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EXHIBIT 10.1
REORGANIZATION AGREEMENT
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered into
this 9th day of June 1998, is by, between, and among Premiere Mortgage
Resources, Inc., a publicly held Nevada corporation (hereinafter the
"Purchaser"), United National, Inc., a privately-held Nevada corporation
(hereinafter the "Private Company"), and the sole shareholder of the Private
Company (the "Shareholder").
RECITALS:
WHEREAS, the Purchaser wishes to acquire, and the Shareholder is willing
to sell, all of the outstanding stock of the Private Company in exchange solely
for a part of the voting stock of the Purchaser whereby the Shareholder would
acquire a controlling interest of the Purchaser; and
WHEREAS, the parties hereto intend to qualify such transaction as a
tax-free exchange pursuant to Section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, 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, the Purchaser, the Private Company, and the
Shareholder approve and adopt this Agreement and Plan of Reorganization and
mutually covenant and agree with each other as follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the Closing Date the Shareholder shall transfer to the
Purchaser a certificate for 100 shares of common stock of the Private Company,
which in the aggregate shall represent all of the issued and outstanding shares
of the common stock of the Private Company.
1.2 In exchange for the transfer of the common stock of the Private
Company pursuant to subsection 1.1. hereof, the Purchaser shall on the Closing
Date and contemporaneously with such transfer of the common stock of the Private
Company to it by the Shareholder, issue and deliver to the Shareholder 2,266,667
shares of common stock of the Purchaser such that the Shareholder shall own
approximately 48.57% of the outstanding common stock of the Purchaser.
2. Representations and Warranties of the Shareholder. The Shareholder
represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
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2.1 Ownership of Stock.
a. The Shareholder is the record and beneficial owner and
holder of the number of fully paid and nonassessable shares of the common stock
of the Private Company listed in subsection 1.1 above as of the date hereof and
will continue to own such shares of the common stock of the Private Company
until the delivery thereof to the Purchaser on the Closing Date and all such
shares of common stock are or will be on the Closing Date owned free and clear
of all liens, encumbrances, charges and assessments of every nature and subject
to no restrictions with respect to transferability. The Shareholder currently
has, and will have at Closing, full power and authority to dispose, assign, and
transfer his shares of the Private Company in accordance with the terms hereof.
The Shareholder currently has, and will have at Closing, full power and
authority to vote his shares of the Private Company, without restriction of any
kind.
b. Except for this Agreement, there are no outstanding
options, contracts, calls, commitments, agreements or demands of any character
relating to the common stock of the Private Company owned by the Shareholder.
2.2 Accuracy of All Statements Made by the Shareholder. No
representation or warranty by the Shareholder in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by or on behalf of the Shareholder pursuant to this Agreement, nor any document
or certificate delivered to the Purchaser by the Shareholder pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statements contained therein not misleading.
3. Representations and Warranties of the Private Company. The Private
Company represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
3.1 Organization and Authority. The Private Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada with full power and authority to enter into and perform the
transactions contemplated by this Agreement. The Private Company has no wholly
owned or majority owned subsidiaries.
3.2 Capitalization. As of the date of the Closing, the Private
Company will have a total of no more than 100 shares of common stock issued and
outstanding. All of the shares will have been duly authorized and validly issued
and will be fully paid and nonassessable. Except as set forth in Schedule "A"
attached hereto and incorporated herein, there are no options, warrants,
conversion privileges, or other rights presently outstanding for the purchase of
any authorized but unissued stock of the Private Company.
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3.3 Performance of This Agreement. The execution and performance of
this Agreement and the transfer of stock contemplated hereby have been
authorized by the board of directors of the Private Company. The Agreement has
been duly executed and delivered by the Private Company and constitutes the
valid and legally binding obligation of the Private Company, enforceable against
the Private Company in accordance with its terms, subject only to applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the
rights of creditors generally, and subject to the exercise of judicial
discretion in accordance with general terms of equity.
3.4 Financials. True copies of the financial statements of the
Private Company consisting of the balance sheets as of the fiscal year ended
December 3], 1997 (audited), and the three months ended March 31, 1998
(unaudited), and statements of income, cash flow and changes in stockholder's
equity for the fiscal year and the three month period, have been delivered by
the Private Company to the Purchaser. The year-end statements have been examined
and certified by Xxxxxxx Xxxxxxx, CPA. Said financial statements are true and
correct in all material respects and present an accurate and complete disclosure
of the financial condition of the Private Company as of March 31, 1998, and the
earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
3.5 Liabilities. There are no material liabilities of the Private
Company, whether accrued, absolute, contingent or otherwise, which arose or
relate to any transaction of the Private Company, its agents or servants
occurring prior to March 31,1998, which are not disclosed by or reflected in
said financial statements. As of the date hereof; and except as set forth in
Schedule "A" attached hereto, there are no known circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may
hereafter give rise to liabilities, except in the normal course of business of
the Private Company.
3.6 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since March 31, 1998, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of the Private Company, or (ii) any damage, destruction, or
loss to the Private Company (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets, or conditions
of the Private Company.
3.7 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving the Private Company, or its assets, properties,
or business, nor does the Private Company know, or have reasonable grounds to
know, of any basis for any such proceedings, investigations or inquiries,
product liability or other claims, judgments, injunctions or restrictions. In
addition, there are no material proceedings existing, pending or reasonably
contemplated to which any officer, director, or affiliate of the Private Company
or as to which the Shareholder is a party adverse to the Private Company or has
a material interest adverse to the Private Company.
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3.8 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Private Company, and there are no unpaid taxes which are, or
could become a lien on the properties and assets of the Private Company, except
as provided for in the financial statements of the Private Company, or have been
incurred in the normal course of business of the Private Company since that
date. All tax returns of any kind required to be filed have been filed and the
taxes paid or accrued.
3.9 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased by the Private Company.
3.10 Accuracy of All Statements Made by the Private Company. No
representation or warranty by the Private Company in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by or on behalf of the Private Company pursuant to this Agreement, nor any
document or certificate delivered to the Purchaser by the Private Company
pursuant to this Agreement or in connection with actions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statements contained therein
not misleading.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Private Company and to the Shareholder as set
forth below. These representations and warranties are made as an inducement for
the Private Company and the Shareholder to enter into this Agreement and, but
for the making of such representations and warranties and their accuracy, the
Private Company and the Shareholder would not be parties hereto.
4.1 Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada with full power and authority to enter into and perform the
transactions contemplated by this Agreement. The Purchaser has no wholly owned
or majority owned subsidiaries.
4.2 Capitalization. As of the date of the Closing, the Purchaser
will have a total of no more than 2,400,000 shares of common stock (assuming the
cancellation of 2,600,000 shares as set forth in subsection 7.8 below) issued
and outstanding. All of the shares will have been duly authorized and validly
issued and will be fully paid and nonassessable. Except for the Purchaser's
obligations hereunder with respect to the shares to be issued pursuant to
subsection 1.2 hereof, there are no options, warrants, conversion privileges, or
other rights presently outstanding for the purchase of any authorized but
unissued stock of the Purchaser. As of the Closing, the Articles of
Incorporation, as amended, of the Purchaser (the "Purchaser Articles") and as
currently in effect shall be in the form previously furnished to the Private
Company and the Shareholder providing among other things for one authorized
class of stock and 50,000,000 shares of the stock authorized. The rights,
preferences, and privileges of the common stock shall be as set forth in the
Purchaser Articles.
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4.3 Performance of This Agreement. The execution and performance of
this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of the Purchaser. The Agreement has been
duly executed and delivered by the Purchaser and constitutes the valid and
legally binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with its terms, subject only to applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws affecting the rights of creditors
generally, and subject to the exercise of judicial discretion in accordance with
general terms of equity.
4.4 Financials. True copies of the financial statements of the
Purchaser consisting of the balance sheets as of the fiscal years ended December
31, 1997 and 1996, and the three months ended March 31, 1998, and statements of
income, cash flow and changes in stockholder's equity for each of the fiscal
years and the three month period, have been delivered by the Purchaser to the
Private Company. These statements have been examined and certified by Xxxxx X.
Xxxxxxxx, P.C., Certified Public Accountant. Said financial statements are true
and correct in all material respects and present an accurate and complete
disclosure of the financial condition of the Purchaser as of March 31, 1998, and
the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Purchaser,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Purchaser, its agents or servants which are not disclosed by
or reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of the Purchaser.
4.6 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving the Purchaser, or its assets, properties, or
business, nor does the Purchaser know, or have reasonable grounds to know, of
any basis for any such proceedings, investigations or inquiries, product
liability or other claims, judgments, injunctions or restrictions. In addition,
there are no material proceedings existing, pending or reasonably contemplated
to which any officer, director, or affiliate of the Purchaser is a party adverse
to the Purchaser or has a material interest adverse to the Purchaser.
4.7 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Purchaser, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Purchaser, except as provided
for in the financial statements of the Purchaser, or have been incurred in the
normal course of business of the Purchaser since that date. All tax returns of
any kind required to be filed have been filed and the taxes paid or accrued.
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4.8 Hazardous Materials. No hazardous material has been released,
placed, stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently or
previously owned or leased, directly or indirectly, by the Purchaser.
4.9 Legality of Shares to be Issued. The shares of common stock of
the Purchaser to be issued by the Purchaser pursuant to this Agreement, when so
issued and delivered, will have been duly and validly authorized and issued by
the Purchaser, will be fully paid and nonassessable, and will be free and clear
of all liens and encumbrances. Such shares to be issued by the Purchaser
pursuant to subsection 1.2 of this Agreement shall represent approximately
48.57% of the outstanding stock upon closing.
4.10 Governmental Consents. No consent, approval, authorization, or
other action by, or filing with, any governmental authority is required for the
execution and delivery of this Agreement by the Purchaser, or if required, the
requisite consent, approval, or authorization has been obtained, the requisite
filing has been accomplished, or the requisite action has been taken.
4.11 Legal Compliance. The Purchaser has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against it alleging any failure so to comply.
4.12 Accuracy of All Statements Made by the Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by the Purchaser pursuant to this Agreement, nor any document or certificate
delivered to the Private Company or the Shareholder pursuant to this Agreement
or in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits to state or shall omit to state a
material fact necessary to make the statements contained therein not misleading.
5. Covenants of the Parties.
5.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by the
Private Company, if not previously furnished, such entity shall deliver to the
Purchaser copies of the articles of incorporation, as amended, and the current
bylaws of the Private Company, and copies of the resolutions duly adopted by the
board of directors of the Private Company approving this Agreement and the
transactions herein contemplated.
b. Simultaneous with the execution of this Agreement by the
Purchaser, if not previously furnished, such entity shall deliver to the Private
Company copies of the Purchaser
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Articles, and the current bylaws of the Purchaser, and copies of the resolutions
duly adopted by the board of directors of the Purchaser approving this Agreement
and the transactions herein contemplated.
5.2 Access to Information
a. The Purchaser and its authorized representatives shall have
full access during normal business hours to all properties, books, records,
contracts, and documents of the Private Company, and the Private Company shall
furnish or cause to be furnished to the Purchaser and its authorized
representatives all information with respect to its affairs and business as the
Purchaser may reasonably request. The Purchaser shall hold, and shall cause its
representatives to hold confidential, all such information and documents, other
than information that (i) is in the public domain at the time of its disclosure
to the Purchaser; (ii) becomes part of the public domain after disclosure
through no fault of the Purchaser; (iii) is known to the Purchaser or any of its
officers or directors prior to disclosure; or (iv) is disclosed in accordance
with the written consent of the Private Company. In the event this Agreement is
terminated prior to Closing, the Purchaser shall, upon the written request of
the Private Company, promptly return all copies of all documentation and
information provided by the Private Company hereunder.
b. The Private Company and its authorized representatives
shall have full access during normal business hours to all properties, books,
records, contracts, and documents of the Purchaser, and the Purchaser shall
furnish or cause to be furnished to the Private Company and its authorized
representatives all information with respect to its affairs and business the
Private Company may reasonably request. The Private Company shall hold, and
shall cause its representatives to hold confidential, all such information and
documents, other than information that (i) is in the public domain at the time
of its disclosure to the Private Company; (ii) becomes part of the public domain
after disclosure through no fault of the Private Company; (iii) is known to the
Private Company or any of its officers or directors prior to disclosure; or (iv)
is disclosed in accordance with the written consent of the Purchaser. In the
event this Agreement is terminated prior to Closing, the Private Company shall,
upon the written request of the Purchaser, promptly return all copies of all
documentation and information provided by the Purchaser hereunder.
5.3 Actions Prior to Closing. From and after the date of this
Agreement and until the Closing Date:
a. The Purchaser and the Private Company shall each carry on
its business diligently and substantially in the same manner as heretofore, and
neither party shall make or institute any unusual or novel methods of purchase,
sale, management, accounting or operation.
b. Neither the Purchaser nor the Private Company shall enter
into any contract or commitment, or engage in any transaction not in the usual
and ordinary course of business and consistent with its business practices.
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c. Neither the Purchaser nor the Private Company shall amend
its articles of incorporation or bylaws or make any changes in authorized or
issued capital stock, except as provided in this Agreement.
d. The Purchaser and the Private Company shall each use its
best efforts (without making any commitments on behalf of the company) to
preserve its business organization intact.
e. Neither the Purchaser nor the Private Company shall do any
act or omit to do any act, or permit any act or omission to act, which will
cause a material breach of any material contract, commitment, or obligation of
such party.
f. The Purchaser and the Private Company shall each duly
comply with all applicable laws as may be required for the valid and effective
issuance or transfer of stock contemplated by this Agreement.
g. Neither the Purchaser nor the Private Company shall sell or
dispose of any property or assets, except products sold in the ordinary course
of business.
h. The Purchaser and the Private Company shall each promptly
notify the other of any lawsuits, claims, proceedings, or investigations that
may be threatened, brought, asserted, or commenced against it, its officers or
directors involving in any way the business, properties, or assets of such
party.
5.4 Shareholders' Approval. The Purchaser shall promptly submit this
Agreement and the transactions contemplated hereby for the approval of its
stockholders by written consent or at a meeting of stockholders and, subject to
the fiduciary duties of the Board of directors of the Purchaser under applicable
law, shall use its best efforts to obtain stockholder approval and adoption of
this Agreement and the transactions contemplated hereby. In connection with such
shareholder approval, the Purchaser shall prepare a proxy or information
statement to be furnished to the shareholders of the Purchaser setting forth
information about this Agreement and the transactions contemplated hereby. The
Private Party shall promptly furnish to the Purchaser all information, and take
such other actions, as may reasonably be requested in connection with any action
to be taken by the Purchaser in connection with the immediately preceding
sentence. The Private Company shall have the right to review and provide
comments to the proxy or information statement prior to mailing to the
shareholders of the Purchaser.
5.5 No Covenant as to Tax or Accounting Consequences. It is
expressly understood and agreed that neither the Purchaser nor its officers or
agents has made any warranty or agreement, expressed or implied, as to the tax
or accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
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5.6 Indemnification. The Private Company and the Shareholder,
severally and not jointly, shall indemnify Purchaser for any loss, cost,
expense, or other damage (including, without limitation, attorneys' fees and
expenses) suffered by Purchaser resulting from, arising out of, or incurred with
respect to the falsity or the breach of any representation, warranty, or
covenant made by the Private Company or the Shareholder herein, and any claims
arising from the operations of the Private Company prior to the Closing Date.
Purchaser shall indemnify and hold the Private Company and the Shareholder
harmless from and against any loss, cost, expense, or other damage (including,
without limitation, attorneys' fees and expenses) resulting from, arising out
of, or incurred with respect to, or alleged to result from, arise out of or have
been incurred with respect to, the falsity or the breach of any representation,
covenant, warranty, or agreement made by Purchaser herein, and any claims
arising from the operations of Purchaser prior to the Closing Date. The
indemnity agreement contained herein shall remain operative and in full force
and effect for a period of one year from the Closing of this Agreement,
regardless of any investigation made by or on behalf of any party.
5.7 Publicity. The parties agree that no publicity, release, or
other public announcement concerning this Agreement or the transactions
contemplated by this Agreement shall be issued by any party hereto without the
advance approval of both the form and substance of the same by the other parties
and their counsel, which approval, in the case of any publicity, release, or
other public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
5.8 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall bear its own respective expenses incurred in
connection with the negotiation and preparation of this Agreement, in the
consummation of the transactions contemplated hereby, and in connection with all
duties and obligations required to be performed by each of them under this
Agreement.
5.9 Further Actions. Each of the parties hereto shall take all such
further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the Closing Date shall be subject
to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Private Company and the Shareholder in this Agreement or
given on their behalf hereunder shall be substantially accurate in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made or given on and as of the Closing
Date.
6.2 Performance of Obligations and Covenants. The Private Company
and the Shareholder shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by them
prior to or at the Closing.
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6.3 Officer's Certificate. The Purchaser shall have been furnished
with a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to the Purchaser), executed by an executive officer of
the Private Company, certifying to the fulfillment of the conditions specified
in subsections 6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Private Company to conduct its business or
the earning power thereof on the same basis as in the past.
6.6 Shareholders' Approval. The holders of not less than a majority
of the outstanding common stock of the Purchaser shall have voted for
authorization and approval of this Agreement and the transactions contemplated
hereby.
6.7 Shareholder's Execution of Agreement. This Agreement shall have
been duly executed and delivered by the Shareholder.
7. Conditions Precedent to Obligations of the Private Company and the
Shareholder. Each and every obligation of the Private Company and the
Shareholder to be performed on the Closing Date shall be subject to the
satisfaction prior thereto of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties made by the Purchaser in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date.
7.2 Performance of Obligations and Covenants. The Purchaser shall
have performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
7.3 Officer's Certificate. The Private Company shall have been
furnished with a certificate (dated as of the Closing Date and in form and
substance reasonably satisfactory to the Private Company), executed by an
executive officer of the Purchaser, certifying to the fulfillment of the
conditions specified in subsections 7.1 and 7.2 hereof.
7.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party
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hereto that seeks to restrain or enjoin or otherwise questions the legality or
validity of the transactions contemplated by this Agreement or which seeks
substantial damages in respect thereof.
7.5 No Material Adverse Change. As of the Closing Date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Purchaser to conduct its business.
7.6 No Material Liabilities of Purchaser. As of the Closing Date the
Purchaser shall have no liabilities which in the aggregate exceed $1,000.
7.7 Name Change. As of the Closing Date the shareholders of the
Purchaser shall have duly approved an amendment to the Purchaser Articles
changing the name of the Purchaser to "United National Financial Corporation" or
some other name designated by the Private Company.
7.8 Cancellation of Outstanding Shares. As of the Closing Date
shareholders of the Purchaser shall cancel an aggregate of 2,600,000 outstanding
common shares of the Purchaser and return such shares to the authorized but
unissued shares of the Purchaser, such that immediately prior to closing the
Purchaser shall have a total of 2,400,000 shares duly issued and outstanding.
7.9 Assumption of Convertible Notes. At the Closing the Purchaser
shall assume the obligation to issue shares of common stock of the Purchaser to
the holders of promissory notes issued by the Private Company as set forth in
Schedule "A" at the rate of one share of common stock of the Purchaser for each
$1.00 of principle of such notes.
7.10 Assumption of Outstanding Warrants. At the Closing the
Purchaser shall assume the obligation to issue shares of the common stock of the
Purchaser to the holders of outstanding warrants issued by the Private Company
as set forth in Schedule "A" at the exercise price of $1.00 per share.
7.11 Legal Opinion. At the Closing the Purchaser shall deliver an
opinion of its counsel in form reasonably acceptable to counsel for the Private
Company that:
a. The Purchaser is duly incorporated and validly existing
under the laws and jurisdiction of the State of Nevada.
b. To the knowledge of such counsel, and based upon
representations made by the Purchaser, there is no action, proceeding or
investigation pending or threatened against the Purchaser which might reasonably
result, either individually or in the aggregate, in any material adverse change
in the business, conditions, affairs, or operations of the Purchaser.
c. To the knowledge of such counsel, and based upon
representations made by the Purchaser, the Purchaser is not a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality.
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d. All issued and outstanding shares of common stock of the
Purchaser have been duly authorized and validly issued and are fully paid and
nonassessable.
e. This Agreement, the issuance of the shares of common stock
of the Purchaser as described herein have been duly approved by all required
corporate action and that, upon compliance by the Private Company and the
Shareholder with all closing requirements, such shares, upon delivery, shall be
validly issued and outstanding, fully paid and nonassessable.
f. This Agreement has been duly executed and delivered by the
Purchaser and constitutes the valid and legally binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject only to applicable bankruptcy, insolvency, reorganization, moratorium,
and other laws affecting the rights of creditors generally, and subject to the
exercise of judicial discretion in accordance with general terms of equity.
g. No consent, approval, authorization, or other action by, or
filing with, any governmental authority is required for the execution and
delivery of this Agreement by the Purchaser, or if required, the requisite
consent, approval, or authorization has been obtained, the requisite filing has
been accomplished, or the requisite action has been taken.
h. To the knowledge of such counsel, and based upon
representations made by the Purchaser, the Purchaser has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against it alleging any failure so to comply.
8. Securities Law Provisions.
8.1 Restricted Securities. Each of the parties hereto, severally and
not jointly, represents that he, she, or it is aware that the shares issued or
transferred to him, her, or it will not have been registered pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), or any state securities
act, and thus will be restricted securities as defined in Rule 144 promulgated
by the Securities and Exchange Commission (the "SEC"). Therefore, under current
interpretations and applicable rules, he, she, or it will probably have to
retain such shares for a period of at least one year and at the expiration of
such one year period his, her, or its sales may be confined to brokerage
transactions of limited amounts requiring certain notification filings with the
SEC and such disposition may be available only if the issuer is current in its
filings with the SEC under the Securities Exchange Act of 1934, as amended, or
other public disclosure requirements.
8.2 Non-distributive Intent. Each of the parties hereto, severally
and not jointly, covenants and warrants that the shares received are acquired
for his, her, or its own account and not with the present view towards the
distribution thereof and he, she, or it will not dispose of such shares except
(i) pursuant to an effective registration statement under the 1933 Act, or (ii)
in any other
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transaction which, in the opinion of counsel acceptable to the issuer, is exempt
from registration under the 1933 Act, or the rules and regulations of the SEC
thereunder. In order to effectuate the covenants of this subsection, an
appropriate legend will be placed upon each of the certificates of common stock
issued or transferred pursuant to this Agreement, and stop transfer instructions
shall be placed with the transfer agent for the securities.
8.3 Evidence of Compliance with Private Offering Exemption. Each of
the parties hereto, severally and not jointly, hereby represents and warrants
that he, she, or it, either individually or together with his, her, or its
representative, has such knowledge and experience in business and financial
matters that he, she, or it is capable of evaluating the risks of this Agreement
and the transactions contemplated hereby, and that the financial capacity of
such party is of such proportion that the total cost of such person's commitment
in the shares would not be material when compared with his, her, or its total
financial capacity. Upon the written request of the issuer of the securities
issued or transferred pursuant to this Agreement, any party hereto shall provide
such issuer with evidence of compliance with the requirements of any federal or
state exemption from registration. The Purchaser and the Private Company shall
each file, with the assistance of the other and its respective legal counsel,
such notices, applications, reports, or other instruments as may be deemed by
each of them to be necessary or appropriate in an effort to document reliance on
such exemptions, unless an exemption requiring no filing is available in the
particular jurisdiction, all to the extent and in the manner as may be deemed by
such parties to be appropriate.
9. Change of Management. Upon and as a condition of Closing this
Agreement:
9.1 Prior to Closing the Purchaser will authorize a reduction in the
number of directors to one person and shall present to its shareholders for
approval the election of Xxxxxx Xxxxx as the sole director of the Purchaser
effective immediately following the Closing of this Agreement. Prior to Closing
the Private Company will furnish material information of Xx. Xxxxx as a nominee
to be elected by the shareholders of the Purchaser. Purchaser reserves the right
to refuse to cause the nomination such person as a director of Purchaser if,
after review of the foregoing information concerning said person, it is the
opinion of Purchaser that the election of such person would not be in the best
interests of Purchaser.
9.2 The Private Company reserves the right to terminate this
Agreement if the nominee selected by it is not elected or appointed as set forth
above.
10. Closing.
10.1 Time and Place. The Closing of this transaction ("Closing")
shall take place at 00 Xxxx 000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx, at 2:00
pm, June 30, 1998, or at such other time and place as the parties hereto shall
agree upon. Such date is referred to in this Agreement as the "Closing Date."
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10.2 Documents To Be Delivered by the Private Company and the
Shareholder. At the Closing the Private Company and the Shareholder shall
deliver to the Purchaser the following documents:
a. A stock certificate for the number of shares of common
stock of the Private Company in the manner and form required by subsection 1.1
hereof.
b. The certificate required pursuant to subsection 6.3 hereof.
c. Such other documents of transfer, certificates of
authority, and other documents as the Purchaser may reasonably request.
10.3 Documents To Be Delivered by the Purchaser. At the Closing the
Purchaser shall deliver to the Private Company and the Shareholder the following
documents:
a. Certificates for the number of shares of common stock of
the Purchaser as determined in sub-section 1.2 hereof.
b. The certificate required pursuant to subsection 7.3 hereof.
c. The legal opinion required pursuant to subsection 7.11
hereof.
d. A certificate of good standing from the State of Nevada
dated not more than thirty days prior to the closing.
e. Such other documents of transfer, certificates of
authority, and other documents as the Private Company and the Shareholder may
reasonably request.
11. Termination. This Agreement may be terminated by the Purchaser or the
Private Company by notice to the other if, (i) at any time prior to the Closing
Date any event shall have occurred or any state of facts shall exist that
renders any of the conditions to its or their obligations to consummate the
transactions contemplated by this Agreement incapable of fulfillment, or (ii) on
July 31, 1998, if the Closing shall not have occurred. Following termination of
this Agreement no party shall have liability to another party relating to such
termination, other than any liability resulting from the breach of this
Agreement by a party prior to the date of termination.
12. Miscellaneous.
12.1 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
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Purchaser: 0000 Xxxx Xxxxxx Xxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
With copy to: W. Xxxxxxx Xxxxxx
Attorney at Law
0000 Xxxxx 000 Xxxx
Xxxxx 00-000
Xxxx Xxxx Xxxx, XX 00000
Private Company and
Shareholder: Xxxxxx Xxxxx
000 Xxxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000
With copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
12.2 Default. Should any party to this Agreement default in any of
the representations, warranties, covenants, conditions, or promises contained
herein, the defaulting party shall pay all costs and expenses, including a
reasonable attorney's fee, which may arise or [ILLEGIBLE] from enforcing this
Agreement, or in pursuing any remedy provided hereunder or by the statutes of
the State of Utah.
12.3 Assignment. This Agreement may not be assigned in whole or in
part by the parties hereto without the prior written consent of the other party
or parties, which consent shall not be unreasonably withheld.
12.4 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
12.5 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
12.6 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations,
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representations, prior discussions, letters of intent, and preliminary
agreements between the parties hereto relating to the subject matter of this
Agreement.
12.7 Interpretation of Agreement. This Agreement shall be
interpreted and construed as if equally drafted by all parties hereto.
12.8 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
12.9 Further Action. The parties hereto agree to execute and deliver
such additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
12.10 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
12.11 Full Knowledge. By their signatures, the parties acknowledge
that they have carefully read and fully understand the terms and conditions of
this Agreement, that each party has had the benefit of counsel, or has been
advised to obtain counsel, and that each party has freely agreed to be bound by
the terms and conditions of this Agreement.
12.12 Headings. The descriptive headings of the various sections or
parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
12.13 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement
and Plan of Reorganization as of the day and year first above written.
PURCHASER: Premiere Mortgage Resources, Inc.
By
---------------------------
Xxxxxx X. Xxxxxx, President
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PRIVATE COMPANY: United National, Inc.
By /s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx, President
SHAREHOLDER:
/s/ Xxxxxx Xxxxx
------------------------------
Xxxxxx Xxxxx, individually
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SCHEDULE "A"
TO THE
AGREEMENT AND PLAN OF REORGANIZATION
The following table sets forth all of the outstanding convertible
promissory notes issued by the Private Company:
Convertible into Conversion
Note Holder Amount Due Date Number of Shares Price
----------- ------ -------- ---------------- -----
SuperNova, Inc. $100,000 5/31/98 100,000 $1.00/Share
Xxxxxxx Xxxxx $200,000 9/15/98 200,000 $1.00/Share
Xxxxxx X. Xxxx $50,000 9/15/98 50,000 $1.00/Share
Xxxxx Xxxx $50,000 9/15/98 50,000 $1 00/Share
Azucar, Ltd. $33,000 9/15/98 33,000 $1.00/Share
Visual Company $25,000 9/15/98 25,000 $1.00/Share
The following table sets forth all of the outstanding warrants issued by
the Private Company:
Expiration
Warrant Holder Number of Warrants Exercise Price Date
-------------- ------------------ -------------- ----
SuperNova, Inc. 200,000 $1.00/Share 2/9/00
Xxxxxxx Xxxxx 200,000 $1.00/Share 3/18/00
Xxxxxx X. Xxxx 50,000 $1.00/Share 3/23/00
Xxxxx Xxxx 50,000 $1.00/Share 4/2/00
Select Media, Ltd. 300,000 $1.00/Share 4/2/00
Azucar, Ltd. 66,000 $1.00/Share 6/3/00
Visual Company 50,000 $1.00/Share 6/5/00
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