the terms or provisions of, or constitute
a default under, the Articles of Incorporation or By-laws of the Corporation;
any indenture, other agreement or instrument to which the Corporation is a party
or by which it or its assets are bound; or any applicable regulation, judgment,
order or decree of any governmental instrumentality or court, domestic or
foreign, having jurisdiction over the Corporation, its securities or its
properties;
(f) The Corporation is not a party to any written or oral agreement which
grants an option or right of first refusal or other arrangement to acquire any
of the Stock or to any agreement that affects the voting rights of any of the
Stock, nor has the Corporation made any commitment of any kind relating to the
issuance of shares of any of its Stock, whether by subscription, right of
conversion, option or otherwise;
(g) The Corporation is not a party to any agreement or understanding for
the sale or exchange of inventory or services for consideration other than cash
or at a discount in excess of normal discount for quantity or cash payment;
(h) The Corporation has filed with the appropriate governmental agencies
all tax returns and tax reports required to be filed; all Federal, state and
local income, franchise, sales, use, occupation or other taxes due have been
fully paid or adequately reserved for; and the Corporation is not a party to any
action or proceeding by any governmental authority for assessment or collection
of taxes, nor has any claim for assessments been asserted against the
Corporation;
(i) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which are known to the Corporation, which might
result in a material adverse change in the future financial condition or
operations of the Corporation other than as previously disclosed to the
Subscriber or reflected in the Corporation's financial statements provided to
the Subscriber;
4
5
(j) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not (except for the consents described in
Article Four hereof) require the consent, authority or approval of any other
person or entity except such as have been obtained;
(k) No transactions have been entered into either by or on behalf of the
Corporation, other than in the ordinary course of business nor have any acts
been performed (including within the definition of the term performed the
failure to perform any required acts) which would adversely affect the good will
of the Corporation;
(l) The entering into of this Agreement and the performance thereof has
been duly and validly authorized by all required Corporate action and does not
require any corporate consents other than such as have been unconditionally
obtained;
(m) The Corporation does not have any subsidiaries.
(n) The Minute Books of the Corporation contain true, correct and complete
copies of the minutes of all meetings of its organizers, shareholders and Board
of Directors from the date of its organization to the present.
2.2 THE SUBSCRIBER
The Subscriber hereby represents and warrants to the Corporation, as a
material inducement to the Corporation's entry into this Agreement, that, to the
best of its knowledge after reasonable inquiry:
(a) The Subsidiary owns or leases all of the assets described in the
schedule of assets, a copy of which is annexed hereto and made a part hereof as
exhibit A, and as of the date of this Agreement no events have occurred nor have
any facts been discovered which materially alters the Subsidiary's assets;
(b) The Subsidiary is, as of the date of this Agreement, a validly
existing corporation, organized pursuant to the laws of the Florida and has all
corporate authority and power to conduct its business and to own its properties
and possesses all necessary permits and licenses required in connection with the
conduct of its business;
(c) The conduct of the Subsidiary's business is in full compliance with
all applicable governmental statutes, rules, regulations, ordinances and
decrees;
5
6
(d) The Subsidiary has 1,000 shares of Common Stock authorized, of which
667 shares are currently issued and outstanding, there being no other
outstanding securities of any class or of any kind or character of the
Subsidiary and, except as reflected in this Agreement, there being no
outstanding subscriptions, options, warrants or other agreements or commitments
obligating the Subsidiary, to issue or sell any additional shares of the
Subsidiary's Stock or any options or rights with respect thereto, or any
securities convertible into any shares of Stock of any class;
(e) The execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and compliance with the terms of this
Agreement will not result in a breach of any of the terms or provisions of, or
constitute a default under, the Articles of Incorporation or Bylaws of the
Subsidiary; any indenture, other agreement or instrument to which the
Subsidiary is a party or by which it or its assets are bound; or any applicable
regulation, judgment, order or decree of any governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Subsidiary, its
securities or its properties;
(f) The Subsidiary is not a party to any written or oral agreement which
grants an option or right of first refusal or other arrangement to acquire any
of its securities or to any agreement that affects the voting rights of any of
its securities, nor has the Corporation made any commitment of any kind relating
to the issuance of shares of any of its securities, whether by subscription,
right of conversion, option or otherwise, except for the currently outstanding
Redeemable Warrants;
(g) The Subsidiary is not a party to any agreement or understanding for
the sale or exchange of inventory or services for consideration other than cash
or at a discount in excess of normal discount for quantity or cash payment;
(h) The Subsidiary has filed with the appropriate governmental agencies
all tax returns and tax reports required to be filed; all income, franchise,
sales, use, occupation or other taxes due have been fully paid or adequately
reserved for; and the Subsidiary is not a party to any action or proceeding by
any governmental authority for assessment or collection of taxes, nor has any
claim for assessments been asserted against the Subsidiary;
(i) There are presently no contingent liabilities, factual circumstances,
threatened or pending litigation, contractually assumed obligations or
unasserted possible claims which might result in a material adverse change in
the future financial condition or operations of the Subsidiary;
6
7
(j) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby do not require the consent, authority or
approval of any other person or entity except such as have been obtained;
(k) No transactions have been entered into either by or on behalf of
the Subsidiary, other than in the ordinary course of business nor have any acts
been performed (including within the definition of the term performed the
failure to perform any required acts) which would adversely affect the goodwill
of the Subsidiary;
(l) The entering into of this Agreement and the performance thereof has
been duly and validly authorized by all required corporate action and does not
require any consents other than such as have been unconditionally obtained.
ARTICLE THREE
SPECIAL CONDITIONS
3.1 EACH PARTY
The obligations of each Party to this Agreement are subject to the
condition precedent that the other Party's representations and warranties
contained in this Agreement shall be true, correct and complete on and as of the
date of Closing with the same effect as though such representations and
warranties were made on and as of such date.
ARTICLE FOUR
MISCELLANEOUS
4.1 AMENDMENT
No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is evinced by a written instrument, subscribed by
the Party against which such modification, waiver, amendment, discharge or
change is sought.
4.2 NOTICE
All notices, demands or other communications given hereunder shall be in
writing and shall be deemed to have been duly given on the first business day
after mailing by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
7
8
TO THE CORPORATION: International Environmental Management, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
TO THE SUBSCRIBER: Broward Recycling, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
or such other address or to such other person as any Party shall designate to
the other for such purpose in the manner hereinafter set forth.
4.3 MERGER
This instrument, together with the instruments referred to herein,
contains all of the understandings and agreements of the Parties with respect to
the subject matter discussed herein. All prior agreements whether written or
oral are merged herein and shall be of no force or effect.
4.4 SURVIVAL
The several representations, warranties and covenants of the Parties
contained herein shall survive the execution hereof and shall be effective
regardless of any investigation that may have been made or may be made by or on
behalf of any Party.
4.5 SEVERABILITY
If any provision or any portion of any provision of this Agreement, other
than one of the conditions precedent, or the application of such provision or
any portion thereof to any person or circumstance shall be held invalid or
unenforceable, the remaining portions of such provision and the remaining
provisions of this Agreement or the application of such provision or portion of
such provision as is held invalid or unenforceable to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby.
4.6 GOVERNING LAW AND VENUE
This Agreement shall be construed in accordance with the laws of the State
of Florida and any proceeding arising between the Parties in any matter
pertaining or related to this Agreement shall, to the extent permitted by law,
be held in the City of Hollywood, Florida.
8
9
4.7 INDEMNIFICATION
Each Party hereby irrevocably agrees to indemnify and hold the other
Parties harmless from any and all liabilities and damages (including legal or
other expenses incidental thereto), contingent, current, or inchoate to which
they or any one of them may become subject as a direct, indirect or incidental
consequence of any action by the indemnifying Party or as a consequence of the
failure of the indemnifying Party to act, whether pursuant to requirements of
this Agreement or otherwise. In the event it becomes necessary to enforce this
indemnity through an attorney, with or without litigation, the successful Party
shall be entitled to recover from the indemnifying Party, all costs incurred
including reasonable attorneys' fees throughout any negotiations, trials or
appeals, whether or not any suit is instituted.
4.8 LITIGATION
In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing Party
shall be entitled to recover its costs and expenses, including reasonable
attorneys' fees up to and including all negotiations, trails and appeals,
whether or not litigation is initiated.
4.9 BENEFIT OF AGREEMENT
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees.
4.10 CAPTIONS
The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or the
intent of any provisions hereof.
4.11 NUMBER AND GENDER
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
4.12 FURTHER ASSURANCES
9
10
The Parties agree to do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
4.13 STATUS
Nothing in this Agreement shall be construed or shall constitute a
partnership, joint venture, employer-employee relationship, lessor-lessee
relationship, or principal-agent relationship.
4.14 COUNTERPARTS
This Agreement may be executed in any number of counterparts. All
executed counterparts shall constitute one Agreement notwithstanding that all
signatories are not signatories to the original or the same counterpart.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
effective as of the 1st day of July, 1999.
Signed, sealed and delivered
In Our Presence: CORPORATION:
INTERNATIONAL ENVIRONMENTAL
MANAGEMENT, INC.
------------------------
By: /s/ XXXXXX XXXXXXX, PRESIDENT
-----------------------------
Xxxxxx Xxxxxxx, President
------------------------
SUBSCRIBER:
------------------------
/s/ XXXXXX XXXXXXX
-------------------------------
Xxxxxx Xxxxxxx, Sole Shareholder
------------------------ of Broward Recycling, Inc.
10
