Exhibit 2.5
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Plan") is made this 5th day
of March, 1996, among iMALL, INC., a Nevada corporation ("iMall"); INTER-
ACTIVE MARKETING GROUP, INC., a Utah corporation, any and all of its
subsidiaries (hereinafter collectively referred to as "IMG") and its
shareholders (hereinafter "Shareholders").
iMall wishes to acquire all the issued and outstanding stock of IMG for
and in exchange for stock of iMall, in a stock for stock transaction intending
to qualify as a tax-free exchange pursuant to Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended. The parties intend for this Plan
to represent the terms and conditions of such tax-free reorganization, which
Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof, the Shareholders of
IMG agree to assign, transfer, and deliver to iMall, free and clear of all
liens, pledges, encumbrances, charges, restrictions or known claims of any
kind, nature or description, all of their shares of IMG stock, and iMall
agrees to acquire such shares on the date thereof, or as soon as practicable
thereafter, by issuing and delivering in exchange therefore solely common
shares of iMall's stock, par value $0.001, in the aggregate of 150,000 shares,
subject to the provisions of this Plan, which shall represent, as a result
thereof, approximately one percent (1%) of the then issued and outstanding
shares of iMall. Subsequent to the date hereof, the Shareholders shall, upon
the surrender of the IMG certificates representing their respective beneficial
and record ownership of all of the issued and outstanding shares of IMG to
iMall, as soon as practicable hereafter, and further provided an exemption
from the registration provisions of Section 5 of the Securities Act of 1933 is
available for the issuance thereof, the Shareholders shall be entitled to
receive a certificate(s) evidencing shares of the exchanged iMall stock as
provided for herein. Upon the consummation of the transaction contemplated
herein, iMall shall be the beneficial and record owner of all of the issued
and outstanding stock of IMG.
1.2 Additional Shares. In addition to the shares of iMall which
shall be delivered to the Shareholders in accordance with Section 1.1 herein,
the Shareholders will be entitled to receive certain additional shares of
iMall ("Additional iMall Shares") based upon profits earned by IMG during the
fiscal years ended February 28, 1997, 1998 and 1999, in accordance with the
terms and conditions set forth in this Section 1.2. Any Additional iMall
Shares which become payable to the Shareholders pursuant to this Section 1.2
shall be distributed to each Shareholder in an amount corresponding to the
percentage set forth opposite their respective names in Exhibit "A" hereto.
(a) Additional iMall Share Amounts. For the fiscal year ended
February 28, 1997, the Shareholders shall receive 50,000 Additional iMall
Shares if IMG's net revenues exceed $250,000. For the fiscal year ended
February 28, 1998, the Shareholders shall receive 50,000 Additional iMall
Shares if IMG's net revenues exceed $750,000. For the fiscal year ended
February 28, 1999, the Shareholders shall receive 50,000 Additional iMall
Shares if IMG's net revenues exceed $1,250,000. Net revenues shall be
determined using Generally Accepted Accounting Principals and the amount of
net revenues of IMG for purposes of this Section 1.2 may be stipulated to by
officers of both iMall and IMG, or by an independent certified public
accountant. If IMG's net revenues are less than $750,000 or $1,250,000 for
the respective fiscal years ending February 28, 1998 and February 28, 1999,
the Shareholders shall be entitled to receive a percentage of the 50,000
Additional iMall's Shares for that particular fiscal year equal to the
percentage of actual revenue achieved by IMG for the respective fiscal year in
relation to $750,000 or $1,250,000 as the case may be.
(b) Escrow and Payout. 150,000 shares of iMall common stock,
representing the maximum number of Additional iMall Shares which could be
transferred to the Shareholders pursuant to this Section 1.2 shall be placed
in escrow on the date hereof with Xxxxxx X. Xxxxxxx, Esq. (the "Escrow Agent")
The Escrow Agent shall transfer any Additional iMall Shares to the
Shareholders only after receiving written authorization from officers of both
IMG and iMall authorizing a release of Additional iMall Shares. Any
Additional iMall Shares to which the Shareholders may be entitled as a result
of 1996 net revenues will not be transferred to the Shareholders prior to
March 1, 1997. However, in both fiscal 1997 and fiscal 1998, any time IMG
achieves the net revenue requirements for the respective fiscal year,
Additional iMall Shares may be transferred to the Shareholders whenever the
Escrow Agent receives proper authorization to so transfer. Any Additional
iMall Shares for which the Escrow Agent has not received transfer instructions
as of March 31, 1999, shall be transferred back to iMall.
(c) Assignability. Neither iMall nor IMG or any Shareholder may
assign any of its rights to any of the Additional iMall Shares while any
Additional iMall Shares remain in escrow pursuant to Section 1.2(b).
(d) Changes in iMall Capital Structure. In the event there is any
change in the iMall common stock by reason of a stock dividend issued with
respect to iMall common stock, or a recapitalization, reclassification, stock
split, or combination of shares with respect to such iMall common stock, or if
the outstanding iMall common stock should, by reason of a merger,
consolidation, acquisition of stock or property, reorganization, or
liquidation, be exchanged for other shares of iMall or of another corporation
which is a party to such transaction, any Additional iMall Shares to be issued
and delivered to the Shareholders pursuant to this Section 1.2 shall be the
shares into or for which the Additional iMall Shares to be issued and
delivered under this agreement would have been changed or exchanged had such
Shares already been issued and delivered to the Shareholders and become
outstanding at the time of such event.
1.3 Anti-Dilution. For all relevant purposes of this Plan, the number
of iMall shares to be issued and delivered pursuant to this Plan, including
any Additional iMall Shares, shall be appropriately adjusted to take into
account any stock split, stock dividend, reverse stock split,
recapitalization, or similar change in iMall common stock, which may occur
between the date of the execution of this Plan and the date of the delivery of
such shares.
1.4 Delivery of Certificates. The Shareholders shall transfer to iMall
at the closing provided for in Section 2 (the "Closing") the shares of common
stock of IMG listed opposite their respective names on Exhibit A hereto (the
"IMG shares") in exchange for shares of the common stock of iMall as outlined
above in Section 1.1 hereof (the "iMall Stock"). All of such shares of iMall
common stock shall be issued at the closing to the Shareholders, in the
numbers shown opposite their respective names in Exhibit "A." The transfer of
IMG shares by the Shareholders shall be effected by the delivery to iMall at
the Closing of certificates representing the transferred shares endorsed in
blank or accompanied by stock powers executed in blank, with all signatures
guaranteed by a national bank and with all necessary transfer taxes and other
revenue stamps affixed and acquired at the Shareholders' expense.
1.5 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as iMall may request in order to more
effectively sell, transfer and assign clear title and ownership in the IMG
shares to iMall.
1.6 Management Contracts. Subsequent to the execution hereof,
management contracts shall be entered into between iMall and the officers of
IMG which contracts shall conform to the understandings of the parties set
forth in the letter of intent executed by the parties.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Xxxxxx X. Xxxxxxx, Esq. on April 5, 1996 or at such other
time or place as may be mutually agreed upon in writing by the parties. The
Closing may also be accomplished by wire, express mail or other courier
service, conference telephone communications or as otherwise agreed by the
respective parties or their duly authorized representatives. In any event,
the closing of the transactions contemplated by this Plan shall be effected as
soon as practicable after all of the conditions contained herein have been
satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby.
Section 3
Representations, Warranties and Covenants of iMall
iMall represents and warrants to, and covenants with, the Shareholders
and IMG as follows:
3.1 Corporate Status. iMall is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada. iMall
has full corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business on all material respects as it is now being conducted, and there is
no jurisdiction in which the character and location of the assets owned by it,
or the nature of the business transacted by it, requires qualification.
Included in the iMall schedules (defined below) are complete and correct
copies of its Articles of Incorporation and Bylaws as in effect on the date
hereof. The execution and delivery of this Plan does not, and the
consummation of the transactions contemplated hereby will not, violate any
provision of iMall's Articles of Incorporation or Bylaws. iMall has taken all
action required by law, its Articles of Incorporation, its Bylaws, or
otherwise, to authorize the execution and delivery of this Plan.
3.2 Capitalization. The authorized capital stock of iMall as of the
date hereof consists of 40,000,000 common shares, par value $0.001. The
common shares of iMall issued and outstanding are fully paid, non-assessable
shares. There are no outstanding options, warrants, or calls or any
understanding, agreements, commitments, contracts or promises with respect to
the issuance of iMall's common stock or with regard to any options, warrants
or other contractual rights to acquire any of iMall's authorized but unissued
common shares.
3.3 Financial Statements.
(a) iMall hereby warrants and covenants to IMG that the audited
financial statements for its year ended December 31, 1995, December 31, 1994
and 1993, fairly and accurately represent the financial condition of IMall and
that the same will be prepared along with the period ended as of the date of
Closing, for consolidation by an independent public accountant, which shall be
prepared in accordance with generally accepted accounting principles
consistently applied, on or before the expiration of forty-five days from the
date of Closing.
(b) iMall hereby warrants and represents that the audited financial
statements for the periods set forth in subparagraph (a), supra, fairly and
accurately represent the financial condition of iMall as submitted heretofore
to IMG for examination and review.
3.4 Subsidiaries. iMall has three subsidiaries: Cabot, Xxxxxxxx &
Xxxx, Inc., a Utah Corporation ("CR&R"), Madison York, Inc., a Utah
Corporation ("Madison"), and R&R Advertising, Inc., a California Corporation
("R&R").
3.5 Conduct of Business. iMall, Inc. owns and operates a "shopping
mall" on the Internet. Through the Company's subsidiaries, Madison, CR&R and
R&R, the company provides consulting services to businesses interested in
marketing their products or services on the Internet.
3.6 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of iMall, threatened by or against or
effecting iMall at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
iMall does not have any knowledge of any default on its part with respect to
any judgment, order, writ, injunction, decree, warrant, rule, or regulation of
any court, arbitrator, or governmental agency or instrumentality.
3.7 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, iMall and its present management will (i) give to
the Shareholders and IMG, or their duly authorized representatives, full
access, during normal business hours, to all of its books, records, contracts
and other corporate documents and properties so that the Shareholders and IMG,
or their duly authorized representatives, may inspect them; and (ii) furnish
such information concerning the properties and affairs of iMall as the
Shareholders and IMG, or their duly authorized representatives, may reasonably
request. Any such request to inspect iMall's books shall be directed to
iMall' counsel, Xxxxxx X. Xxxxxxx, at the address set forth herein under
Section 10.4 Notices.
3.8 Confidentiality. Until the Closing (and thereafter if there is no
Closing), iMall and its representatives will keep confidential any information
which they obtain from the Shareholders or from IMG concerning its properties,
assets and the proposed business operations of IMG. If the terms and
conditions of this Plan imposed on the parties hereto are not consummated on
or before 5:00 p.m. MST on May 1, 1996 or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, iMall will return
to IMG all written matter with regard to IMG obtained in connection with the
negotiations or consummation of this Plan.
3.9 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or there
material agreements or instrument to which iMall was or is a party, or to
which any of its assets or operations are subject, and will not conflict with
any provision of the Articles of Incorporation or Bylaws of iMall.
3.10 Corporate Authority. iMall has full corporate power and authority
to enter into this Plan and to carry out its obligations hereunder and will
deliver to the Shareholders and IMG, or their respective representatives, at
the Closing, a certified copy of resolutions of its Board of Directors
authorizing execution of this Plan by its officers and performance thereunder.
3.11 Consent of Shareholders. iMall hereby warrants and represents that
the Shareholders of iMall, being the owners of a majority of the issued and
outstanding stock of the Corporation consented in writing to the authorization
to execute an Agreement and Plan of Reorganization as between iMall and IMG
pursuant to a stock-for-stock transaction in which iMall would acquire all of
the issued and outstanding shares of IMG in exchange for the issuance of up to
a total of 300,000 common shares of iMall.
3.12 Special Covenants and Representations Regarding the Exchanged iMall
Stock. The consummation of this Plan and the transactions herein contemplated
include the issuance of the exchanged iMall shares to the Shareholders, which
constitutes an offer and sale of securities under the Securities Act of 1933,
as amended, and applicable states' securities laws. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
requirements of such statutes which depend interlace on the circumstances
under which the Shareholders acquire such securities. In connection with the
reliance upon exemptions from the registration and prospectus delivery
requirements for such transactions, at the Closing, Shareholders shall cause
to be delivered to iMall a Letter(s) of Investment Intent in the form attached
hereto as Exhibit B and incorporated herein by reference.
3.13 Undisclosed or Contingent Liabilities. iMall hereby represents and
warrants that it has no undisclosed or contingent liabilities which have not
been disclosed to IMG.
3.14 Information. The information concerning iMall set forth in this
Plan, and the iMall schedules attached hereto, are complete and accurate in
all material respects and do not contain, or will not contain, when delivered,
any untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to IMG in connection with this Plan.
3.15 Title and Related Matters. iMall has good and marketable title to
all of its properties, interests in properties, and assets, real and personal,
which are reflected, or will be reflected, in the iMall balance sheets, free
and clear of any and all liens and encumbrances.
3.16 Contracts or Agreements. iMall is not bound by any material
contracts, agreements or obligations which it has not already disclosed to
IMG.
3.17 Governmental Authorizations. iMall has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. iMall has obtained a listing in Xxxxx'x OTC Industrial Manual
which is recognized manual, recognized by the various states as an exemption
from registration provisions of any such state for the purposes of interstate
trading of iMall stock. Except for compliance with federal and state
securities laws, no authorization, approval, consent or order of, or
registration, declaration, or filing with, any court or other governmental
body is required in connection with the execution and delivery by iMall of
this Plan and the consummation by IMG of the transactions contemplated hereby.
3.18 Compliance with Laws and Regulations. iMall has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of iMall or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to IMG.
3.19 Approval of Plan. The Board of Directors of iMall has authorized
the execution and delivery of this Plan by iMall and have approved the Plan
and the transactions contemplated hereby. iMall has full power, authority,
and legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
3.20 Investment Intent. iMall is acquiring the IMG shares to be
transferred to it under this Plan for investment and no with a view to the
sale or distribution thereof, and iMall has no commitment or present intention
to liquidate IMG or to sell or otherwise dispose of the IMG shares.
3.21 Unregistered Shares and Access to Information. iMall understands
that the offer and sale of the IMG shares have not been registered with or
reviewed by the Securities and Exchange Commission under the Securities Act of
1933, as amended, or with or by any state securities law administrator, and no
federal, state securities law administrator has reviewed or approved any
disclosure or other material concerning IMG or the IMG shares. iMall has been
provided with and reviewed all information concerning IMG, the IMG shares as
it has considered necessary or appropriate as a prudent and knowledgeable
investor to enable it to make an informed investment decision concerning the
IMG shares. iMall has made an investigation as to the merits and risks of its
acquisition of the IMG Shares and has had the opportunity to ask questions of,
and has received satisfactory answers from, the officers and directors of IMG
concerning IMG, the IMG shares and related matters, and has had an opportunity
to obtain additional information necessary to verify the accuracy of such
information and to evaluate the merits and risks of the proposed acquisition
of the IMG shares.
3.22 iMall Schedules. iMall has delivered to IMG the following items
listed below, hereafter referred to as the "iMall Schedules", which is hereby
incorporated by reference and made a part hereof. A certification executed by
a duly authorized officer of iMall on or about the date within the Plan is
executed to certify that the iMall Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) iMall Prospectus;
(c) Financial statements;
(d) Shareholder list;
(e) Resolution of Directors approving Plan;
(f) Officer's Certificate as required under Section 6.2 of the
Plan;
(g) Opinion of counsel as required under Section 6.4 of the Plan;
(h) Certificate of Good Standing;
(i) Consent of Shareholders approving Plan;
(j) Copy of listing in Xxxxx'x Over-the-Counter Industrial Manual.
Section 4
Representations, Warranties and Covenants of IMG
IMG represents and warrants to, and covenants with, the Shareholders and
iMall as follows:
4.1 Corporate Status. IMG is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah incorporated
on September 13, 1995. IMG has full corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business on all material respects as it is now
being conducted, and there is no jurisdiction in which the character and
location of the assets owned by it, or the nature of the business transacted
by it, requires qualification. Included in the IMG schedules (defined below)
are complete and correct copies of its Articles of Incorporation and Bylaws as
in effect on the date hereof. The execution and delivery of this Plan does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of IMG's Articles of Incorporation or Bylaws. IMG has
taken all action required by law, its Articles of Incorporation, its Bylaws,
or otherwise, to authorize the execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of IMG as of the date
hereof consists of 50,000,000 common shares, par value $0.001. As of the date
hereof all common shares of IMG issued and outstanding are fully paid, non-
assessable shares. There are no outstanding options, warrants, or calls or
any understanding, agreements, commitments, contracts or promises with respect
to the issuance of IMG's common stock or with regard to any options, warrants
or other contractual rights to acquire any of IMG's authorized but unissued
common shares.
4.3 Subsidiaries. IMG has no subsidiaries.
4.4 Conduct of Business. IMG will use its best efforts to maintain and
preserve its business organization, employee relationships and goodwill
intact, and will not, without the prior written consent of iMall, enter into
any material commitments except in the ordinary course of business.
IMG agrees that IMG will conduct itself in the following manner pending
the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of IMG.
(b) Capitalization, etc. IMG will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
4.5 Options, Warrants and Rights. Although IMG intends to enact and put
into effect various management and employee benefit plans in the near future,
as of the date hereof, IMG has no options, warrants or stock appreciation
rights related to the authorized but unissued IMG common stock. There are no
existing options, warrants, calls, or commitments of any character relating to
the authorized and unissued IMG common stock, except options, warrants, calls,
or commitments, if any, to which IMG is not a party and by which it is not
bound.
4.6 Title to Property. IMG has good and marketable title to all of its
properties and assets, real and personal, proprietary or otherwise, as will be
reflected in the balance sheets of IMG, and the properties and assets of IMG
are subject to no mortgage, pledge, lien or encumbrance, unless as otherwise
disclosed in its financial statements.
4.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of IMG, threatened by or against or
effecting IMG at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
IMG does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, warrant, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
4.8 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, IMG and its present management will (i) give to the
Shareholders and IMG, or their duly authorized representatives, full access,
during normal business hours, to all of its books, records, contracts and
other corporate documents and properties so that the Shareholders and IMG, or
their duly authorized representatives, may inspect them; and (ii) furnish such
information concerning the properties and affairs of IMG as the Shareholders
and IMG, or their duly authorized representatives, may reasonably request.
Any such request to inspect IMG's books shall be directed to IMG's
representative, at the address set forth herein under Section 10.4 Notices.
4.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), IMG and its representatives will keep confidential any information
which they obtain from the Shareholders or from IMG concerning its properties,
assets and the proposed business operations of IMG. If the terms and
conditions of this Plan imposed on the parties hereto are not consummated on
or before 5:00 p.m. MST on May 1, 1996 or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, IMG will return to
iMall all written matter with regard to iMall obtained in connection with the
negotiations or consummation of this Plan.
4.10 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of iMall to
be delivered to them under this Plan for investment purposes and not with a
view to the subsequent sale or distribution thereof, and as agreed, supra, the
Shareholders, their successors and assigns agree to execute and deliver to
iMall on the date of Closing or no later than the date on which the restricted
shares are issued and delivered to the Shareholders, their assigns, or
designees, an Investment Letter similar in form to that attached hereto as
Exhibit B.
4.11 Unregistered Shares and Access to Information. IMG and the
Shareholders understand that the offer and sale of iMall post-split shares to
be exchanged for the IMG shares have not been registered with or reviewed by
the securities and Exchange Commission under the Securities Act of 1933, as
amended, or with or by any state securities law administrator, and no federal
or state securities law administrator has reviewed or approved any disclosure
or other material facts concerning iMall or iMall post-split stock. IMG and
the Shareholders have been provided with and reviewed all information
concerning iMall and iMall post-split shares, to be exchanged for the IMG
shares as they have considered necessary or appropriate as prudent and
knowledgeable investors to enable them to make informed investment decisions
concerning the iMall post-split shares, to be exchanged for the IMG shares.
IMG and the Shareholders have made an investigation as to the merits and risks
of their acquisition of the iMall post-split shares, to be exchanged for the
IMG shares and have had the opportunity to ask questions of, and have received
satisfactory answers from, the officers and directors of iMall concerning
iMall post-split shares to be exchanged for the IMG shares and related
matters, and have had an opportunity to obtain additional information
necessary to verify the accuracy of such information and to evaluate the
merits and risks of the proposed acquisition of the iMall post-split shares to
be exchanged for the IMG shares.
4.12 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of IMG of whatever class or series, which the
Shareholders have contracted to exchange.
4.13 Contracts.
(a) Set forth in the IMG Schedules are copies or descriptions of
all material contracts which written or oral, all agreements, franchises,
licenses, or other commitments to which IMG is a party or by which IMG or its
properties are bound.
(b) Except as may be set forth in the IMG Schedules, IMG is not a
party to any contract, agreement, corporate restriction, or subject to any
judgment, order, writ, injunction, decree, or award, which materially and
adversely effect the business, operations, properties, assets, or conditions
of IMG.
(c) Except as set forth in the IMG Schedules, IMG is not a party to
any material oral or written (i) contract for employment of any officer which
is not terminable on 30 days (or less) notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance, or any other retirement plan
of arrangement covered by Title IV of the Employee Retirement Income Security
Act, as amended, or otherwise covered; (iii) agreement providing for the sale,
assignment or transfer of any of its rights, assets or properties, whether
tangible or intangible, except sales of its property in the ordinary course of
business with a value of less than $2,000; or (iv) waiver of any right of any
value which in the aggregate is extraordinary or material concerning the
assets or properties scheduled by IMG, except for adequate value and pursuant
to contract. IMG has not entered into any material transaction which is not
listed in the IMG Schedules or reflected in the IMG financial statements.
4.14 Material Contract Defaults. IMG is not in default in any material
respect under the terms of any contract, agreement, lease or other commitment
which is material to the business, operations, properties or assets, or
condition of IMG, and there is no event of default or event which, with notice
of lapse of time or both, would constitute a default in any material respect
under any such contract, agreement, lease, or other commitment in respect of
which IMG has not taken adequate steps to prevent such default from occurring,
or otherwise compromised, reached a satisfaction of, or provided for
extensions of time in which to perform under any one or more contract
obligations, among others.
4.15 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or material
agreement or instrument to which IMG was or is a party, or to which any of its
assets or operations are subject, and will not conflict with any provision of
the Articles of Incorporation or Bylaws of IMG.
4.16 Governmental Authorizations. IMG has all licenses, franchises,
permits and other government authorizations that are legally required to
enable it to conduct its business in all material respects as conducted on the
date hereof. Except for compliance with federal and state securities laws, no
authorization, approval, consent or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection
with the execution and delivery by IMG of this Plan and the consummation by
IMG of the transactions contemplated hereby.
4.17 Compliance with Laws and Regulations. IMG has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of IMG or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to iMall.
4.18 Approval of Plan. The Board of Directors of IMG have authorized
the execution and delivery of this Plan by IMG and have approved the Plan and
the transactions contemplated hereby. IMG has full power, authority, and
legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
4.19 Information. The information concerning IMG set forth in this
Plan, and the IMG Schedules attached hereto, are complete and accurate in all
material respects and do not contain, or will not contain, when delivered, any
untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to iMall in connection with this Plan.
4.20 IMG Schedules. IMG has delivered to iMall the following items
listed below, hereafter referred to as the "IMG Schedules", which is hereby
incorporated by reference and made a part hereof. A certification executed by
a duly authorized officer of IMG on or about the date within the Plan is
executed to certify that the IMG Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Resolution of Board of Directors approving Plan;
(c) Consent of Shareholders approving Plan;
(d) Schedule of every debt, mortgage, security interest, pledge,
lien, encumbrance, or claim, of any nature whatsoever, in excess of $1,000;
(e) A list of all employees, including current compensation,
with notation as to job description and whether or not such employee is
subject to written contract, and if subject to a contract or employment
agreement, a copy of the same;
(f) A schedule showing the name and location of each bank or
other institution with which IMG has an account and the names of the
authorized persons to draw thereon or having access thereto;
(g) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(h) Officer's Certificate as required by Section 7.2 of the
Plan;
(i) Certificate of Good Standing.
Section 5
Special Covenants
5.1 IMG Information Incorporated in iMall's Reports. IMG represents and
warrants to iMall that all the information furnished under this Plan shall be
true and correct in all material respects and that there is no omission of any
material fact required to make the information stated not misleading. IMG
agrees to indemnify and hold iMall harmless, including each of its Directors
and Officers, a and each person, if any, who controls such party, under any
applicable law from and against any and all losses, claims, damages, expenses
or liabilities to which any of them may become subject under applicable law,
or reimburse them for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such actions, whether or not
resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of or are based on any untrue statement,
alleged untrue statement, or omission of a material fact contained in such
information delivered hereunder.
5.2 Special Covenants and Representations Regarding the Exchanged iMall
Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the iMall shares in exchange for all
of the issued and outstanding shares of IMG to the Shareholders constitutes
the offer and sale of securities under the Securities Act and the applicable
state statutes, which depend, inter alia, on the circumstances under which the
Shareholders acquire such securities. iMall intends to rely on the exemption
of the registration provision of Section 5 of the Securities Act as provided
for under Section 4.2 of the Securities Act of 1933, which states
"transactions not involving a public offering", among others. Each
Shareholder upon submission of his IMG shares and the receipt of the iMall
post-split shares exchanged therefor, shall execute and deliver to iMall a
letter of investment invent to indicate, among other representations, that the
Shareholder is exchanging the IMG shares for iMall post-split shares for
investment purposes and not with a view to the subsequent distribution
thereof. A proposed Investment Letter is attached hereto as Exhibit B and
incorporated herein by reference for the general use by the Shareholders, as
they may determine.
5.3 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financials,
(a) IMG and iMall will (i) perform all of its obligations under
material contracts, leases, insurance policies and/or documents relating to
its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all material respects all duties and
obligations imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither IMG nor iMall will (i) make any change in its Articles
of Incorporation or Bylaws except and unless as contemplated pursuant to
Section 3 of this Plan; (ii) enter into or amend any contract, agreement, or
other instrument of the types described in the parties' schedules, except that
a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $10,000.
Section 6
Conditions Precedent to Obligations of
IMG and the Shareholders
All obligations of IMG and the Shareholders under this Plan are subject
to the satisfaction, on or before the Closing date, except as otherwise
provided for herein, or waived or extended in writing by the parties hereto,
of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by iMall in this Plan were true when made and shall be true as of the
Closing date (except for changes therein permitted by this Plan) with the same
force and effect as if such representations and warranties were made at and as
of the Closing date; and, iMall shall have performed and complied with by
iMall prior to the Closing, unless waived or extended in writing by the
parties hereto. IMG shall have been furnished with a certificate, signed by a
duly authorized executive officer of iMall and dated the Closing date, to the
foregoing effect.
6.2 Officers' Certificate. IMG and the Shareholders shall have been
furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of iMall, to the effect that no litigation,
proceeding, investigation, or inquiry is pending, or to the best knowledge of
iMall, threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of iMall.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of iMall, nor shall any event have occurred which, with lapse of
time or the giving of notice or both, may cause or create any material adverse
change in the financial condition, business or operations of iMall, except as
otherwise disclosed to IMG.
6.4 Opinion of Counsel of iMall. iMall shall furnish to IMG and the
Shareholders an opinion dated as of the Closing date and in form and substance
satisfactory to IMG and the Shareholders to the effect that:
(a) iMall is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada, and with all requisite
corporate power to perform its obligations under this Plan.
(b) The business of iMall, as presently conducted, including, upon
the consummation hereof, the ownership of all of the issued and outstanding
shares of IMG, does not require it to register it to do business as a foreign
corporation on any jurisdiction other than under the jurisdiction of its
Articles of Incorporation or Bylaws and iMall has complied to the best of its
knowledge in all material respects with all the laws, regulations, licensing
requirements and orders applicable to its business activities and has filed
with the proper authorities, including the Department of Commerce, Division of
Corporations, and Secretary of State for the State of Nevada, all statements
and reports required to be filed.
(c) The authorized and outstanding capital stock of iMall as set
forth in Section 3.2 above, and all issued and outstanding shares have been
duly and validly authorized and issued and are fully paid and non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against iMall of any court or before or by any
governmental body which might materially effect the business of iMall or the
financial condition of iMall as a whole and no such claims, suits or legal
proceedings are contemplated by governmental authorities against iMall.
(e) iMall's initial public offering file declared effective by the
Utah Securities Commission on May 7, 1985, and was offered and sold in
accordance with and in compliance with the rules and regulations of the
Securities Act of 1933, as amended. Subsequent to the termination of iMall's
public offering, no stop orders suspending the effectiveness of the
distribution is or was in effect, and no proceedings since the termination
thereof for that purpose are pending before or threatened by any state or
federal agency or authority.
(f) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of iMall, or any
contract, agreement, indenture, mortgage, or order by which iMall is bound.
(g) This Plan constitutes a legal, valid and binding obligation of
iMall enforceable in accordance with its terms, subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium, or similar law effecting
creditors' rights generally and general principles of equity (regardless of
whether such principles are considered in a proceeding in equity or law).
(h) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been ratified by a majority of the
Shareholders of iMall and have been duly authorized by its Board of Directors.
6.5 Good Standing. IMG shall have received a Certificate of Good
Standing from the State of Nevada, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that iMall is in good standing as a corporation in the State
of Nevada..
6.6 Other Items. IMG and the Shareholders shall have received such
further documents, certifications or instruments relating to the transactions
contemplated hereby as IMG and the Shareholders may reasonably request.
Section 7
Conditions Precedent to Obligations of iMall
All obligations of iMall under this Plan are subject, at its option, to
the fulfillment, before the Closing, of each of the following conditions:
7.1 Accuracy of Representations. The representations and warranties
made by IMG and the Shareholders under this Plan were true when made and shall
be true as of the Closing date (except for changes therein permitted by this
Plan) with the same force and effect as if such representations and warranties
were made at and as of the Closing date; and, iMall shall have performed and
complied with by IMG prior to the Closing, unless waived or extended in
writing by the parties hereto. iMall shall have been furnished with a
certificate, signed by a duly authorized executive officer of IMG and dated
the Closing date, to the foregoing effect.
7.2 Officers' Certificate. iMall shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of IMG, to the effect that no litigation, proceeding, investigation,
or inquiry is pending, or to the best knowledge of IMG, threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Plan, or which might result in any material
adverse change in the assets, properties, business, or operations of IMG.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the final condition, business
or operations of iMall, nor shall any event have occurred which, with lapse of
time or the giving of notice or both, may cause or create any material adverse
change in the financial condition, business or operations of IMG, except as
otherwise disclosed to iMall.
7.4 Good Standing. iMall shall have received a Certificate of Good
Standing from the State of Utah, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that IMG is in good standing as a corporation in the State
of Utah.
7.5 Dissenters' Rights Waived. The Shareholders of IMG, and each of
them, have agreed and hereby waive any dissenters' rights, if any, under the
laws of the State of Utah in regards to any objection to this Plan as outlined
herein and otherwise consent to and agree and authorize the execution and
consummation of the within Plan in accordance to the terms and conditions of
this Plan by the management of IMG.
7.6 Other Items. iMall shall have received such further documents,
certifications or instruments relating to the transactions contemplated hereby
as iMall may reasonably request.
7.7 Registration of IMG Shares. In connection with the exchange of
iMall shares for IMG shares, iMall agrees, if practicable, and subject to the
consent of an underwriter(s) in the event iMall undertakes to file a
Registration Statement under the Securities Act of 1933, as amended, for the
purpose of raising money from the public through the sale of its equity, to
ensure that the iMall shares issued in connection with the within Plan will be
included as part of a general Registration Statement and "piggy back" any such
offering for the purpose of registering the same for sale by the Shareholders,
as they may determine.
7.8 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit B to iMall.
Section 8
Termination
8.1 Termination by IMG or the Shareholders. This Plan may be terminated
at any time prior to the Closing date by action of IMG or the Shareholders, if
iMall shall fail to comply in any material respect with any of the covenants
or agreements contained in this Plan, or if any of its representations and
warranties contained herein shall be inaccurate in any material respect.
8.2 Termination by iMall. This Plan may be terminated at any time prior
to the Closing date by action of iMall if IMG shall fail to comply in any
material respect with any of the covenants or agreements contained in this
Plan, or if any of its representations or warranties contained herein shall be
inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of iMall, expressed by action of its Board of
Directors, IMG or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Xxxxxxxx
Xxxxxxx as their agent and attorney in fact (the "Shareholders'
Representative") with full power and authority until the Closing to execute,
deliver and receive on their behalf all notices, requests and other
communications hereunder; to fix and alter on their behalf the date, time and
place of the Closing; to waive, amend or modify any provisions of this Plan
and to take such other action on their behalf in connection with this Plan,
the Closing and the transactions contemplated hereby as such agent deems
appropriate; provided, however, that no such waiver, amendment or modification
may be made if it would decrease the number of shares to be issued to the
Shareholders under Section 1 hereof or increase the extent of their obligation
to iMall hereunder, unless agreed in writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of the Plan.
10.2 Payments of Estimated Costs and Fees. iMall and IMG mutually
determine and agree that IMG shall pay the estimated costs and fees incurred
in connection with the execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, IMG and the Shareholders shall
cause to have promptly prepared and disseminated a news release concerning the
execution and consummation of the Plan, such press release and communication
to be released promptly and within the time required by the laws, rules and
regulations as promulgated by the United States Securities and Exchange
Commission, and concomitant therewith to cause to be prepared a full and
complete letter to iMall's shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to iMall: iMall, Inc.
0000 Xxxxx Xxxx Xxxxx Xxxxxx
Xxxxx, Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx #0000
Xxxx Xxxx Xxxx, Xxxx 00000
If to IMG: Inter-Active Marketing Group, Inc.
000 Xxxx 0000 Xxxxx, #000
Xxxxx, Xxxx 00000
If to the Shareholders: Xxxxxxxx Xxxxxxx
000 Xxxx 0000 Xxxxx, #000
Xxxxx, Xxxx 00000
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between iMall, IMG
and the Shareholders with respect to the subject matter hereof, all of which
are hereby merged into this Plan, which alone fully and completely expresses
the agreement of the parties relating to the subject matter hereof. Excepting
the foregoing agreement, there are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Utah, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended. IMG
and iMall acknowledge, however, that each are being represented by their own
tax advisors in connection with this transaction, and neither has made any
representations or warranties to the other with respect to treatment of such
transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
iMall, INC.
Attest:
/s/ Xxxx Xxxxxxx By /s/ Xxxxx Xxxxxxxxx
---------------------- ---------------------
Its President
INTER-ACTIVE MARKETING GROUP, INC.
Attest:
/s/ Xxxx Xxxxxxx
____________________ By /s/ Xxxxxxxx Xxxxxxx
-------------------------
Its President
SHAREHOLDERS:
Attest:
/s/ Xxxx Xxxxxxx By /s/ Xxxx Xxxxxxx
-------------------- -----------------------
Attest:
/s/ Xxxx Xxxxxxx By: /s/ Xxxxxxxx Xxxxxxx
_____________________ ______________________________________________
Attest:
/s/ Xxxx Xxxxxxx By /s/ Xxxxx Xxxxxxx
_____________________ ______________________________________________
Attest:
_____________________ By_________________________________________________
