EXHIBIT 2.1
_______________________
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), dated as of
the 31st day of December, 1996, by and among Media Entertainment, Inc.,
a Nevada corporation ("MEI"), Winter Entertainment, Inc., a Delaware
corporation ("WEI"), and Xxxxx X. Xxxxxx, the sole shareholder of WEI (the
"Shareholder"), is made with reference to the following:.
A. MEI is a Nevada corporation organized on November 1, 1996. MEI has
authorized 50,000,000 shares of Common Stock, $.0001 par value per share,
of which 2,160,000 shares are outstanding.
X. XXX is a Delaware corporation organized under the laws of the State of
Delware on December 28, 1995.
C. The respective Boards of Directors of MEI and WEI have deemed it
advisable and in the best interests of MEI and WEI for WEI to be acquired
by MEI pursuant to the terms and conditions set forth in this Agreement.
X. XXX, WEI and the Shareholder propose to enter into this Agreement
which provides, among other things, that all of the outstanding shares of
WEI be acquired by MEI, in exchange for shares of MEI, and additional
items, all as more fully described in this Agreement.
E. The parties desire the transaction to qualify as a tax-free
reorganization
under Section 368 (a)(1)(B) of the Internal Revenue Code of 1986 and the
shares of MEI to be issued to the Shareholder be exempt from registration
under the Securities Act of 1933, as amended (the "Act"), by virtue of the
provisions of Section 4(2) of the Act.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
THE ACQUISITION
1.01 At the Closing, a total of 1,500 shares of common stock of WEI, which
represents all of the outstanding shares of capital stock of WEI, shall be
acquired by MEI in exchange for 227,336 shares of MEI, which shall be
issued to the Shareholder, and shall represent approximately 3.79% of the
issued and outstanding shares of MEI following this reorganization, with
effect having been given to the reorganization transaction referred to in
paragraph 3.13 of this Agreement.
1.02 At the Closing, the Shareholder will deliver a certificate or
certificates
for the outstanding shares of WEI, duly endorsed so as to make MEI the sole
holder thereof, free and clear of all claims and encumbrances and MEI shall
issue its shares to the Shareholder.
ARTICLE 2
THE CLOSING
2.01 The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place in the offices of MEI, 0000 Xxxxxxxx Xxxx
Xxxx, Xxxxx Xxxxx, Xxxxxxxxx 00000 at 4:00 p.m., on January 24, 1997, or
at such other place or date and time as may be agreed to in writing by the
parties hereto.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF XXX
XXX hereby represents and warrants to WEI and Shareholder as follows:
3.01 MEI shall deliver to WEI and Shareholder within three (3) days before
Closing, each of the following:
(a) Financial Statement. The unaudited balance sheet of MEI as of
December 31, 1996. (Schedule A)
(b) Leases and Contracts. A complete and accurate list describing all
material terms of each lease (whether of real or personal property) and each
contract, promissory note, mortgage, license, franchise or other written
agreement to which MEI is a party. (Schedule B)
(c) Charter and Bylaws. Complete and accurate copies of the Articles of
Incorporation and Bylaws of MEI, together with all amendments thereto to
the date hereof. (Schedule C)
(d) Shareholders. A complete list of all persons or entities holding capital
stock of MEI or any rights to subscribe for, acquire or receive shares of the
capital stock of MEI (whether warrants, calls, options or conversion rights),
including copies of all stock option plans whether qualified or non-qualified,
and other similar agreements. (Schedule D)
(e) Officers and Directors. A list of officers and directors of MEI.
(Schedule
E)
(f) Litigation. A complete and accurate list (in all material respects) of
all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including, without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights
violations) pending or, to the knowledge of MEI, threatened, which may
materially and adversely affect MEI. (Schedule F)
(g) Jurisdictions Where Qualified. A list of all jurisdictions wherein MEI
is
qualified to do business and is in good standing. (Schedule G)
(h) Subsidiaries. A complete list of all subsidiaries of MEI. (Schedule H)
The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar entities
in
which MEI has an interest, direct or indirect.
(i) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of MEI in effect on the
date hereof or to become effective after the date thereof, together with
copies
of any determination letters issued by the Internal Revenue Service with
respect thereto. (Schedule I)
3.02 Organization, Standing and Power. MEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
3.03 Qualification. MEI is duly qualified and is licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
its business operations. Such jurisdictions, which are the only jurisdictions
in which MEI is duly qualified and licensed as a foreign corporation, are
shown in Schedule J.
3.04 Capitalization of MEI. The authorized capital stock of MEI consists of
50,000,000 shares of Common Stock, $.0001 par value per share, of which
the only shares issued and outstanding are 2,160,000, which shares were duly
authorized, validly issued and fully paid and non-assessable. There are no
preemptive rights with respect to the MEI Common Stock.
3.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of MEI. This Agreement constitutes the valid and binding
obligation of MEI enforceable against it in accordance with its terms, subject
to the principles of equity applicable to the availability of the remedy of
specific performance. This Agreement has been duly executed by MEI and
the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement shall not result in the breach of
any provisions of the Articles of Incorporation or of the Bylaws or of any
other agreement, court order or instrument to which MEI is a party or by
which it is bound.
3.06 Absence of Undisclosed Liabilities. MEI has no material liabilities of
any nature, whether fixed, absolute, contingent or accrued, which are not
reflected in the financial statements set forth in Schedule A nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
3.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business of MEI.
3.08 Options, Warrants, etc. Except as otherwise described in Schedule C,
there are no outstanding options, warrants, calls, commitments or agreements
of any character to which MEI or its shareholder is a party or by which MEI
or its shareholder are bound, or is a party, calling for the issuance of
shares
of capital stock of MEI or any securities representing the right to purchase
or
otherwise receive any such capital stock of MEI.
3.09 Agreements in Force and Effect. All material contracts, agreements,
plans, promissory notes, mortgages, leases, policies, licenses, franchises or
similar instruments to which MEI is a party are valid and in full force and
effect on the date hereof, and MEI has not breached any material provision
of, and is not in default in any material respect under the terms of, any such
contract, agreement, plan, promissory note, mortgage, lease, policy, license,
franchise or similar instrument which breach or default would have a material
adverse effect upon the business, operations or financial condition of MEI.
3.10 Legal Proceedings, etc. There are no civil, criminal, administrative,
arbitration or other such proceedings or investigations pending or, to the
knowledge of either MEI or the shareholder thereof, threatened, in which,
individually or in the aggregate, an adverse determination would materially
and adversely affect the assets, properties, business or income of MEI. MEI
has substantially complied with, and is not in default in any material respect
under, any laws, ordinances, requirements, regulations or orders applicable
to its businesses.
3.11 Governmental Regulation. To the knowledge of MEI, MEI is not in
violation of or in default with respect to any applicable law or any
applicable
rule, regulation, order, writ or decree of any court or any governmental
commission, board, bureau, agency or instrumentality, or delinquent with
respect to any report required to be filed with any governmental commission,
board, bureau, agency or instrumentality which violation or default could
have a material adverse effect upon the business, operations or financial
conditions of MEI.
3.12 Accuracy of Information. No representation or warranty by MEI
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to WEI pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of material fact or omits or will omit to state any material
fact necessary in order to make the statements contained herein or therein not
misleading.
3.13 Subsidiaries. Contemporaneous with the consummation of this
Agreement, MEI is to acquire all of the outstanding capital stock of Missouri
Cable TV Corp., a Louisiana corporation, pursuant to an Agreement and Plan
of Reorganization. After the consummation of such reorganization and the
reorganization contemplated herein, the Company will have two subsidiaries.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF XXX
XXX hereby represents and warrants to MEI as follows:
4.01 WEI shall deliver to MEI within three (3) days before Closing, each of
the following for WEI:
(a) Financial Statements. Unudited financial statements of WEI, including
balance sheets and profit and loss statements, for the year ended December
31, 1996. (Schedule AA)
(b) Property. An accurate list and description of all property, real or
personal, owned by WEI of a value equal to or greater than $500. (Schedule
BB)
(c) Liens and Liabilities. A complete and accurate list of all material
liens,
encumbrances, easements, security interests or similar interests in or on any
of the assets listed on Schedule BB. (Schedule CC)
(d) Leases and Contracts. A complete and accurate list describing all
material terms of material leases (whether of real or personal property) and
any material contract, promissory note, mortgage, license, franchise or other
written agreement to which WEI is a party. (Schedule DD)
(e) Loan Agreements. Complete and accurate copies of all loan agreements
and other documents with respect to obligations of WEI for the repayment of
borrowed money. (Schedule EE)
(f) Consents Required. A complete list of all agreements wherein consent
to the transaction herein contemplated is required to avoid a default
thereunder; or where notice of such transaction is required at or subsequent
to Closing, or where consent to an acquisition, consolidation or sale of all
or
substantially all of the assets is required to avoid a default thereunder.
(Schedule FF)
(g) Charter and Bylaws. Complete and accurate copies of the Certificate and
Articles of Incorporation and Bylaws of WEI, together with all amendments
thereto to the date hereof. (Schedule GG)
(h) Shareholders. A confirmation of the person or persons or entities
holding
capital stock of WEI or any rights to subscribe for, acquire, or receive
shares
of the capital stock of WEI (whether warrants, calls, options or conversion
rights), including copies of all stock option plans whether qualified or
nonqualified, and other similar agreements. (Schedule HH)
(i) Officers and Directors. A list of officers and directors of WEI.
(Schedule
II)
(j) Salary Schedule. A complete and accurate list (in all material respects)
of the names and the current salary rate of each employee of WEI. (Schedule
JJ)
(k) Litigation. A complete and accurate list (in all material respects) of
all
material civil, criminal, administrative, arbitration or other such
proceedings
or investigations (including, without limitation, unfair labor practice
matters,
labor organization activities, environmental matters and civil rights matters)
pending or, to the knowledge of WEI, threatened, which may materially and
adversely affect WEI. (Schedule KK)
(l) Tax Returns. Accurate copies of all tax returns for WEI since inception.
(Schedule LL)
(m) Banks. A true and complete list (in all material respects), as of the
date
of this Agreement, showing (1) the name of each bank in which WEI has an
account or safe deposit box, and (2) the names and addresses of all
signatories, other than officers and directors. (Schedule MM)
(n) Jurisdictions Where Qualified. A list of all jurisdictions wherein WEI
is
qualified to do business and is in good standing. (Schedule NN)
(o) Subsidiaries. A complete list of all subsidiaries of WEI. (Schedule OO)
The term "Subsidiary" or "Subsidiaries" shall include corporations,
unincorporated associations, partnerships, joint ventures or similar entities
in
which WEI has an interest, direct or indirect.
(p) Union Matters. An accurate list and description of all union contracts
and collective bargaining agreements of WEI, if any. (Schedule PP)
(q) Employee and Consultant Contracts. A complete and accurate list of all
employee and consultant contracts which WEI may have, other than those
listed in the schedule on Union Matters. (Schedule QQ)
(r) Employee Benefit Plans. Complete and accurate copies of all salary,
stock option, bonus, incentive compensation, deferred compensation, profit
sharing, retirement, pension, group insurance, disability, death benefit or
other benefit plans, trust agreements or arrangements of WEI in effect on the
date hereof or to become effective after the date thereof. (Schedule RR)
(s) Insurance Policies. A complete and accurate list (in all material
respects)
and description of all material insurance policies naming WEI as an insured
or beneficiary or as a loss payable payee or for which WEI has paid all or
part
of the premium in force on the date hereof, specifying any notice or other
information possessed by WEI regarding possible claims thereunder,
cancellation thereof or premium increases thereon, including any policies
now in effect naming WEI as beneficiary covering the business activities of
WEI. (Schedule SS)
(t) Customers. A complete and accurate list (in all material respects) of
the
customers of WEI. (Schedule TT)
(u) Licenses and Permits. A complete list of all license, permits and other
authorizations of WEI. (Schedule UU)
4.02 Organization, Standing and Power. WEI is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware with all requisite corporate power to own or lease its properties
and carry on its business as is now being conducted.
4.03 Qualification. WEI is duly qualified and licensed as a foreign
corporation authorized to do business in each jurisdiction wherein it conducts
business operations. Such jurisdictions, which are the only jurisdictions in
which WEI is duly qualified and licensed as a foreign corporation, is shown
in Schedule NN.
4.04 Capitalization of WEI. The authorized capital stock of WEI consists of
1,500 shares of Common Stock, no par value, all of which shares are issued
and outstanding and are issued to the Shareholder as set forth on Schedule
HH, which shares were duly authorized, validly issued and fully paid and
non-assessable. There are no preemptive rights with respect to the WEI
stock.
4.05 Authority. The execution and delivery of this Agreement and
consummation of the transactions contemplated herein have been duly
authorized by all necessary corporate action, including, but not limited to,
duly and validly authorized action and approval by the Board of Directors,
on the part of WEI. This Agreement constitutes the valid and binding
obligation of WEI and its Shareholder, enforceable against it and him,
respectively, in accordance with its terms, subject to the principles of
equity
applicable to the availability of the remedy of specific performance. This
Agreement has been duly executed by WEI and the execution and delivery
of this Agreement and the consummation of the transactions contemplated by
this Agreement shall not result in any breach of any terms or provisions of
WEI's Articles of Incorporation or Bylaws or of any other agreement, court
order or instrument to which WEI is a party or by which it is bound.
4.06 Absence of Undisclosed Liabilities. WEI has no material liabilities of
any nature, whether fixed, absolute, contingent or accrued, which were not
reflected on the financial statements set forth in Schedule AA nor otherwise
disclosed in this Agreement or any of the Schedules or Exhibits attached
hereto.
4.07 Absence of Changes. Since December 31, 1996, there has not been any
material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or business or WEI.
4.08 Tax Matters. All taxes and other assessments and levies which WEI is
required by law to withhold or to collect have been duly withheld and
collected, and have been paid over to the proper government authorities or are
held by WEI for such payment or are represented by depository receipts, and
all such withholdings and collections and all other payments due in
connection therewith as of December 31, 1996, are duly reflected in the
financial statement as of December 31, 1996, and, since such dates and as of
the date of this Agreement, all such taxes (including, without limitation,
employment taxes, both the employee's and employer's share) have been
provided for. There are no known deficiencies in income taxes for any
periods prior to December 31, 1996, and further, the representations and
warranties as to absence of undisclosed liabilities contained in Section 4.06
include any and all tax liabilities of whatsoever kind or nature (including,
without limitation, all Federal, Provincial, local and foreign income, profit,
franchise, sales, use and property taxes) due or to become due, incurred in
respect of or measured by WEI's income or business prior to the Closing
Date.
4.09 Title to Assets. Except for liens set forth in Schedule WEI and
interests
of third parties as set forth in Schedule DD, WEI is the sole and
unconditional owner of, with good and marketable title to, all the assets
listed
in Schedule BB, free and clear of all mortgages, liens, pledges, charges or
encumbrances of any nature whatsoever.
4.10 Agreements in Force and Effect. Except as set forth in Schedules DD
and EE, all material contracts, agreements, plans, promissory notes,
mortgages, leases, policies, licenses, franchises or similar instruments to
which WEI is a party are valid and in full force and effect on the date
hereof,
and WEI has not breached any material provision of, and is not in default in
any material respect under the terms of, any such contract, agreement, plan,
promissory note, mortgage, lease, policy, license, franchise or similar
instrument which breach or default would have a material adverse effect upon
the business, operations or financial condition of WEI.
4.11 Legal Proceedings, etc. Except as set forth in Schedule KK, there are
no civil, criminal, administrative, arbitration or other such proceedings or
investigations pending or, to the knowledge of WEI or the Shareholder
thereof, threatened, in which, individually or in the aggregate, an adverse
determination would materially and adversely affect the assets, properties,
business or income of WEI. WEI has substantially complied with, and is not
in default in any material respect under, any laws, ordinances, requirements,
regulations or orders applicable to its business.
4.12 Governmental Regulation. To the knowledge of WEI and except as set
forth in Schedule KK, WEI is not in violation of or in default with respect to
any applicable law or any applicable rule, regulation, order, writ or decree
of
any court or any governmental commission, board, bureau, agency or
instrumentality, or delinquent with respect to any report required to be filed
with any governmental commission, board, bureau, agency or instrumentality
which violation or default could have a material adverse effect upon the
business, operations or financial conditions of WEI.
4.13 Broker and Finders. WEI shall be solely responsible for payment to any
broker or finder retained by WEI for any brokerage fees, commissions or
finders' fees in connection with the transactions contemplated herein.
4.14 Accuracy of Information. No representation or warranty by WEI
contained in this Agreement and no statement contained in any certificate or
other instrument delivered or to be delivered to MEI pursuant hereto or in
connection with the transactions contemplated hereby (including, without
limitation, all Schedules and Exhibits hereto) contains or will contain any
untrue statement of a material fact or omits or will omit to state any
material
fact necessary in order to make the statements contained herein or therein not
misleading.
4.15 Subsidiaries. WEI currently has no subsidiaries.
4.16 Consents. Except as listed in Schedule FF, no consent or approval of,
or registration, qualification or filing with, any governmental authority or
other person is required to be obtained or accomplished by WEI or the
Shareholder thereof in connection with consummation of the transactions
contemplated hereby.
4.17 Improper Payments. No person acting on behalf of WEI has made any
payment or otherwise transmitted anything of value, directly or indirectly, to
(a) any official or any government or agency or political subdivision thereof
for the purpose of influencing any decision affecting the business of WEI, (b)
any customer, supplier or competitor of WEI, or employee of such customer,
supplier or competitor, for the purposes of obtaining, retaining or directing
business for WEI, or (c) any political party or any candidate for elective
political office, nor has any fund or other asset of WEI been maintained that
has not fully and accurately recorded on the books of account of WEI.
4.18 Copies of Documents. WEI has made available for inspection and
copying by MEI and its duly authorized representatives, and will continue to
do so at all times, true and correct copies of all documents filed with
governmental agencies which are material to the terms and conditions
contained in this Agreement. Furthermore, all filings by WEI with
governmental agencies have contained information which is true and correct
in all material respects and did not contain any untrue statement of a
material
fact or omit to state any material fact necessary to make the statements made
therein not misleading or which could have any material adverse effect upon
the financial condition or operations of WEI or adversely affect the
objectives
of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF SHAREHOLDER
The Shareholder of WEI hereby represents and warrants to MEI as follows:
5.01 Title to Shares of WEI. The Shareholder owns the full right, title and
interest in and to his respective shares of WEI, free and clear of adverse
claims, liens or encumbrances.
5.02 Legal Capacity of Shareholder. The Shareholder is under no legal
disability with respect to the execution and performance of this Agreement
and Plan of Reorganization.
5.03 Investment Intent of Shareholder. The Shareholder represents and
warrants to MEI that the shares of MEI being acquired pursuant to this
Agreement are being acquired for his own account and for investment and not
with a view to the public resale or distribution of such shares and further
acknowledges that the shares being issued have not been registered under the
Securities Act or any state securities law and are "restricted securities"
as that
term is defined in Rule 144 promulgated by the Securities and Exchange
Commission and must be held indefinitely unless they are subsequently
registered or an exemption from such registration is available.
5.04 Restrictive Legend. The Shareholder acknowledges that the share
certificate or certificates of MEI issued to him in exchange for his or her
WEI
stock will bear a legend restricting future transfer in the following, or
similar,
form:
"THE STOCK REPRESENTED BY THIS CERTIFICATE HAS BEEN
ISSUED IN RELIANCE UPON THE EXEMPTION FROM
REGISTRATION AFFORDED BY SECTION 4(2) OF THE SECURITIES
ACT OF 1933, AS AMENDED. THE STOCK MAY NOT BE
TRANSFERRED WITHOUT REGISTRATION, EXCEPT IN A
TRANSACTION EXEMPT FROM SUCH REGISTRATION."
ARTICLE 6
CONDUCT AND TRANSACTIONS PRIOR TO THE
EFFECTIVE TIME OF THE REORGANIZATION
6.01 Conduct and Transactions of MEI. During the period from the date
hereof to the date of Closing, MEI shall:
(a) Conduct its operations in the ordinary course of business, including but
not limited to, paying all obligations as they mature, complying with all
applicable tax laws, filing all tax returns required to be filed and paying
all
taxes due; and
(b) Maintain its records and books of account in a manner that fairly and
correctly reflect its income, expenses, assets and liabilities.
MEI shall not during such period, except in the ordinary course of business,
without the prior written consent of WEI:
(c) Sell, dispose of or encumber any of its properties or assets;
(d) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(e) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any shares of its capital stock,
except for shares to be issued under that certain Agreement and Plan of
Reorganization among MEI, Missouri Cable TV Corp. and its Shareholders,
which reorganization is to be consummated contemporaneously with the
reorganization contemplated herein;
(f) Except as otherwise contemplated and required by this Agreement, amend
its Articles of Incorporation or merge or consolidate with or into any other
corporation or sell all or substantially all of its assets or change in any
manner the rights of its capital stock or other securities;
(g) Pay or incur any obligation or liability, direct or contingent, of an
amount
in excess of $1,000;
(h) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any of the party;
(i) Make any material change in its insurance coverage;
(j) Increase in any manner the compensation, direct or indirect, of any of
its
officers, except in accordance with existing employment contracts;
(k) Enter into any agreement or make any commitment to any labor union
or organization; or
(l) Make any capital expenditures.
6.02 Conduct and Transactions of WEI. During the period from the date
hereof to the date of Closing, WEI shall:
(a) Conduct the operations of WEI in the ordinary course of business.
WEI shall not during such period, except in the ordinary course of business,
without the prior written consent of MEI:
(b) Sell, dispose of or encumber any of the properties or assets of WEI;
(c) Declare or pay any dividends on shares of its capital stock or make any
other distribution of assets to the holders thereof;
(d) Issue, reissue or sell, or issue options or rights to subscribe to, or
enter
into any contract or commitment to issue, reissue or sell, any shares of its
capital stock or acquire or agree to acquire any share of its capital stock;
(e) Except as otherwise contemplated and required by this Agreement,
amend its Articles of Incorporation or merge or consolidate with or into any
other corporation or sell all or substantially all of its assets or change
in any
manner the rights of its capital stock or other securities;
(f) Pay or incur any obligation or liability, direct or contingent;
(g) Incur any indebtedness for borrowed money, assume, guarantee, endorse
or otherwise become responsible for obligations of any other party, or make
loans or advances to any other party;
(h) Make any material change in its insurance coverage;
(i) Increase in any manner the compensation, direct or indirect, of any
of its
officers or executive employees, except in accordance with existing
employment contracts;
(j) Enter into any agreement or make any commitment to any labor union or
organization; or
(k) Make any material capital expenditures.
ARTICLE 7
RIGHTS OF INSPECTION
7.01 During the period from the date of this Agreement to the date of
Closing, MEI and WEI each agree to use its best efforts to give the other
party, including its representatives and agents, full access to the premises,
books and records of each of the entities, and to furnish the other with such
financial and operating data and other information including, but not limited
to, copies of all legal documents and instruments referred to on any Schedule
or Exhibit hereto, with respect to the business and properties of MEI or WEI,
as the case may be, as the other shall from time to time request; provided,
however, if there are any such investigations: (a) they shall be conducted in
such manner as not to unreasonably interfere with the operation of the
business of the other party and (b) such right of inspection shall not
affect in
any way whatsoever any of the representations or warranties made by the
parties hereunder. In the event of termination of this Agreement, MEI and
WEI will each return to the other all documents, work papers and other
materials obtained from the other party in connection with the transactions
contemplated hereby, and will take such other steps necessary to protect the
confidentiality of such material.
ARTICLE 8
CONDITIONS TO CLOSING
8.01 Conditions to Obligation of WEI. The obligation of WEI to perform
this Agreement is subject to the satisfaction of the following conditions on
or before the Closing, unless waived in writing by WEI:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by MEI which. in the opinion of WEI, would
materially adversely affect the proposed transaction and intent of the parties
as set forth herein. The representations and warranties of MEI set forth in
Article 3 hereof shall be true and correct in all material respects as of
the date
of this Agreement and as of the Closing as though made on and as of the
Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. MEI shall have in all material respects
performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and MEI shall
have complied in all material respects with the course of conduct required by
this Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to counsel for WEI that MEI
has submitted this Agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(d) Financial Statements. WEI shall have been furnished with an unaudited
balance sheet of MEI as of December 31, 1996. Such balance sheet shall
have been prepared in conformity with generally accepted accounting
principles and fairly present the financial position of MEI as of December 31,
1996.
(e) Opinion of MEI Counsel. MEI shall deliver to WEI an opinion of MEI's
counsel, dated as of the date of Closing, in form and substance satisfactory
to counsel for WEI stating:
(i) MEI is a corporation duly organized and validly existing and in good
standing under the laws of the State of Nevada;
(ii) Counsel is not aware of any failure by MEI to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation
may be required to be licensed as a foreign corporation;
(iii) MEI has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of MEI consists of 50,000,000 shares of
common stock, $.0001 par value per share, the number of shares of
authorized common stock of MEI which have been issued is 2,160,000 and
all such issued shares have been duly authorized, validly issued and
outstanding, and are fully paid and non-assessable;
(v) The shares of MEI common stock to be issued to the Shareholder of WEI
pursuant to this Agreement when so issued, will be duly and validly
authorized and issued and fully-paid and non-assessable;
(vi) This Agreement, and any other agreements required hereby, has been
duly executed and delivered by MEI and all corporate action required by MEI
to authorize the reorganization has been taken, and MEI has the corporate
power to effect the reorganization as provided for in this Agreement;
(vii) To the best of Counsel's knowledge, neither the execution or
delivery
by MEI of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by MEI to WEI pursuant to this Agreement or constitute
a material default thereunder;
(viii) Except as set forth on any Schedule delivered by MEI to WEI,
pursuant to this Agreement, to the best of Counsel's knowledge, MEI is not
engaged in or threatened with any suit, action or legal, administrative,
arbitration or other proceeding or governmental investigation;
(ix) All authorizations, consents, approvals, permits and orders of all
Federal
and State governmental agencies required to be obtained by MEI for
consummation of the transactions contemplated by this Agreement have
been obtained;
(x) The Board of Directors and shareholders of MEI have taken all action
required by law, or under the charter documents, including, but not limited
to, the Articles of Incorporation and Bylaws, including all amendments
thereto, of MEI, to the best of Counsel's knowledge, and all other action
required to authorize the execution, delivery and performance of the
Agreement by MEI has been taken; and
(xi) In connection with the exchange of any of its shares and receipt of
shares
of MEI contemplated by the provisions of this Agreement, MEI and WEI are
exempt from registration of such shares.
(f) Statutory Requirements. All statutory requirements for the valid
consummation by MEI of the transactions contemplated by this Agreement
shall have been fulfilled.
(g) Governmental Approval. All authorizations, consents, approvals, permits
and orders of all Federal and State governmental agencies required to be
obtained by MEI for consummation of the transactions contemplated by this
Agreement shall have been obtained.
(h) Employment Agreements. Existing MEI employment agreements, if any,
will have been delivered to Counsel for WEI.
(i) Changes in Financial Condition of MEI. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of MEI, except expenditures in furtherance of this Agreement.
(j) Absence of Pending Litigation. MEI is not engaged in or threatened with
any suit, action, or legal, administrative or other proceedings or
governmental
investigations pertaining to this Agreement or the consummation of the
transactions contemplated hereunder.
8.02 Conditions to Obligation of MEI. The obligation of MEI to perform this
Agreement is subject to the satisfaction of the following conditions on or
before the Closing, unless waived in writing by MEI:
(a) Representations and Warranties. There shall be no information disclosed
in the Schedules delivered by WEI which in the opinion of MEI would
materially adversely affect the proposed transaction and intent of the parties
as set forth in this Agreement. The representations and warranties of WEI set
forth in Article 4 hereof shall be true and correct in all material respects
as of
the date of this Agreement and as of the Closing as though made on and as
of the Closing, except as otherwise permitted by this Agreement.
(b) Performance of Obligations. WEI shall have in all material respects
performed all agreements required to be performed by it under this
Agreement and shall have performed in all material respects any actions
contemplated by this Agreement prior to or on the Closing and WEI shall
have complied in all respects with the course of conduct required by this
Agreement.
(c) Corporate Action. Minutes, certified copies of corporate resolutions
and/or other documentary evidence satisfactory to Counsel for MEI that WEI
has submitted this agreement and any other documents required hereby to
such parties for approval as provided by applicable law.
(d) Consents. Any consents necessary for or approval of any party listed on
any Schedule delivered by WEI whose consent or approval is required
pursuant thereto shall have been obtained.
(e) Financial Statements. MEI shall have been furnished with the unaudited
financial statements of WEI as of December 31, 1996. Such financial
statements shall have been prepared in conformity with generally accepted
accounting principles and fairly present the financial position of WEI as of
December 31, 1996.
(f) Opinion of WEI Counsel. WEI shall deliver to MEI an opinion of WEI's
counsel, dated on the date of Closing, in form and substance satisfactory to
counsel for WEI stating:
(i) WEI is a corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware;
(ii) Counsel is not aware of any failure by WEI to be qualified and licensed
as a foreign corporation in each such jurisdiction where such corporation may
be required to be licensed as a foreign corporation;
(iii) WEI has the corporate power to carry on its business as now being
conducted;
(iv) The authorized capital stock of WEI consists of 1,500 shares of common
stock, no par value; the number of shares of authorized common stock of
WEI which have been issued is 1,500 and all such issued shares have been
duly authorized, validly issued and outstanding, and are fully paid and
non-assessable;
(v) This Agreement has been duly executed and delivered by WEI and is the
valid obligation of WEI and all corporate action required by WEI to authorize
the acquisition which has been taken, and WEI has the corporate power to
effect the acquisition as provided for in this Agreement;
(vi) To the best of Counsel's knowledge, neither the execution or delivery by
WEI of this Agreement, nor compliance with the terms and provisions
thereof, will conflict with or result in a breach of any of the terms,
conditions
or provisions of any agreement, contract or commitment listed on any
Schedule delivered by WEI to MEI pursuant to this Agreement or to the best
of Counsel's knowledge of any judgment, order, injunction, decree, regulation
or ruling of any court of governmental authority, to which WEI is subject, or
constitute a material default thereunder;
(vii) Except as set forth on any Schedule delivered by WEI to MEI, pursuant
to this Agreement, to the best of Counsel's knowledge, WEI is not engaged
in or threatened with any suit, action or legal, administrative, arbitration
or
other proceeding or governmental investigation which might materially and
adversely affect or impair the business or condition, financial or otherwise
of
WEI; and
(viii) All authorizations, consents, approvals, permits and orders of all
Federal and State governmental agencies required to be obtained by WEI for
consummation of the transactions contemplated by this Agreement have been
obtained.
(g) Statutory Requirements. All statutory requirements for the valid
consummation by WEI of the transactions contemplated by this Agreement
shall have been fulfilled.
(h) Change in Financial Condition of WEI. There shall not have occurred
any material adverse change in the financial condition or in the operations of
the business of WEI.
ARTICLE 9
MATTERS SUBSEQUENT TO CLOSING
9.01 Covenant of Further Assurance. The parties covenant and agree that
they shall, from time to time, execute and deliver or cause to be executed and
delivered all such further instruments of conveyance, transfer, assignments,
receipts and other instruments, and shall take or cause to be taken such
further or other actions as the other party or parties to this Agreement may
reasonably deem necessary in order to carry out the purposes and intent of
this Agreement.
ARTICLE 10
NATURE AND SURVIVAL OF REPRESENTATIONS
10.01 All statements contained in any written certificate, schedule,
exhibit
or other written instrument delivered by MEI or WEI pursuant hereto, or
otherwise adopted by MEI, by its written approval, or by WEI by its written
approval, or in connection with the transactions contemplated hereby, shall
be deemed representations and warranties by MEI or WEI as the case may be.
All representations, warranties and agreements made by either party shall
survive for the period of the applicable statute of limitations and until the
discovery of any claim, loss, liability or other matter based on fraud, if
longer.
ARTICLE 11
TERMINATION OF AGREEMENT AND
ABANDONMENT OF REORGANIZATION
11.01 Termination. Anything herein to the contrary notwithstanding, this
Agreement and any agreement executed as required hereunder and the
acquisition contemplated hereby may be terminated at any time before the
Closing Date as follows:
(a) By mutual written consent of the Boards of Directors of MEI and WEI.
(b) By the Board of Directors of MEI if any of the conditions set forth in
Section 8.02 shall not have been satisfied.
(c) By the Board of Directors of WEI if any of the conditions set forth in
Section 8.01 shall not have been satisfied.
11.02 Termination of Obligations and Waiver of Conditions; Payment of
Expenses. In the event this Agreement and the reorganization are terminated
and abandoned pursuant to this Article 11, this Agreement shall become void
and of no force and effect and there shall be no liability on the part of
any of
the parties hereto, or their respective directors, officers, shareholders or
controlling persons to each other. Each party hereto will pay all costs and
expenses incident to its negotiation and preparation of this Agreement and
any of the documents evidencing the transactions contemplated hereby,
including fees, expenses and disbursements of counsel.
ARTICLE 12
EXCHANGE OF SHARES; FRACTIONAL SHARES
12.01 Exchange of Shares. At the Closing, MEI shall issue to the
Shareholder a total of 227,336 shares of MEI Common Stock.
12.02 Fractional Shares. It is intended that no fractional shares or
script
certificates will be issued in connection with the reorganization. In lieu
thereof, if the Shareholder of WEI would be entitled to receive a fractional
share of MEI Common Stock, he will receive cash equal to the fair value of
the fractional share as determined by the Board of Directors of WEI.
ARTICLE 13
MISCELLANEOUS
13.01 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nevada, excluding any conflicts of
laws.
13.02 Notices. All notices necessary or appropriate under this Agreement
shall be effective when personally delivered or deposited in the U. S. mail
system, as the case may be, postage prepaid, certified or registered, return
receipt requested, and addressed to the party's last known address which
addresses are currently as follows:
If to "MEI": Media Entertainment, Inc.
Attn: Xx. Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
If to "WEI": Winter Entertainment, Inc.
Attn: Xx. Xxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
If to "Shareholder": Xx. Xxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxx 00000
13.03 Amendment and Waiver. The parties hereby may, by mutual
agreement in writing signed by each party, amend this Agreement in any
respect. Any term or provision of this Agreement may be waived in writing
at any time by the party which is entitled to the benefits thereof, such
waiver
right shall include, but not be limited to, the right of either party to:
(a) Extend the time for the performance of any of the obligations of the
other;
(b) Waive any inaccuracies in representations by the other contained in this
Agreement or in any document delivered pursuant hereto;
(c) Waive compliance by the other with any of the covenants contained in
this Agreement, and performance of any obligations by the other; and
(d) Waive the fulfillment of any condition that is precedent to the
performance by the party so waiving of any of its obligations under this
Agreement. Any writing on the part of a party relating to such amendment,
extension or waiver as provided in this Section 13.03 shall be valid if
authorized or ratified by the Board of Directors of such party.
13.04 Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The election of any one or
more remedies by MEI or WEI shall not constitute a waiver of the right to
pursue other available remedies.
13.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.06 Benefit. This Agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of MEI, WEI and the
Shareholder.
13.07 Entire Agreement. This Agreement and the Schedules and Exhibits
attached hereto represent the entire agreement of the undersigned regarding
the subject matter hereof, and supersedes all prior written or oral
understandings or agreements between the parties.
13.08 Each Party to Bear its Own Expense. MEI and WEI shall each bear
their own respective expenses incurred in connection with the negotiation,
execution, closing and performance of this Agreement, including counsel fees
and accountant fees.
13.09 Captions and Section Headings. Captions and section headings used
herein are for convenience only and shall not control or affect the meaning
or construction of any provision of this Agreement.
Executed as of the date first written above.
MEI:
MEDIA ENTERTAINMENT, INC.
(a Nevada corporation)
By: /s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Vice President
WEI:
WINTER ENTERTAINMENT, INC.
(a Delaware corporation)
By: /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
President
SHAREHOLDER:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx, individually
