ACQUISITION AGREEMENT
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THIS ACQUISITION AGREEMENT is entered into as of this 15th day of June,
2001, by and among Luminart Corp, a Nevada corporation ("Acquiror"); Rush Street
Media, Inc., an Illinois corporation ("RSMI" or the "Company"); and the persons
listed on Schedule A as the shareholders of RSMI (the "Shareholders" and each a
"Shareholder").
W I T N E S S E T H :
- - - - - - - - - -
Whereas the parties hereto desire that the Acquiror shall acquire all
of the 1,000,000 issued and outstanding shares of RSMI in exchange for 3,750,000
shares of Acquiror common stock on the basis of three and three quarters (3.75)
shares of Acquiror for each share of RSMI;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and conditions hereinafter set forth, the parties hereto, intending to
be legally bound, hereby agree as follows:
1. Transfer of RSMI Common to Acquiror.
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Subject to and upon the terms and conditions hereof, on the
Closing Date (as defined below) the Acquiror shall acquire from the Shareholders
100% of the issued and outstanding RSMI Common (1,000,000 shares).
2. Consideration for the Transfer of the RSMI Common.
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In consideration for the transfer to the Acquiror of all of
the shares of RSMI Common, the Acquiror shall issue to the Shareholders
tendering their RSMI shares at the closing, an aggregate of 3,750,000 restricted
shares of Acquiror Common on the basis of three and three quarters (3.75)
Acquiror Shares for each RSMI share. Unless otherwise specifically indicated
hereinafter the Acquiror common shares referred to throughout this Agreement
refer to restricted Acquiror common shares, which shares shall represent (at
least17.3%) of all issued and outstanding shares of Acquiror Common Stock when
taking into consideration the fact that (i) 21,616,167 shares of Acquiror Common
Stock are currently issued and outstanding on a fully diluted basis (inclusive
of options to purchase 2,110,000 shares; (ii) the Acquiror will issue 500,000
shares to RSMI's
treasury to be used at RSMI's discretion as set forth herein (iii) Acquiror has
issued Notes in the aggregate amount of $130,000 which may be converted at the
holder's option to 2,000,000 shares. No other convertible securities,
convertible notes, rights or warrants are issued or outstanding. Acquiror has
also issued and outstanding $685,000 of Class A Preferred Convertible Stock
bearing an annual interest rate of 7% which was issued in 1997 and is fully
convertible beginning in 2002. Acquiror has no other class of capital stock
outstanding and, except as set forth above, has issued no warrants or options to
purchase its capital stock.
3. Acquiror's Commitment to RSMI. Acquiror covenants and agrees
that, in addition to the 3,750,000 shares being issued to the RSMI shareholders,
upon the closing hereunder it will issue an aggregate of 500,000 of its shares
to RSMI, to be utilized by RSMI management for such acquisitions or other
purposes as management of RSMI, in its sole discretion, may determine. Acquiror
will, if requested to do so by RSMI, effect a registration under the Securities
Act of 1933, as amended (the "1933 Act") for all or part of the 500,000 shares
provided that such is required to effect a transaction contemplated by this
section, provided that such registration can be effected on Forms S-3 or S-8 and
grant piggyback rights with respect to such shares for all registrations except
registrations on Form S-4 and where an underwriter has stated in writing that
such inclusion would be detrimental to the offering as a whole.. Acquiror shall
not have any day to day responsibilities for the operations or the cash
requirements of RSMI which shall be operated on a stand alone basis after the
closing hereunder. Post Closing and for a period of at least five years
thereafter, RSMI's board of directors shall consist of Xxxxxxx Xxxxxxxx, Xxxxx
Xxxxxxx Xxxxxxxx and any persons jointly designated by such persons.
4. Transfer and Exchange of Shares.
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(a) It is the intention of the parties hereto that the
consummation of the transactions contemplated herein, upon the terms and
conditions set forth in this Agreement, shall result in the acquisition of RSMI
by the Acquiror, in exchange solely for an aggregate of 3,750,000 shares of its
voting common stock (its only current issued and outstanding class of stock),
for 100% of the RSMI stock such that Acquiror will (a) have "control" (within
the meaning of Section 368(c) of the Internal Revenue Code of 1986, as amended
(the "Code")) of RSMI after the consummation of the transactions contemplated
hereby and that such transactions will constitute a "reorganization"
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within the meaning of Section 368(a)(1)(B) of the Code and/or (b) that RSMI
shall become a wholly owned operating subsidiary of Acquiror (immediately
subsequent to the conclusion of the acquisition).
(b) Restrictive Legend on Acquiror Common. Upon Closing the
Shareholders shall transfer the RSMI Common to Acquiror solely in exchange for
an aggregate of 3,750,000 shares of restricted, non-registered Acquiror Common,
which are voting shares, pursuant to the terms and provisions hereof.
Certificates evidencing such shares of Acquiror Common shall bear the following
restrictive legend:
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold,
transferred, pledged, hypothecated, or otherwise disposed of in the
absence of (i) an effective registration statement for such securities
under such act or (ii) an opinion of company counsel that such
registration is not required.
5. Representations and Warranties of RSMI. RSMI makes the
following representations and warranties to Acquiror, each of which is true and
correct on the date hereof and shall be true and correct at Closing:
(a) Due Incorporation, Good Standing and Qualification. RSMI
is a corporation duly organized, validly existing and in good standing under the
laws of Illinois, with all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as it is now being
conducted.
(b) Corporate Authority. RSMI has the full corporate power
and authority to enter into this Agreement and to carry out the transactions
contemplated by this Agreement. The Board of Directors of RSMI has unanimously
and duly authorized the execution, delivery and performance of this Agreement.
(c) Capital Structure.
(i) RSMI is authorized to issue 1,000,000 shares of
Common Stock, without par value, which are voting shares, all of which 1,000,000
shares are validly issued and outstanding, fully paid and non-assessable as of
the date hereof, and none of which shares, to RSMI's knowledge, have any liens
and/or encumbrances against them. Schedule A hereto accurately sets forth the
name, address, social security or taxpayer identification number of each
shareholder of RSMI.
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(ii) There are no options, warrants, rights,
stockholder agreements or other agreements or instruments outstanding giving any
person the right to acquire any shares of RSMI Common and there are no
commitments to issue any options, warrants or rights to acquire shares of RSMI
Common.
(d) Subsidiaries. Except as set forth on a schedule hereto,
RSMI has no subsidiaries. As the context requires, each reference to RSMI shall
be deemed to include a reference to RSMI and its subsidiaries as identified on
such schedule.
(e) Litigation. Except as previously disclosed and set forth
on a schedule annexed hereto, there are no pending or to the best of RSMI's
knowledge threatened suits, legal proceedings, claims or governmental
investigations of any kind against or with respect to RSMI, the Shareholders
and/or RSMI's assets or any basis for any such suit, legal proceeding, claim or
governmental investigation.
(f) Taxes. RSMI has filed all applicable tax returns
required to be filed to date in accordance with the provisions of law pertaining
thereto, and has paid all taxes, interest, penalties and assessments (including,
without limitation, income, withholding, excise, unemployment, Social Security,
occupation, transfer, franchise, property, sales and use taxes, and all
penalties and interest in respect thereof) required to have been paid to date.
(g) Governmental Consent. To the best of RSMI's knowledge,
no permit, consent, approval or authorization of, or filing with, any
governmental regulatory authority or agency is required of RSMI in connection
with the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
(h) Compliance with Laws. To the best of its knowledge RSMI
is in compliance with all material applicable existing requirements of laws,
foreign, federal, state and local, and all existing applicable material
requirements of governmental bodies or agencies having jurisdiction over it and
to the best of its knowledge has all necessary licenses (foreign, federal, state
and/or local) required of it in order to conduct its current business
activities.
(i) Financial Statements. (a) The financial statements of
RSMI, as of December 31, 2000 (the "Financial Statements") previously delivered
to Acquiror and attached hereto as an Exhibit, have been internally generated by
RSMI. To the best of RSMI's knowledge, the Financial
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Statements have been prepared in accordance with generally accepted accounting
principles, are correct and complete in all material respects and fairly and
accurately present the financial condition of RSMI as of the dates and for the
periods stated therein. The financial statements of RSMI as of May 31, 2001 (the
"Interim Financial Statements") previously delivered to Acquiror and attached
hereto as an Exhibit. To the best of RSMI's knowledge, the Financial Statements
and the Interim Financial Statements have each been prepared in accordance with
generally accepted accounting principles, are correct and complete in all
material respects and fairly and accurately present the financial condition of
RSMI as of the dates and for the periods stated therein. RSMI has no material
liabilities or obligations of a type which would be included in a balance sheet
prepared in accordance with generally accepted accounting principles, except as
and to the extent disclosed on the Financial Statements or Interim Financial
Statements delivered hereunder. The words "Financial Statements" and "Interim
Financial Statements" as same appear throughout this Acquisition Agreement refer
to both the Financial Statements and the Interim Financial Statements as well as
all Notes to the Financial Statements and the Interim Financial Statements in
their entirety (unless otherwise specifically indicated). RSMI has no reason to
believe that Acquiror will not be able to prepare audited financial statements
of RSMI to enable Acquiror to timely prepare and file such reports as may in the
future be required of it as a company subject to the reporting requirements of
Section 12(g) of the Securities Exchange Act of 1934, as amended (the "1934
Act").
(j) Conflict With Documents. Neither the execution, delivery
and performance of this Agreement by RSMI, nor the consummation of the
transactions contemplated hereby, either immediately or with the passage of time
or the giving of notice or both will:
(i) conflict with or cause a breach or default under
any of the terms and conditions of, or result in a termination or modification
of, or cause any acceleration of any material obligations of RSMI under any
contract, lease or other instrument to which RSMI is bound; or
(ii) conflict with any material provisions of RSMI's
Certificate of Incorporation, By-laws or any other laws or regulations by which
RSMI is bound; or
(iii) result in the creation or imposition of any
liens, charge or encumbrance against RSMI or any of its assets.
(k) Absence of Material Changes. Except as specifically set
forth herein or in any
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Exhibit hereto or in RSMI's Financial Statements or the Interim Financial
Statements, since the date of the Interim Financial Statements:
(i) there has not been any change materially
adversely affecting the financial condition of RSMI ;
(ii) RSMI has operated its business in the ordinary
course of business which includes the continual marketing efforts in accordance
with its business plan;
(iii) RSMI has maintained its books, accounts and
records in the usual, customary and ordinary manner;
(iv) RSMI has not knowingly waived any pre-existing
right of substantial value; and
(v) Except as set forth on a disclosure schedule
annexed hereto, RSMI has not borrowed any money.
(l) Statements and Other Documents Not Misleading. No
provision of this Agreement relating to RSMI or any other document, schedule or
other information furnished by RSMI to Acquiror in connection with the
execution, delivery and performance of this Agreement, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated in order to make the statement, in light of
the circumstances in which it is made, not misleading.
(m) Acknowledgment of Awareness of RSMI of Acquiror
Intention to Engage in a Public Offering. RSMI acknowledges being advised by
Acquiror that:
(i) Acquiror has registered its common stock under
the 1934 Act and is a reporting company under Section 12(g) of the 1934 Act and
thereby to become subject to reporting requirements under Section 13 or 15(d) of
the 1934 Act.
(ii) In order for Acquiror to comply with the
reporting requirements of the 1934 Act RSMI shall be required to furnish to
Acquiror such information concerning RSMI as may be required by applicable laws,
rules and regulations, including but not limited to audited financial statements
of RSMI for at least its last two fiscal years (or such period of time as may be
necessary) and unaudited financial statements for any interim periods as may be
required.
(n) Cooperation. RSMI will fully cooperate in the
completion of the transactions
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contemplated by this Agreement, including, but not limited to, the relevant
Securities and Exchange Commission filings.
(o) Contracts and Insurance. Annexed hereto is a schedule of
all written agreements for employment, agreements involving commitments in
excess of 90 days and all licence agreements entered into by RSMI, copies of all
of which have previously been delivered to Acquiror. Annexed hereto is a
schedule of all policies of insurance related to RSMI's business, all of which
are in full force and effect and copies of which have previously been delivered
to Acquiror.
6. Title to the Shares. Each of the Shareholders represents and
warrants to Acquiror that he or she has good and marketable title to the RSMI
Common delivered by him or her to Acquiror, free and clear of any liens,
pledges, claims and encumbrances (other than restriction on transfer as a result
of securities laws), and each has the right to sell, transfer and assign the
foregoing to Acquiror.
7. Representations and Warranties of Acquiror. Acquiror makes the
following representations and warranties to RSMI and to the Shareholders each of
which is true and correct on the date hereof and shall be true and correct at
Closing.
(a) Due Incorporation, Good Standing and Qualification.
Acquiror is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada, with all requisite corporate power and
authority to own, operate and lease its assets and to carry on its business (if
any) as it is now being conducted. Acquiror business is as described in its Form
10SB, as amended, and other filings under the 1934 Act.
(b) Corporate Authority. Acquiror has the full corporate
power and authority to enter into, execute and deliver this Agreement.
(c) Capital Structure.
(i) As of the date hereof, Acquiror has authorized
100,000,000 shares of common stock, par value $.0001 per share, 17,006,167 of
which are issued and outstanding, fully paid and non-assessable plus (ii)
options issued to corporate officers and directors to purchase 2,110,000 shares
of common stock; (iii) Notes in the aggregate amount of $130,000 which may be
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converted at the holder's option to 2,000,000 shares of Acquiror's common stock;
and (iv) Acquiror has authorized $1,000,000 shares of preferred stock, of which
$685,000 of Class A Preferred Convertible Stock are issued and outstanding,
bearing an annual interest rate of seven percent (7%), issue din 1997 and fully
convertible in shares of common stock commencing in 202. Except as described
herein, there are no other securities issued and outstanding of the Acquiror.
(ii) There are no pre-emptive rights, options,
warrants, or other rights, stockholder agreements or other agreements or
instruments outstanding giving any person the right to acquire any securities of
Acquiror, nor are there any commitments to issue any options, warrants or rights
to acquire securities of Acquiror or any obligation to issue any other form of
securities or notes of Acquiror to anyone nor have any dividends been declared
by Acquiror or shares of Acquiror set aside for such purposes.
(d) Status of Acquiror Common Stock to be Issued. The shares
of Acquiror Common to be issued pursuant to this Agreement shall be, when
issued, duly and validly authorized and issued, fully paid and non-assessable
and each of such shares shall bear the restrictive legend as heretofore
indicated in elsewhere in this Agreement and the record and beneficial owner of
such shares shall receive good and marketable title to such shares free and
clear of any liens and/or encumbrances.
(e) Subsidiaries. The Acquiror has no Subsidiaries.
(f) Litigation. There are not now nor have there been since
the inception of Acquiror any pending or to the best of its knowledge threatened
suits, legal proceedings, claims or governmental investigations against or with
respect to Acquiror or its assets or to the best of its knowledge any basis for
any such suits, legal proceedings, claims or governmental investigations.
(g) Conflict With Documents. Neither the execution, delivery
and performance of this Agreement by Acquiror nor the consummation of the
transactions contemplated hereby, either immediately or with the passage of time
or the giving of notice or both will:
(i) Conflict with or cause a breach or default under
any of the terms and conditions of, or result in a termination or modification
of, or cause any acceleration of any obligations of Acquiror under any contract,
lease or other instrument to which Acquiror is bound; or
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(ii) Conflict with or violate the provisions of
Acquiror's Certificate of Incorporation, as and if amended, and By-laws or any
other laws or regulations by which Acquiror is bound; or
(iii) Result in the creation or imposition of any lien,
charge or encumbrance against Acquiror or any of its assets.
(h) Taxes. Acquiror has filed (or will promptly file) all
applicable Federal, state, local and foreign tax returns required to be filed to
date in accordance with the provisions of law pertaining thereto and has paid
(or will promptly pay) all taxes, interest, penalties and assessments (including
without limitation, income, withholding, excise, unemployment, social security,
occupation, transfer, franchise, property, sales and use taxes, and all
penalties and interest in respect thereof) required to have been paid to date;
and all taxes of all types have been accrued on the Acquiror's books or paid as
the case may be.
(i) Acquiror Financial Statements.
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(i) Acquiror Financial Statements. (a) The financial
statements of Acquiror, as of September 30, 2000 (the "Acquiror Financial
Statements") to be delivered to RSMI and attached hereto as an Exhibit, have
been audited by Xxxxxx & Xxxx, C.P.A.'s ("Xxxxxx") and included their report
thereon. To the best of Acquiror's knowledge, the Acquiror Financial Statements
have been prepared in accordance with generally accepted accounting principles,
are correct and complete in all material respects and fairly and accurately
present the Acquiror Financial condition of Acquiror as of the dates and for the
periods stated therein. The financial statements of Acquiror as of March 31,2001
(the "Interim Acquiror Financial Statements") previously delivered to Acquiror
and attached hereto as an Exhibit, will be reviewed by Xxxxxx. To the best of
Acquiror's knowledge, the Acquiror Financial Statements and the Interim Acquiror
Financial Statements have each been prepared in accordance with generally
accepted accounting principles, are correct and complete in all material
respects and fairly and accurately present the financial condition of Acquiror
as of the dates and for the periods stated therein. Acquiror has no material
liabilities or obligations of a type which would be included in a balance sheet
prepared in accordance with generally accepted accounting principles, except as
and to the extent disclosed on the Acquiror Financial Statements
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or Interim Acquiror Financial Statements delivered hereunder. The words
"Acquiror Financial Statements" and "Interim Acquiror Financial Statements" as
same appear throughout this Acquisition Agreement refer to both the Acquiror
Financial Statements and the Interim Acquiror Financial Statements as well as
all Notes to the Acquiror Financial Statements and the Interim Acquiror
Financial Statements in their entirety (unless otherwise specifically
indicated). Acquiror has no reason to believe that Acquiror will not be able to
continue to prepare audited financial statements of Acquiror to enable Acquiror
to timely prepare and file such reports as may in the future be required of it
as a company subject to the reporting requirements of Section 12(g) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") or that such
financial information can not be prepared with respect to Acquiror as would be
required for inclusion in a registration statement under the Securities Act of
1933, as amended (the 1933 Act") on Form SB-2.
(j) Conflict With Documents. Neither the execution, delivery
and performance of this Agreement by Acquiror, nor the consummation of the
transactions contemplated hereby, either immediately or with the passage of time
or the giving of notice or both will:
(i) conflict with or cause a breach or default under
any of the terms and conditions of, or result in a termination or modification
of, or cause any acceleration of any material obligations of Acquiror under any
contract, lease or other instrument to which Acquiror is bound; or
(ii) conflict with any material provisions of
Acquiror's Certificate of Incorporation, By-laws or any other laws or
regulations by which Acquiror is bound; or
(iii) result in the creation or imposition of any
liens, charge or encumbrance against Acquiror or any of its assets.
(k) Absence of Material Changes. Except as specifically set
forth herein or in any Exhibit hereto or in Acquiror's Financial Statements or
the Interim Financial Statements, since the date of the auditing accountant's
letter (report) referred to in paragraph 6 (i) hereof:
(i) there has not been any change materially
adversely affecting the financial condition of Acquiror ;
(ii) Acquiror has operated its business in the
ordinary course of business which includes the continual marketing efforts in
accordance with its business plan;
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(iii) Acquiror has maintained its books, accounts and
records in the usual, customary and ordinary manner;
(iv) Acquiror has not knowingly waived any
pre-existing right of substantial value; and
(v) Except as set forth on a disclosure schedule
annexed hereto, Acquiror has not borrowed any money.
(l) Statements and Other Documents Not Misleading. No
provision of this Agreement relating to Acquiror or any other document, schedule
or other information furnished by Acquiror to Acquiror in connection with the
execution, delivery and performance of this Agreement, contains or will contain
any untrue statement of a material fact or omits or will omit to state a
material fact required to be stated in order to make the statement, in light of
the circumstances in which it is made, not misleading.
(m) Intellectual Property. Acquiror has good and marketable
title or royalty free world wide licenses to all patents and intellectual
property used by it in the operation of its business, including, without
limitation patents # 005512122A (US); #2,126,104 (Canada); #93922873.0 (Europe)
and #51735/93 (Australia) all as previously delivered to Acquiror and, to the
best of its knowledge, such patents and other intellectual property are
enforceable by Acquiror and do not infringe upon the intellectual property
rights held by others.
(p) Contracts and Insurance. Annexed hereto is a schedule of
all written agreements for employment, agreements involving commitments in
excess of 90 days and all licence agreements entered into by Acquiror, copies of
all of which have previously been delivered to Acquiror. Annexed hereto is a
schedule of all policies of insurance related to Acquiror's business, all of
which are in full force and effect and copies of which have previously been
delivered to Acquiror.
8. Mutual Covenants. The parties hereto agree to execute and
deliver all such other documents as any party and/or their respective counsel
may reasonably request in writing from the date hereof until Closing (and if
necessary subsequent to Closing) in order to effectuate the transactions
contemplated by this Agreement.
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9. Covenants of RSMI.
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(a). From the date hereof until the Closing Date, both RSMI
and the Shareholders shall use their best efforts to cause RSMI to:
(i) Conduct its business activities and affairs in
the ordinary course of business in accordance with its business plan as
previously delivered to Acquiror;
(ii) Use its best efforts to preserve its business
organization intact, to keep available the services of those current employees
that RSMI , in its discretion, feels should be retained and to preserve its
relationship with customers to the extent practicable and all others with whom
it deals similarly to the extent practicable and/or reasonable;
(iii) Properly give Acquiror notice of any material
adverse change in its financial condition, business or affairs;
(iv) Not mortgage, pledge, transfer or assign any of
its assets without written consent of the Acquiror.
(v) Maintain its books and records in a manner
consistent with past practices;
(vi) Not enter into any employment agreements without
the written consent of the Acquiror.
(vii) Make available for inspection all books and
records which Acquiror may reasonably request from time to time as Acquiror
deems necessary or appropriate to evaluate the business affairs and financial
condition of RSMI .
(viii) Furnish Acquiror with such information, financial
or otherwise, concerning RSMI , the Shareholders, officers and directors, as is
available to RSMI and as Acquiror may reasonably request.
(b) Notwithstanding anything to the contrary that may be
contained in paragraph 9(a) hereof, Acquiror acknowledges that RSMI has made no
representation whatsoever regarding its business activities other than as
contained herein and/or by Exhibits and/or Schedules annexed hereto including,
but not limited to its certified financial statements and notes thereto; RSMI
understanding that Acquiror is fully relying on the representations contained in
such documents and would not entertain the acquisition contemplated herein
absent such documents being wholly
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accurate and complete in all material respects.
10. Covenants of Acquiror. From the date hereof until the Closing
Date, Acquiror shall:
(a) Conduct its business activities and affairs in the
ordinary course of business, which shall mean that it shall conduct no activity
other than activities preparatory to the closing hereunder;
(b) Use its best efforts to preserve its business
organization intact;
(c) Properly and promptly give RSMI notice of any change in
its financial condition, business or affairs;
(d) Not mortgage, pledge, transfer or assign any of its
asset, nor dissolve, liquidate, cease to do business as a going concern or merge
with any other entity;
(e) Maintain its books and records in a manner consistent
with past practices;
(f) Not incur any liabilities or contingent liabilities; and
not enter into any agreements (except as may be indicated in this Acquisition
Agreement);
(g) Make available for inspection all books and records or
other information which RSMI or the Shareholders may reasonably request from
time to time as RSMI or the Shareholders deem necessary or appropriate to
evaluate the business, affairs and financial condition of Acquiror;
(h) Acquiror shall: (i) retain as confidential and not to
reveal to any others for any reason whatsoever all information furnished by RSMI
or at its request, concerning RSMI , its present and proposed business, its
financial condition, and its officers, directors and Shareholders; and (ii) not,
directly or indirectly, use any such information to compete in any way with any
present or presently contemplated business of RSMI excepting for all disclosure
as may be required by applicable federal, state and local laws as well as (but
by no means limited to) applicable SEC rules and regulations.
(j) Acquiror shall not issue any public statements, cause
any press releases to be issued or cause any mailings to its stockholders to be
made regarding any of the transactions contemplated herein without first
providing RSMI 's counsel with the proposed written statements or releases and
without first obtaining RSMI 's counsel's written consent regarding publication
of
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such statements, which consent shall not be unreasonably withheld.
10.1 Covenants of RSMI, Acquiror and Shareholders. From the date
hereof until the Closing, Acquiror shall:
(a) Not authorize nor make any change or amendment in their
respective Certificates of Incorporation, By-Laws, or any other document
governing either of them; excepting for such amendment to Acquiror's Certificate
of Incorporation as may be necessary to effectuate the transactions contemplated
herein.
(b) Not authorize or issue or in any way obligate either of
them to issue any of their respective securities or options or any other rights
to acquire any such securities.
10.2 Further Covenants of RSMI and Acquiror
(a) Acquiror, its principals and RSMI acknowledge and
understand that this Agreement indicates various intentions, which intentions if
consummated would result in (i) changes in control of the Acquiror, (ii)
acquisition of assets by Acquiror and (iii) the nomination and election to
Acquiror's Board of Directors of new directors as more fully set forth herein.
(b) The parties hereto further acknowledge that the
Agreement contains a significant number of material conditions precedent to the
consummation of the proposed transaction and indicates that if Acquiror's and
RSMI's intention to consummate the transaction materializes that Acquiror shall
issue a significant number of restricted shares of its Common Stock to RSMI 's
current Shareholders in exchange for all of RSMI 's then issued and outstanding
securities (so that RSMI will be a wholly owned subsidiary of Acquiror upon
consummation of the proposed transaction).
11. Continuation and Survival of Representations, Warranties and
Covenants. All representations, warranties and covenants made in this Agreement
shall continue to be true and correct at and as of the Closing Date and shall
survive the Closing and the consummation of the transactions contemplated by
this Agreement for two years from the closing date hereof unless otherwise
expressly provided herein.
12. Conditions Precedent to the Obligation of Acquiror. The
obligations of Acquiror
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under this Agreement are subject to the satisfaction of the following conditions
on or before the Closing Date:
(a) Accuracy of Representations and Warranties. The
representations and warranties of RSMI under paragraph 5 hereof, and
Shareholders under paragraph 6 hereof, herein contained shall have been true and
correct in all material respects when made, and, in addition, shall be true and
correct in all material respects on and as of the Closing Date with the same
force and effect as though made on the Closing Date.
(b) Performance of Agreements. RSMI and Shareholders shall
have in all material respects performed all obligations, agreements, covenants
and conditions contained in this Agreement to be performed and complied with by
them on or prior to the Closing Date.
(c) Corporate Approvals. All necessary corporate action on
the part of the directors and holders of RSMI common stock approving the
transactions contemplated by this Agreement shall have been taken.
(d) Satisfactory to Counsel. All proceedings taken by RSMI
and all instruments executed and delivered by RSMI on or prior to the Closing
Date in connection with the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to counsel for Acquiror.
(e) Absence of Prohibitions. No court order prohibiting the
acquisition by Acquiror of the RSMI Common set forth herein shall be in effect.
13. Conditions Precedent to the Obligations of RSMI and
Shareholders. The obligations of RSMI and Shareholders, under this Agreement are
subject to the satisfaction of the following conditions on or before the Closing
Date:
(a) Accuracy of Representations and Warranties. The
representations and warranties of Acquiror herein contained shall have been true
and correct in all respects when made, and, in addition, shall be true and
correct in all respects on and as of the Closing Date with the same force and
effect as though made on the Closing Date.
(b) Performance of Agreements. Acquiror shall have performed
all obligations and agreements and complied with all covenants and conditions
contained in this Agreement to be performed and complied with by it on or prior
to the Closing Date.
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(c) Corporate Approval. All necessary corporate action on
the part of the Board of Directors and shareholders of Acquiror approving the
transactions contemplated by this Agreement shall have been taken (including,
but not limited to the resignation of existing management, the election of New
Management and the execution of the consulting agreement referred to herein.
(d) Proceedings Satisfactory to Counsel. All proceedings
taken by Acquiror and all instruments executed and delivered by Acquiror on or
prior to the Closing Date in connection with the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to counsel for
RSMI .
(e) Directors and Officers. Acquiror shall have caused the
following persons to be elected as the directors and officers of Acquiror : (i)
Xxxxx Xxxxxxx Xxxxxxxx - President and Director; (ii)Wm. Xxxxxxx Xxxxxxxx - CEO,
Chairman of the Board (iii) Xxxxxx Xxxxx, Director; (iv) Xxxx Xxxxx, Director;
(v) Xxxxx X. Xxxxxxxx, Director (collectively "New Management").
(f) Filings Current. Acquiror shall have made all filings
required to be made by it under the 1934 Act and shall be "current" in its
filings as that term is used in 1933 Act Rule 144.
(g) No Obligations, etc. The Shareholders shall have
received documentation establishing to their reasonable satisfaction and that of
their counsel that Acquiror has no further obligations in respect of prior
dealings with anyone or any firm except as disclosed in its aforesaid financial
statements and/or as disclosed herein.
14. Deliveries to Acquiror on the Closing Date. On the Closing
Date, RSMI and Shareholders shall deliver to Acquiror the following:
(a) Two certificates (i) one of which is executed by the
President of RSMI confirming that the representations and warranties made
pursuant to paragraph 5 of this Agreement, and (ii) the second of which is
executed by Shareholders confirming that the representations and warranties made
pursuant to paragraph 6 of this Agreement, are true and correct in all material
respects when first made and on the Closing Date.
(b) Certified copies of resolutions duly adopted by the
Board of Directors of RSMI authorizing the execution, delivery and performance
of this Agreement, the consulting
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agreement, the election of New Management and the resignations of existing
management and the consummation of the transactions contemplated hereby.
(c) Good Standing Certificate and Tax Certificate or its
equivalent issued by the appropriate Secretary of State of Illinois authorities
and dated within a reasonable time of the Closing Date. Similar documents shall
be delivered for any Subsidiary.
(d) An Investment Letter executed by the Shareholders in the
form presented as an Exhibit attached hereto.
(e) Certificates for all issued and outstanding shares of
RSMI common stock, in form satisfactory for transfer (including the requisite
stock powers).
15. Deliveries to RSMI on the Closing Date. On the Closing Date,
Acquiror shall deliver to RSMI the following:
(a) Certificate executed by the President of Acquiror
confirming that the representations and warranties made pursuant to the
Agreement are true and correct when first made and on the Closing Date and
confirming compliance with the provisions of Section 13 hereof.
(b) Certified copies of resolutions duly adopted by the
Board of Directors of Acquiror authorizing the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby.
(c) Good Standing Certificate issued by the Secretary of
State of the State of Nevada and a no-tax lien certificate issued by the proper
agency of the State of Nevada, and dated within a reasonable time of the Closing
Date.
(d) Stock certificates evidencing ownership of Acquiror
Common registered in the names of the Shareholders pursuant to Section 2 hereof.
(e) Such resignations of the present officers and directors
of Acquiror as are required under this Agreement.
16. Closing. The parties hereto agree that the closing hereunder
("Closing") and the Closing Date hereunder shall be held on or before July 15,
2001, unless the parties shall otherwise unanimously agree in writing to either
an earlier or later date. In the event this transaction has not
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closed by such date as is indicated in this paragraph 16, it may be abandoned by
either party pursuant to paragraph 18 hereof.
17. Indemnification. Within the period provided in paragraph 11
hereof and in accordance with the terms thereof, each party to this Agreement,
jointly and severally, shall indemnify and hold harmless each other party to
whom a duty is owed hereunder by such party against and in respect to any
liability, damage or deficiency in all actions, suits, proceedings, demands,
assessments, judgments, cost and expenses, including attorneys' fees incident to
any of the foregoing, resulting from any misrepresentation, breach of covenant
or warranty or other non- fulfillment of any agreement on the part of any such
party under this Agreement or from any misrepresentations or omissions from any
document furnished or to be furnished to a party hereunder. After the Closing,
any indemnification obligation of RSMI shall be the obligation of the present
shareholders of RSMI. RSMI, its shareholders, and the Acquiror jointly and
severally, hereby (a) agree to the venue and jurisdiction of or in the state and
federal courts of Xxxx County Illinois in connection with any actions commenced
under this paragraph 17, and the enforcement of any settlements, orders, decrees
and judgments arising therefrom or related thereto, and (b) irrevocably appoint
the attorney who is listed as receiving a copy of the notices to it, to accept
and receive any and all notices, service, orders, decrees, summons, pleadings
and other documents relating thereto.
18. Waiver, Modification, Abandonment.
---------------------------------
(a) Waivers. The failure of Acquiror to comply with any of
its obligations, agreements or conditions as set forth herein may be waived
expressly in writing by RSMI , by action of its Board of Directors without the
requirement of a vote of holders of RSMI Common. The failure of RSMI and/or the
Shareholders to comply with any of their obligations, agreements or conditions
as set forth herein may be waived expressly in writing by Acquiror, by action of
its Board of Directors, without the requirement of a vote of Acquiror
shareholders.
(b) Modification. This Agreement may be modified (only in
writing) at any time in any respect by the unanimous consent of all of the
parties hereto.
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(c) Abandonment. The transactions contemplated by this
Agreement may be abandoned on or before the Closing Date, notwithstanding
approval of this Agreement by the shareholders of any party but only:
(i) By the mutual agreement of the Boards of
Directors of Acquiror and RSMI;
(ii) By the Board of Directors of Acquiror if any of
the conditions provided in paragraph 12 or paragraph 14 shall not have been
satisfied, complied with or performed in any material respect, and the Board of
Directors of Acquiror shall not have waived in writing such failure of
satisfaction, non-compliance or non-performance; or
(iii) By the Board of Directors of RSMI , if any of the
conditions provided in paragraph 13 or paragraph 15 shall not have been
satisfied, complied with or performed in any material respect, and the Board of
Directors of RSMI shall not have waived in writing such failure of satisfaction,
non-compliance or non-performance.
(d) Effect of Abandonment. If the transactions contemplated
by this Agreement are abandoned as provided for in paragraph 18 hereof, (i) this
Agreement shall forthwith become wholly void and shall have no effect and there
shall be no liability to any party to this Agreement or to the directors,
officers, representatives and agents of any such parties and (ii) each party
shall pay its own fees and expenses incident to the negotiation, preparation,
and execution of this Agreement and the obtaining of the necessary approvals
thereof, including fees and expenses of its counsel, accountants, and experts,
if any.
19. Execution. This Agreement shall become binding and legally
effective when it has been executed by Acquiror, RSMI and Shareholders.
20. Miscellaneous.
-------------
(a) Finders. Except as may be specifically set forth herein
or in Exhibit G hereto, the parties acknowledge that there are no persons
entitled to receive any finder's fee, brokerage or similar commission or fee in
connection with the transactions contemplated by this Agreement and each party
hereto indemnifies and holds the other parties harmless against any claim for
any such finder's fee based on the alleged retention of a finder.
(b) Controlling Law. This Agreement shall be governed by and
construed in
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accordance with the laws of the State of Illinois as they are applied to
agreements executed, delivered and to be performed entirely within the State of
Illinois.
(c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received when delivered
against receipt or when deposited in the United States mails, first class
postage prepaid, or by recognized overnight courier, addressed as set forth
below:
(i) If to Acquiror:
Luminart Corp.
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn.: Xxxxxxx Xxxxxxxx, President
(ii) If to RSMI and Shareholders:
Rush Street Media, Inc.
000 Xxxxx 0xx Xxxxxx - Xxxxx 000
Xx. Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxx Xxxxxxxx, President
Any party may alter the address to which communications are to be sent by giving
written notice of such change and address by conformity with the provisions of
this paragraph of the giving of notice.
(d) Binding Nature of Agreements; No Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and assigns, except that no party may assign or
transfer its rights or obligations under this Agreement without the prior
written consent of the other parties hereto.
(e) Entire Agreement; Amendment. This Agreement contains the
entire understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. This Agreement may not be modified or amended other
than by an agreement in writing.
(f) Further Assurances. At any time, and from time to time,
after the Closing Date, each party will execute such additional instruments and
take such actions as may be reasonably requested by any other party to carry out
the intended purposes of this Agreement.
(g) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This
20
Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.
{Balance of page intentionally left blank.}
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
LUMINART CORP.
By: /s/ XXXXXXX XXXXXXXX
---------------------------------
Xxxxxxx Xxxxxxxx, President
Attest: /s/ XXX XXXXX
-----------------------------------
Xxx Xxxxx, Secretary
RUSH STREET MEDIA, INC.
By: /s/ XXXXX XXXXXXX XXXXXXXX
---------------------------------
Xxxxx Xxxxxxx Xxxxxxxx, President
Attest: /s/
-----------------------------------
, Secretary
SHAREHOLDERS
SIENA, LLC - 670,000 Shares
/s/ XXXXX XXXXXXXX
------------------------------------
By: /s/ Xxxxx Xxxxxxxx - 80,000 Shares
---------------------------------
NOVACORP, LLC - 100,000 Shares
/s/ XXXXXX XXXXXX
------------------------------------
Xxxxxx Xxxxxx 50,000 Shares
By: /s/
---------------------------------
Athena, LLC - 50,000 Shares
/s/ XXXXXX X. XXXXXX
------------------------------------
Xxxxxx X. XxXxxx - 50,000 Shares
By: /s/
---------------------------------
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