EXHIBIT 2.1
REORGANIZATION AGREEMENT OF DECEMBER 30, 1999
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (the "Agreement") dated as of the 30th day of
December, 1999 is entered into by and between Millennium Multi Xxxxx.xxx Corp.
("MMM"), a Delaware corporation with offices and principal place of business at
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, Glenhills
Corporation ("GLNC"), a Utah corporation with offices and principal place of
business at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, and
Xxxxxxxx Management Services ("GLNC Control Shareholder"), a general partnership
represented by Xxxxxx X. Xxxxxxxx, with offices and principal place of business
at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000.
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RECITALS
A. MMM capital structure consists in its entirety of 1,000 shares of common
stock, which represent 100% of issued and outstanding Common Stock of MMM (the
"MMM Shares").
B. MMM desires to sell, assign and transfer to GLNC all 1,000 of the MMM
Shares, and GLNC desires to purchase and acquire the MMM Shares by way of an
exchange of the MMM Shares for shares of authorized and heretofore unissued
Common Stock of GLNC ("GLNC New Shares"), upon and subject to the terms and
conditions of this Agreement. This entire transaction shall be herein referred
to as "Purchase".
C. GLNC, its Board of Directors and its shareholders have deliberated and
deemed it in their best interest to acquire MMM in order that GLNC may fully
maximize its business potential. GLNC and MMM, respectively, have approved and
adopted this Agreement as a plan of reorganization within the provisions of
Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 THE PURCHASE AND CLOSING
1.1 Purchase and Sale.
Upon and subject to all the terms and conditions of this Agreement, MMM
agrees to sell, assign and transfer the MMM Shares to GLNC and GLNC shall
purchase and acquire the MMM Shares for the consideration set forth herein.
1.2 Consideration to MMM.
In consideration of the sale, assignment and transfer of the MMM Shares,
GLNC shall pay, or provide, to MMM an aggregate of the following consideration
at the Effective Date (defined in Section 1.4 below):
GLNC shall have issued a total of 64,870,600 of GLNC New Shares to all the
persons and entities as set forth in Schedule 1.2 (collectively "MMM
Participants"), equal to eighty percent (80%) of GLNC Common Stock, after giving
effect to such issuance, adjusted for the dilution of GLNC Common Stock for
outstanding options, warrants, other purchase rights or securities convertible
into common stocks, and other considerations, as listed in Schedule 2.2.
1.3 Finders' Fees.
Technical Management Consultants, acting as a finder and coordinator in the
Purchase ("Finder"), shall perform its services to satisfaction of both MMM and
GLNC, and shall receive an aggregate of the following consideration at the
Effective Date (defined in Section 1.4 below):
GLNC shall have issued a total of 3,613,951 of GLNC New Shares to all of
the persons and entities as set forth in Schedule 1.3 (collectively "TMC
Participants"), approximately equal to four and one quarter of percent (4.25%)
of GLNC Common Stock, after giving effect to such issuance, adjusted for the
dilution of GLNC Common Stock for outstanding options, warrants, other purchase
rights or securities convertible into common stocks, and other considerations,
as listed in Schedule 2.2.
1.4 Date and Place of Closing.
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The consummation of the transactions contemplated herein (the "Closing")
shall occur upon execution of this Agreement as of the date and year first above
written ("Effective Date"). Exchange of all books, records, financial
information, documents, and other materials deemed necessary to completion of
the transaction contemplated under this Agreement shall occur at the Closing or
as soon as practicable thereafter.
1.5 Transactions and Document Exchange at Closing.
At the Closing, the following transactions shall occur and documents shall
be exchanged, all of which shall be deemed to occur simultaneously:
A. GLNC will deliver, or cause to be delivered:
(i) Stock certificates for the GLNC New Shares to be issued to MMM
Participants and TMC Participants or their designees pursuant to this Agreement;
(ii) The Certificate of Officers as set forth in Section 6.5;
(iii) A certificate dated at or about the Closing date from the Secretary
of State of Utah to the effect that GLNC is a corporation duly organized,
validly existing, and in good standing under the laws of Utah;
(iv) Such other documents, instruments, and/or certificates, if any, as
required to be delivered pursuant to the provisions of this Agreement, or which
are reasonably determined by both parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise may be reasonably
requested by MMM in furtherance of the intent of this Agreement;
B. MMM will deliver, or cause to be delivered:
(i) Stock certificates for the MMM Shares to be sold and transferred to
GLNC pursuant to this Agreement, in proper form for transfer and duly endorsed
to GLNC with stock powers duly executed in favor of GLNC, transferring all
right, title, and interest in and to the MMM Shares to GLNC;
(ii) The Certificate of Officers as set forth in Section 5.5;
(iii) A certificate dated at or about the Closing date from the Secretary
of State of Delaware to the effect that MMM is a corporation duly organized,
validly existing, and in good standing under the laws of California;
(iv) Such other documents, instruments, and/or certificates, if any, as
required to be delivered pursuant to the provisions of this Agreement, or which
are reasonably determined by both parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise may be reasonably
requested by GLNC in furtherance of the intent of this Agreement.
C. GLNC will make necessary preparations, including but not limited to
making required changes to GLNC Articles of Incorporation, to effectuate a
change of the official corporate name of the surviving entity from GLNC to
Millennium Multi Xxxxx.xxx Corp.
1.6 Post Closing Documents.
From time to time after the Closing, upon the reasonable request of any
party, the party to whom the request is made shall deliver such other and
further documents, instruments, and/or certificates as may be necessary to' more
fully vest in the requesting party the consideration provided for in this
Agreement or to enable the requesting party to obtain the rights and benefits
contemplated by this Agreement.
SECTION 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF GLNC
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GLNC represents, warrants and covenants, as of the date of this Agreement
and as of the Effective Date, as follows (all representations, warranties,
covenants and agreements made by GLNC in this Agreement are deemed to include
those of its wholly owned subsidiary, Access Research Group ("ARG"), unless the
context makes clear that the representation, warranty, covenant or agreement
pertains only to GLNC):
2.1 Organization.
GLNC is a corporation duly organized under the laws of Utah, subject to
certain conditions set forth in Schedule 2.1. GLNC has the corporate power to
own its property and to carry on its business as now being conducted and execute
and deliver this Agreement and consummate the transactions contemplated hereby
and thereby. GLNC is duly qualified to do business and is in good standing as a
foreign corporation in each state where it conducts business as set forth in
Schedule 2.1, constituting each state in which such qualification is required in
order to do business, except for states in which the failure to be so qualified
will not materially and adversely affect GLNC.
2.2 Capital Stock of GLNC.
Except as set forth in Schedule 2.2 attached hereto, as of the date hereof,
the authorized capital stock of GLNC consists of (i) 300,000,000 shares of
Common Stock, par value $.001, of which 16,745,770 shares are issued and
outstanding and (b) 20,000,000 shares of preferred stock of which no shares are
outstanding. As of the date of this Agreement, and except as set forth in
Schedule 2.2 attached hereto, there are no outstanding shares of capital stock,
or options, warrants or other rights to subscribe for or purchase from GLNC any
capital stock of GLNC or securities convertible into or exchangeable for capital
stock of GLNC. Such issued shares of GLNC are duly authorized, validly issued,
fully paid and non-assessable, and have not been issued in violation of any
preemptive rights. GLNC has one wholly owned subsidiary, ARG, and does not own
stock or equity of any other corporation.
2.3 Disclosure of GLNC.
GLNC has delivered to MMM its disclosure schedules, which contained true
and correct copies of its respective Articles of Incorporation, Bylaws, and
Minutes certified by its secretary as well as schedules of current officers and
directors and shareholder lists, including the nobos list from its transfer
agent enumerating all shareholders of GLNC Common Stock holding the securities
in the street name.
2.4 [Intentionally Omitted]
2.5 Financial Statements.
GLNC has previously furnished MMM a true and complete copy of GLNC's
audited balance sheet as of December 31, 1996, and the related statements of
operations, shareholders' equity and cash flows of GLNC as of December 31, 1996.
GLNC has previously furnished MMM a true and complete copy of GLNC's unaudited
balance sheets as of December 31, 1997, and December 31, 1998, and the related
statements of operations of GLNC as of December 31, 1997 and December 31, 1998.
GLNC has previously furnished MMM a true and complete copy of GLNC's unaudited
trial balance as of September 30, 1999.
2.6 Names, Patents, Trademarks.
Except as set forth in Schedule 2.6 attached hereto:
(i) GLNC neither owns, licenses, or possesses any copyrights, patents,
trademarks and trade names, federal, state or provincial, domestic or foreign;
(ii) GLNC has not received any notice with respect to any claim of alleged
infringement or unlawful or improper use of any copyright, patent, trademark,
trade name, process, invention, formula or other intangible property right owned
or alleged to be owned by others, which claim, if decided adversely, could have
a material adverse effect on the business or operations of GLNC.
2.7 Tax and Other Returns and Reports.
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Except as set forth in Schedule 2.7 attached hereto:
(i) All federal, state, local and foreign tax returns and tax reports,
domestic or foreign, required to be filed by GLNC have been filed on a timely
basis with the appropriate governmental agencies in all jurisdictions in which
such returns and reports are required to be filed and where failure to file
would materially and adversely effect GLNC. GLNC has not extended the time to
file any required tax returns or tax reports.
(ii) All significant federal, state, local and foreign income, franchise,
property and other taxes (including interest and penalties) due from GLNC have
been fully paid or adequately provided for on the books and financial statements
of GLNC.
(iii) No issues have been raised or are currently pending by the IRS or any
other taxing authority in connection with any of the returns and reports which,
individually or in the aggregate, might have a material adverse effect on GLNC,
nor does GLNC have any knowledge of circumstances under which such a claim could
be made. GLNC has not filed any tax returns on a unitary or consolidated basis
with any other entity and has not entered into any tax-sharing agreement.
(iv) All taxes, levies and other assessments which GLNC is required by law
to withhold or to collect have been duly withheld and collected and have been
paid over to the proper governmental authorities or held by GLNC for such
payment.
(v) The amounts reserved for taxes on the financial balance sheets will be
sufficient for the payment of all respective federal, state, provincial, county
and local taxes, domestic or foreign of any kind of GLNC including interest and
penalties in respect thereof whether disputed or not and whether accrued, due,
absolute, contingent or otherwise payable by GLNC attributable to all periods
ended on or before the Effective Date.
2.8 Agreements, Contracts and Commitments.
A. Schedule 2.8 attached hereto contains an accurate and complete list
of all agreements, contracts and leases to which GLNC is a party and which are
material to the condition (financial or other), business, prospects or
operations of GLNC. Except as indicated on Schedule 2.8, GLNC does not have in
effect and has no liability under:
(i) any collective bargaining agreements;
(ii) any bonus, deferred compensation, pension, profit-sharing, restricted
stock or employee stock purchase plans;
(iii) any employment or consulting agreement, contract or commitment with
an employee or consultant having more than one year to run from the date hereof
or containing an obligation to pay or accrue any monies more than $5,000 per
annum, except as otherwise provided in exhibit in Schedule 2.8;
(iv) any lease which involves a potential liability to GLNC as lessee or
any agreement of guarantee or indemnification running to any person or entity;
(v) any agreement or contract relating to capital expenditures which
obligates GLNC to make future payments;
(vi) any agreement or contract relating to the disposition or acquisition of
assets or any interest in any business enterprise except as contemplated hereby.
B. Except as set forth in Schedule 2.8, GLNC has not breached any of the
terms or conditions of:
(i) any agreement or contract set forth in Schedule 2.8 in such a manner as
would permit any other party to cancel or terminate the same or;
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(ii) any agreement or contract, including those referred to in clause (i),
if any such breach or breaches singly or in the aggregate would require the
payment of any amount.
2.9 Title to Properties: Liens and Encumbrances.
GLNC has good and marketable title to the assets and properties (real and
personal, tangible and intangible), which it owns and on which operations are
conducted and which are used in its business, other than property sold or
otherwise disposed of in the ordinary course of business subsequent to the
Effective Date, free and clear of all mortgages, security interests, liens,
charges or encumbrances of any nature whatsoever, except for taxes not yet due
and payable, none of which materially impairs the present use and occupation of
the premises. All such assets and properties, each of which is listed on
Schedule 2.9 are in good and serviceable condition, ordinary wear and tear
excepted. Except as listed on Schedule 2.9, GLNC is not a party to any lease of
real property, nor does GLNC own any real property.
2.10 No Breach of Statute or Contract; Governmental Authorizations; Required
Consents.
A. Neither the execution and delivery of this Agreement by GLNC nor
consummation of the transactions contemplated hereby or thereby by GLNC
(including the issuance of GLNC New Shares to MMM Participants) will conflict
with or result in a breach of any of the terms, conditions or provisions of the
Articles of Incorporation or Bylaws of GLNC or any judgment, order, injunction
or decree of any court or governmental authority to which GLNC is subject or any
agreement or contract to which GLNC is a party and which is material to the
financial condition or the conduct of the businesses of GLNC, or constitute a
material default thereunder.
B. To the best knowledge of GLNC after due inquiry, GLNC is not in
violation of any applicable law, statute, order, rule or regulation promulgated
by any federal, state, local or foreign governmental authority relating to the
operation, conduct or ownership of the property or business of GLNC, which
violation might have a material adverse affect on GLNC.
C. Neither the execution and delivery of this Agreement, nor the
consummation of the Purchase contemplated hereby, are events which of themselves
or with the giving of notice or the passage of time or both, would constitute a
violation of or conflict with or result in any breach of, or default under the
terms, conditions or provisions of, any judgment, law or regulation, or GLNC's
Articles of Incorporation or Bylaws, or any lease, contract, mortgage, deed of
trust, indenture, agreement or instrument to which GLNC is a party or by which
it is bound, or would result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever on the property or assets of GLNC and no
such event of itself or with the giving of notice or the passage of time or both
will result in the acceleration of the due date of any obligation to which GLNC
is bound.
D. GLNC is not party to any action, suit, claim, proceeding or
investigation either pending or, to the best knowledge of its officers and
directors, threatened against, respectively, GLNC or any of its officers or
directors in their capacities as such, at law or in equity, or by or before any
federal, state, provincial, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign. GLNC is not
the subject of any outstanding judgment, or operating under, subject to, or in
default with respect to, any order, writ, injunction or decree of any court or
federal, state, provincial, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign, which impairs
or could impair the conduct of its business in any material way.
2.11 Litigation.
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Except as set forth in Schedule 2.11, GLNC is not party to any action,
suit, claim, proceeding or investigation either pending or, to the best
knowledge of its officers and directors, threatened against, respectively, GLNC
or any of its officers or directors in their capacities as such, at law or in
equity, or by or before any federal, state, provincial, municipal or other
governmental department, commission, board, agency or instrumentality, domestic
or foreign. GLNC is not the subject of any outstanding judgment, or operating
under, subject to, or in default with respect to, any order, writ, injunction or
decree of any court or federal, state, provincial, municipal or
other-governmental department, commission, board, agency or instrumentality,
domestic or foreign, which impairs or could impair the conduct of its business
in any material way.
2.12 Authorization of Agreement.
The execution and delivery and the performance of this Agreement by GLNC
have been duly and validly authorized and approved by the Board of Directors of
GLNC, and GLNC has taken all action required by law, its Articles of
Incorporation and Bylaws to authorize the execution, delivery and performance of
this Agreement and other documents contemplated in this Agreement related to the
Purchase (the "Purchase Documents").
2.13 Status of GLNC Common Stock.
The GLNC New Shares to be issued to MMM Participants pursuant to this
Agreement, when so issued, will be duly and validly authorized and issued, fully
paid and non-assessable.
2.14 Brokers' and Finders' Fees.
Except as set forth in Section 1.3 and described in Schedule 1.3, no agent,
broker, investment banker, person or firm acting on behalf of GLNC is or will be
entitled to any brokers' or finders' fee or any other commission or similar fee
directly or indirectly from GLNC in connection with any of the transactions
contemplated herein.
2.15 Indemnification.
GLNC hereby agrees to indemnify and hold harmless MMM, MMM Participants and
each director, officer and shareholder thereof, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or any other
statute or at common law or otherwise and, except as provided below, shall
reimburse MMM and each such director, officer or shareholder for any legal or
other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions result from a breach or alleged breach of the representations,
warranties or covenants contained in this Agreement, or arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in this Agreement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only insofar as
the untrue statement or omission or alleged untrue statement or omission was
made with respect to the description of GLNC.
Promptly after receipt by a party to be indemnified pursuant to this
Section 2.15 of notice of a statement of claim, demand or commencement of any
action in respect of which indemnity may be sought against GLNC hereunder, the
indemnified party will notify GLNC in writing thereof, and GLNC shall, subject
to the provisions stated below, assume the defense of such claim or action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to MMM and shall not be counsel otherwise employed by GLNC), and
the payment of expenses insofar as such claim or action shall relate to any
alleged liability in respect of which indemnity may be sought against GLNC. The
indemnified party or parties shall have the right to employ separate counsel in
any action and to participate in the defense thereof, but the fees and expenses
of their counsel shall not be at the expense of GLNC unless the employment of
that counsel has been specifically authorized by GLNC. GLNC shall not be liable
to indemnify any person for any settlement of any action effected without GLNC's
consent. Notwithstanding any provision in this Agreement to the contrary, the
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obligations of GLNC under this Section 2.15 shall survive consummation of
the transactions contemplated by this Agreement and the other Purchase Documents
for a period of three (3) years after the Effective Date.
2.16 Compliance with Laws.
GLNC is not in violation of any term or provision of its Articles of
Incorporation or Bylaws, or of any term or provision of any judgment, decree,
order, statute, injunction, rule, ordinance or governmental regulation
(including building, zoning, or environmental) applicable to it, its properties,
or of any agreement or instrument applicable to it; GLNC has maintained in full
force and effect any license or permit material to the conduct of its business,
and has not received any notification that any revocation or limitation thereof
is threatened or pending.
2.17 Insurance.
Schedule 2.17 contains a true, correct and complete description of all
policies of fire, casualty and extended coverage, public liability, worker's
compensation, life and other forms of insurance owned or held, respectively, by
GLNC. All such policies are in full force and effect and will remain so through
the Effective Date. All buildings, plants and properties, including but not
limited to leasehold interests, machinery, equipment, billboards and inventories
of GLNC are adequately insured against loss or damage by fire and all other
hazards and risks of the character usually insured against by persons operating
similar properties in the localities where such properties are located
(including use and occupancy insurance) under valid and enforceable policies
issued by insurers of recognized responsibility. Such insurance coverage will be
continued in full force and effect through the Effective Date.
2.18 Absence of Undisclosed Liabilities; Adverse Changes in Condition.
A. GLNC has no liabilities or obligations which, individually or in the
aggregate, are material to GLNC and which have not been:
(i) reflected in the consolidated trial balance of GLNC as of September 30,
1999 referred to in Section 2.5 (the "GLNC Trial Balance"); or
(ii) incurred in the ordinary course of business since December 31, 1996.
B. Except as set forth in Section 2.5, since September 30, 1999, whether or
not in the ordinary course of business, there has not been, occurred or arisen:
(i) any material adverse change in the consolidated financial condition or
in the operations of the business of GLNC from that shown on the GLNC Trial
Balance; or
(ii) any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, materially and adversely affecting any property or
business of GLNC which is material to the financial condition of the operations
of the business of GLNC; or
(iii) any actual or, to the knowledge of GLNC, threatened, strike or other
labor trouble or dispute which materially adversely affects, or which insofar as
GLNC knows might materially adversely affect the business or prospects of GLNC.
SECTION 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MMM
MMM represents, warrants and covenants, as of the date of this Agreement
and as of the Effective Date, as follows:
3.1 Organization.
MMM is a corporation duly organized under the laws of Delaware, subject to
certain conditions set forth in Schedule 3.1. MMM has the corporate power to own
its property and to carry on its business as now being
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conducted and execute and deliver this Agreement and consummate the
transactions contemplated hereby and thereby.
3.2 Capital Stock of MMM.
Except as set forth in Schedule 3.2 attached hereto, as of the date hereof,
the authorized capital stock of MMM consists of 1,000 shares of Common Stock,
par value $.001, of which 1,000 shares are issued and outstanding. As of the
date of this Agreement, and except as set forth in Schedule 2.2 attached hereto,
there are no outstanding options, warrants or other rights to subscribe for or
purchase from MMM any capital stock of MMM or securities convertible into or
exchangeable for capital stock of MMM. Such issued shares of MMM are duly
authorized, validly issued, fully paid and non-assessable, and have not been
issued in violation of any preemptive rights. MMM has no subsidiaries and does
not own stock or equity of any other corporation.
3.3 Disclosure of MMM.
MMM has delivered to GLNC its disclosure schedules, which contained true
and correct copies of its respective Articles of Incorporation, Bylaws, and
Minutes certified by its secretary as well as schedules of current officers and
directors and shareholder lists.
Business Plan and Conduct.
MMM is an Internet entertainment company embracing traditional and digital
communication modes to provide a new age of entertainment content to consumers
in the United States and around the world. Through its affiliations within the
industry, MMM will produce and distribute entertainment content in the filmed
programming and recorded music sectors, as well as facilitate other projects, as
described in the MMM Business Plan, included in Exhibit B.
3.5 Financial Statements.
MMM has previously furnished GLNC a true and complete copy of MMM's initial
unaudited balance sheet as of December 15, 1999.
3.6 Names, Patents, Trademarks.
Except as set forth in Schedule 3.6 attached hereto:
(i) MMM neither owns, licenses, or possesses any copyrights, patents,
trademarks and trade names, federal, state or provincial, domestic or foreign;
(ii) MMM has not received any notice with respect to any claim of alleged
infringement or unlawful or improper use of any copyright, patent, trademark,
trade name, process, invention, formula or other intangible property right owned
or alleged to be owned by others, which claim, if decided adversely, could have
a material adverse effect on the business or operations of MMM.
3.7 [Intentionally Omitted]
3.8 Agreements, Contracts and Commitments.
A. Schedule 3.8 attached hereto contains an accurate and complete list
of all agreements, contracts and leases to which MMM is a party and which are
material to the condition (financial or other), business, prospects or
operations of MMM. Except as indicated on Schedule 3.8, MMM does not have in
effect and has no liability under:
(i) any collective bargaining agreements;
(ii) any bonus, deferred compensation, pension, profit-sharing, restricted stock
or employee stock purchase plans;
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(iii) any employment or consulting agreement, contract or commitment with
an employee or consultant having more than one year to run from the date hereof
or containing an obligation to pay or accrue any monies more than $5,000 per
annum, except as otherwise provided in exhibit in Schedule 2.8;
(iv) any lease which involves a potential liability to MMM as lessee or any
agreement of guarantee or indemnification running to any person or entity;
(v) any agreement or contract relating to capital expenditures which
obligates MMM to make future payments;
(vi) any agreement or contract relating to the disposition or acquisition
of assets or any interest in any business enterprise except as contemplated
hereby.
B. Except as set forth in Schedule 3.8, MMM has not breached any of the
terms or conditions of:
(i) any agreement or contract set forth in Schedule 3.8 in such a manner as
would permit any other party to cancel or terminate the same or;
(ii) any agreement or contract, including those referred to in clause (i),
if any such breach or breaches singly or in the aggregate would require the
payment of any amount.
3.9 Title to Properties: Liens and Encumbrances.
MMM has good and marketable title to the assets and properties (real and
personal, tangible and intangible), which it owns and on which operations are
conducted and which are used in its business, other than property sold or
otherwise disposed of in the ordinary course of business subsequent to the
Effective Date, free and clear of all mortgages, security interests, liens,
charges or encumbrances of any nature whatsoever, except for taxes not yet due
and payable, none of which materially impairs the present use and occupation of
the premises. All such assets and properties, each of which is listed on
Schedule 3.9 are in good and serviceable condition, ordinary wear and tear
excepted. Except as listed on Schedule 3.9, MMM is not a party to any lease of
real property, nor does MMM own any real property.
3.10 No Breach of Statute or Contract; Governmental Authorizations;
Required Consents.
A. Neither the execution and delivery of this Agreement by MMM nor
consummation of the transactions contemplated hereby or thereby by MMM will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Articles of Incorporation or Bylaws of MMM or any judgment,
order, injunction or decree of any court or governmental authority to which MMM
is subject or any agreement or contract to which MMM is a party and which is
material to the financial condition or the conduct of the businesses of MMM, or
constitute a material default thereunder.
B. To the best knowledge of MMM after due inquiry, MMM is not in violation
of any applicable law, statute, order, rule or regulation promulgated by any
federal, state, local or foreign governmental authority relating to the
operation, conduct or ownership of the property or business of MMM, which
violation might have a material adverse affect on MMM.
C. Neither the execution and delivery of this Agreement, nor the
consummation of the Purchase contemplated hereby, are events which of themselves
or with the giving of notice or the passage of time or both, would constitute a
violation of or conflict with or result in any breach of, or default under the
terms, conditions or provisions of, any judgment, law or regulation, or MMM's
Articles of Incorporation or Bylaws, or any lease, contract, mortgage, deed of
trust, indenture, agreement or instrument to which GLNC is a party or by which
it is
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bound, or would result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on the property or assets of MMM and no
such event of itself or with the giving of notice or the passage of time or both
will result in the acceleration of the due date of any obligation to which MMM
is bound.
D. MMM is not party to any action, suit, claim, proceeding or investigation
either pending or, to the best knowledge of its officers and directors,
threatened against, respectively, MMM or any of its officers or directors in
their capacities as such, at law or in equity, or by or before any federal,
state, provincial, municipal or other governmental department, commission,
board, agency or instrumentality, domestic or foreign. MMM is not the subject of
any outstanding judgment, or operating under, subject to, or in default with
respect to, any order, writ, injunction or decree of any court or federal,
state, provincial, municipal or other governmental department, commission,
board, agency or instrumentality, domestic or foreign, which impairs or could
impair the conduct of its business in any material way.
3.11 Litigation.
MMM is not party to any action, suit, claim, proceeding or investigation either
pending or, to the best knowledge of its officers and directors, threatened
against, respectively, MMM or any of its officers or directors in their
capacities as such, at law or in equity, or by or before any federal, state,
provincial, municipal or other governmental department, commission, board,
agency or instrumentality, domestic or foreign. MMM is not the subject of any
outstanding judgment, or operating under, subject to, or in default with respect
to, any order, writ, injunction or decree of any court or federal, state,
provincial, municipal or other-governmental department, commission, board,
agency or instrumentality, domestic or foreign, which impairs or could impair
the conduct of its business in any material way.
3.12 Authorization of Agreement.
The execution and delivery and the performance of this Agreement by MMM
have been duly and validly authorized and approved by the Board of Directors of
MMM, and MMM has taken all action required by law, its Articles of Incorporation
and Bylaws to authorize the execution, delivery and performance of this
Agreement and other Purchase Documents.
3.13 [Intentionally Omitted]
3.14 Brokers' and Finders' Fees.
Except as set forth in Section 1.3 and described in Schedule 1.3, no agent,
broker, investment banker, person or firm acting on behalf of MMM is or will be
entitled to any brokers' or finders' fee or any other commission or similar fee
directly or indirectly from MMM in connection with any of the transactions
contemplated herein.
3.15 Indemnification.
MMM hereby agrees to indemnify and hold harmless GLNC, and each director,
officer and shareholder thereof, from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act or any other statute or at common
law or otherwise and, except as provided below, shall reimburse GLNC and each
such director, officer or shareholder for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions result from a breach or
alleged breach of the representations, warranties or covenants contained in this
Agreement, or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in this Agreement, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only insofar as the untrue statement or omission or alleged
untrue statement or omission was made with respect to the description of MMM.
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Promptly after receipt by a party to be indemnified pursuant to this
Section 3.15 of notice of a statement of claim, demand or commencement of any
action in respect of which indemnity may be sought against MMM hereunder, the
indemnified party will notify MMM in writing thereof, and MMM shall, subject to
the provisions stated below, assume the defense of such claim or action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to GLNC and shall not be counsel otherwise employed by MMM), and
the payment of expenses insofar as such claim or action shall relate to any
alleged liability in respect of which indemnity may be sought against MMM. The
indemnified party or parties shall have the right to employ separate counsel in
any action and to participate in the defense thereof, but the fees and expenses
of their counsel shall not be at the expense of MMM unless the employment of
that counsel has been specifically authorized by MMM. MMM shall not be liable to
indemnify any person for any settlement of any action effected without MMM's
consent. Notwithstanding any provision in this Agreement to the contrary, the
obligations of MMM under this Section 3.15 shall survive consummation of the
transactions contemplated by this Agreement and the other Purchase Documents for
a period of three (3) years after the Effective Date.
3.16 Compliance with Laws.
MMM is not in violation of any term or provision of its Articles of
Incorporation or Bylaws, or of any term or provision of any judgment, decree,
order, statute, injunction, rule, ordinance or governmental regulation
(including building, zoning, or environmental) applicable to it, its properties,
or of any agreement or instrument applicable to it; MMM has maintained in full
force and effect any license or permit material to the conduct of its business,
and has not received any notification that any revocation or limitation thereof
is threatened or pending.
3.17 Insurance.
Schedule 3.17 contains a true, correct and complete description of all
policies of fire, casualty and extended coverage, public liability, worker's
compensation, life and other forms of insurance owned or held, respectively, by
MMM. All such policies are in full force and effect and will remain so through
the Effective Date. All buildings, plants and properties, including but not
limited to leasehold interests, machinery, equipment, billboards and inventories
of MMM are adequately insured against loss or damage by fire and all other
hazards and risks of the character usually insured against by persons operating
similar properties in the localities where such properties are located
(including use and occupancy insurance) under valid and enforceable policies
issued by insurers of recognized responsibility. Such insurance coverage will be
continued in full force and effect through the Effective Date.
3.18 Absence of Undisclosed Liabilities; Adverse Changes in Condition.
A. MMM has no liabilities or obligations which, individually or in the
aggregate, are material to MMM and which have not been:
(i) reflected in the initial balance sheet of MMM as of December 15, 1999
referred to in Section 3.5 (the "MMM Balance Sheet"); or
(ii) incurred in the ordinary course of business since (incorporation
date).
B. Except as set forth in Section 3.5, since December 15, 1999, whether
or not in the ordinary course of business, there has not been, occurred or
arisen:
(i) any material adverse change in the consolidated financial condition or
in the operations of the business of MMM from that shown on the MMM Balance
Sheet; or
(ii) any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, materially and adversely affecting any property or
business of MMM which is material to the financial condition of the operations
of the business of MMM; or
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(iii) any actual or, to the knowledge of MMM, threatened, strike or other
labor trouble or dispute which materially adversely affects, or which insofar as
MMM knows might materially adversely affect the business or prospects of MMM.
SECTION 4 CONDUCT AND TRANSACTIONS ON AND FOLLOWING THE EFFECTIVE DATE
4.1 Investigations; Operation of Business of GLNC and MMM.
As of the Effective Date or as soon as practicable thereafter:
A. GLNC and MMM each agree to use their best efforts to give to the other
and their respective representatives and agents full access to all the premises
and books and records of GLNC and MMM, and to cause its officers and independent
auditors to furnish the other such financial operations data and other
information with respect to the business and properties of it as the other shall
from time to time reasonably request; provided, however, that any such
investigation:
(i) shall be conducted in such manner as not to interfere unreasonably with
the operation of the business of GLNC or MMM, as the case may be, and
(ii) shall not affect any of the representations and warranties
hereunder. All information obtained by one party from the other hereunder shall
be kept confidential and shall be revealed only to those persons, including
counsel, accountants and investment bankers, who have a need for such
information in the performance of their duties for their respective principals,
unless disclosure of such material is compelled by a judicial or administrative
process, or, in the opinion of their respective counsel, by other requirements
of law. The foregoing shall not apply to information (a) ascertainable or
obtained from public information; (b) received from a third party not known to
the recipient to be under a duty to keep it confidential; (c) which becomes
known to the public (other than through a breach of this Agreement); or (d)
which was independently developed by (or in the possession of prior to its
disclosure to) the party other than the one to which it relates. It is
understood that each party shall be deemed to have satisfied its obligation to
hold such information confidential if it exercises the same care as it takes to
preserve confidentiality for its own similar information. In the event of
termination of this Agreement, each party will return all documents, work papers
and other material obtained from the other party in connection with the
transactions contemplated hereby.
B. Each party will use its best efforts to preserve substantially intact
their business organizations, to keep available the services of their present
officers and employees, and to preserve their present relationships with persons
having significant business relations therewith.
C. GLNC shall conduct its business only in the ordinary course, and by way
of amplification and not limitation, will not without the prior written consent
of MMM:
(i) issue, sell, purchase or redeem, or grant or commit to issue any GLNC
capital stock, other than upon the exercise of outstanding stock options,
warrants or stock purchase rights described in Schedule 2.2;
(ii) grant or commit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of its capital stock
or issue or commit to issue any securities convertible into or exchangeable for
shares of GLNC capital stock;
(iii) declare, set aside, or pay any dividend or distribution with respect
to the capital stock or other ownership interest of GLNC;
(iv) directly or indirectly redeem, purchase or otherwise acquire or commit
to acquire any GLNC capital stock;
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(v) transfer or dispose of any assets or incur any liability except in the
ordinary course of business;
(vi) effect a split or reclassification of any capital stock of GLNC or a
recapitalization of GLNC;
(vii) engage in any transaction which would result in the Purchase,
reorganization, consolidation or division of GLNC or any other transaction
having similar effect;
(viii) change the Articles of Incorporation, By-Laws or other governing
instruments of GLNC, other than speculated by this Agreement;
(ix) acquire or agree to acquire the stock or assets of any other business;
(x) take any action after the date hereof that would cause any
representation or warranty contained in this Agreement to become untrue in any
material respect;
(xi) pay any obligation or liability, other than (a) obligations or
liabilities reflected in GLNC's balance sheet when due, (b) liabilities incurred
since the date of such Balance Sheets in the ordinary course of business, and
(c) obligations under any franchise agreements, lease agreements, pension,
bonus, profit sharing, employee stock ownership, stock option and warrant
agreements, and the other agreements set forth in the exhibits;
(xii) make or become obligated to make any payment or distribution
(including, without limitation, dividends) to its stockholders (in their
capacity as stockholders);
(xiii) do any act or omit to do any act, or permit any act or omission to
act, which will cause it to breach any contract or commitment to which it is a
party;
(xiv) solicit from any other person or entity an offer or expression of
interest in or with respect to an offer for an acquisition, combination, or
similar transaction involving it or substantially all of its assets or
securities except as described herein and GLNC will promptly inform MMM of the
existence of any unsolicited offer or expression of interest; or
(xv) waive the provisions of any statute of limitations as such provisions
may apply to the assessment of federal, state or foreign income taxes payable by
it for any taxable year or period or portion thereof prior to the Effective
Date.
C. MMM shall conduct its business only in the ordinary course, and by way
of amplification and not limitation, will not without the prior written consent
of GLNC:
(i) issue, sell, purchase or redeem, or grant or commit to issue any MMM
capital stock, other than upon the exercise of outstanding stock options,
warrants or stock purchase rights described in Schedule 3.2;
(ii) grant or commit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of its capital stock
or issue or commit to issue any securities convertible into or exchangeable for
shares of MMM capital stock;
(iii) declare, set aside, or pay any dividend or distribution with respect
to the capital stock or other ownership interest of MMM;
(iv) directly or indirectly redeem, purchase or otherwise acquire or commit
to acquire any MMM capital stock;
(v) transfer or dispose of any assets or incur any liability except in the
ordinary course of business;
(vi) effect a split or reclassification of any
capital stock of MMM or a recapitalization of MMM;
(vii) engage in any transaction which would result in the Purchase,
reorganization, consolidation or division of MMM or any other transaction having
similar effect;
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(viii) change the Articles of Incorporation, By-Laws or other governing
instruments of MMM, other than speculated by this Agreement;
(ix) acquire or agree to acquire the stock or assets of any other business;
(x) take any action after the date hereof that would cause any
representation or warranty contained in this Agreement to become untrue in any
material respect;
(xi) pay any obligation or liability, other than (a) obligations or
liabilities reflected in MMM's balance sheet when due, (b) liabilities incurred
since the date of such Balance Sheets in the ordinary course of business, and
(c) obligations under any franchise agreements, lease agreements, pension,
bonus, profit sharing, employee stock ownership, stock option and warrant
agreements, and the other agreements set forth in the exhibits;
(xii) make or become obligated to make any payment or distribution
(including, without limitation, dividends) to its stockholders (in their
capacity as stockholders);
(xiii) do any act or omit to do any act, or permit any act or omission to
act, which will cause it to breach any contract or commitment to which it is a
party;
(xiv) solicit from any other person or entity an offer or expression of
interest in or with respect to an offer for an acquisition, combination, or
similar transaction involving it or substantially all of its assets or
securities except as described herein and MMM will promptly inform GLNC of the
existence of any unsolicited offer or expression of interest; or
(xv) waive the provisions of any statute of limitations as such provisions
may apply to the assessment of federal, state or foreign income taxes payable by
it for any taxable year or period or portion thereof prior to the Effective
Date.
4.2 Stockholder Approval.
If required by law, GLNC and MMM shall submit and recommend this Agreement
to its stockholders for approval at a meeting of its stockholders to be held at
the earliest practicable date for the purpose of considering and voting upon a
proposal to approve the Purchase.
SECTION 5 CONDITIONS TO OBLIGATION OF GLNC
The obligation of GLNC to effect the Purchase shall be subject to each of
the following conditions:
5.1 Representations and Warranties of MMM to be True.
The representations and warranties of MMM herein contained shall be true in
all material respects at the Effective Date or as soon as practicable thereafter
with the same effect as though made at such time, except to the extent waived
hereunder or affected by the schedules delivered hereunder; MMM shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by it; and MMM shall have delivered to GLNC a
certificate of MMM in form and substance satisfactory to GLNC dated the
Effective Date or as soon as practicable thereafter and signed by its principal
financial officer, to all such effects.
5.2 Shareholder Approval.
The shareholders of MMM shall have approved this Agreement, if required by
law.
5.3 No Legal Proceedings.
No injunction or restraining order shall be in effect prohibiting the
Purchase, and no action or proceeding shall have been instituted and, as of the
Effective Date, remain pending before a court to restrain or prohibit the
transactions contemplated by this Agreement.
5.4 Statutory Requirements.
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All statutory requirements for the valid consummation by MMM of the
transactions contemplated by this Agreement shall have been fulfilled, including
the shareholder approval described in Section 4.2; all authorizations, consents
and approvals of all federal, state and local governmental agencies and
authorities required to be obtained in order to permit consummation by MMM of
the transactions contemplated by this Agreement, and to permit the businesses
presently carried on by GLNC and MMM to continue unimpaired in all material
respects immediately following the Effective Date shall have been obtained.
5.5 Certificate of Officers.
GLNC shall have received from the officers of MMM, a certificate dated the
Effective Date or as soon as practicable thereafter, in form and substance
satisfactory to GLNC, substantially to the effect that:
(i) MMM is a corporation duly incorporated and validly existing and in good
standing under the laws of the State of Delaware;
(ii) MMM is duly qualified to do business as a foreign corporation and in
good standing in each state set forth in Schedule 3.1;
(iii) MMM has the corporate power to carry on its existing business;
(iv) the authorized capital stock of MMM consists of 1,000 shares of common
stock, no par value, and the number of issued and outstanding shares of capital
stock of MMM is 1,000 common shares;
(v) each of this Agreement and the Purchase Documents has been duly
authorized, executed and delivered by MMM and is the valid and binding
obligation of MMM. All corporate action by MMM and its shareholders required to
authorize the Purchase has been taken and MMM has the corporate power to effect
the Purchase provided for in this Agreement;
(vi) all authorizations, consents and approvals of all governmental
agencies and authorities, including state securities or "blue sky" authorities,
required in order to permit consummation by MMM of the transactions contemplated
by this Agreement and the Agreement of Purchase have been obtained;
(vii) all of the outstanding capital stock of MMM has been duly and validly
authorized and issued, is fully paid and nonassessable; and
(viii) to the best knowledge of such officers, neither the execution and
delivery by MMM of this Agreement, nor consummation of the transactions
contemplated hereby or thereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, regulation or ruling of any court or governmental authority, domestic or
foreign, to which MMM is subject, or constitute a material default thereunder.
5.6 Required Consents.
MMM shall have obtained the consents or approvals of each person and
governmental agency whose consents or approval is required in connection with
the execution, delivery and performance of this Agreement except for such
consents or approvals the failure of which to obtain would not in the aggregate
have a material adverse effect on GLNC or MMM.
5.7 Officer Agreements.
MMM shall have provided to GLNC evidence in writing indicating consent and
commitment of MMM officers to assume the officers' positions of GLNC pursuant to
the provisions of Section 7.6.
SECTION 6 CONDITIONS TO OBLIGATION OF MMM
The obligation of MMM to effect the Purchase shall be subject to each of
the following conditions:
6.1 Representations and Warranties of GLNC to be True.
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The representations and warranties of GLNC herein contained shall be true
in all material respects at the Effective Date or as soon as practicable
thereafter with the same effect as though made at such time, except to the
extent waived hereunder or affected by the schedules delivered hereunder; GLNC
shall have performed in all material respects all obligations and complied in
all material respects with all covenants and conditions required by this
Agreement to be performed or complied with by it; and GLNC shall have delivered
to MMM a certificate of GLNC in form and substance satisfactory to MMM dated the
Effective Date or as soon as practicable thereafter and signed by its principal
financial officer, to all such effects.
6.2 Shareholder Approval.
The shareholders of GLNC shall have approved this Agreement, if required by
law.
6.3 No Legal Proceedings.
No injunction or restraining order shall be in effect prohibiting the
Purchase, and no action or proceeding shall have been instituted and, as of the
Effective Date, remain pending before a court to restrain or prohibit the
transactions contemplated by this Agreement.
6.4 Statutory Requirements.
All statutory requirements for the valid consummation by GLNC of the
transactions contemplated by this Agreement shall have been fulfilled, including
the shareholder approval described in Section 4.2; all authorizations, consents
and approvals of all federal, state and local governmental agencies and
authorities required to be obtained in order to permit consummation by GLNC of
the transactions contemplated by this Agreement, and to permit the businesses
presently carried on by MMM and GLNC to continue unimpaired in all material
respects immediately following the Effective Date shall have been obtained.
6.5 Certificate of Officers.
MMM shall have received from the officers of GLNC, a certificate dated
the Effective Date or as soon as practicable thereafter, in form and substance
satisfactory to MMM, substantially to the effect that:
(i) GLNC is a corporation duly incorporated and validly existing and in
good standing under the laws of the State of Utah;
(ii) GLNC is duly qualified to do business as a foreign corporation and in
good standing in each state set forth in Schedule 2.1;
(iii) GLNC has the corporate power to carry on its existing business;
(iv) the authorized capital stock of GLNC consists of 300,000,000 shares of
common stock, $0.001 par value, and 20,000,000 shares of preferred stock, $0.001
par value; and the number of issued and outstanding shares of GLNC Common Stock
of GLNC is 11,857,650 shares, and there are no outstanding preferred shares;
(v) the shares of GLNC Common Stock to be issued in exchange for shares of
MMM Common Stock pursuant to the Agreement have been duly authorized and are
duly and validly issued, fully paid and nonassessable;
(vi) each of this Agreement and the Purchase Documents has been duly
authorized, executed and delivered by GLNC and is the valid and binding
obligation of GLNC. All corporate action by GLNC and its shareholders required
to authorize the Purchase has been taken and GLNC has the corporate power to
effect the Purchase provided for in this Agreement;
(vii) all authorizations, consents and approvals of all governmental
agencies and authorities, including state securities or "blue sky" authorities,
required in order to permit consummation by GLNC of the transactions
contemplated by this Agreement and the Agreement of Purchase have been obtained;
17
(viii) all of the outstanding capital stock of GLNC has been duly and
validly authorized and issued, is fully paid and nonassessable; and
(ix) to the best knowledge of such officers, neither the execution and
delivery by GLNC of this Agreement, nor consummation of the transactions
contemplated hereby or thereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, regulation or ruling of any court or governmental authority, domestic or
foreign, to which GLNC is subject, or constitute a material default thereunder.
6.6 Required Consents.
GLNC shall have obtained the consents or approvals of each person and
governmental agency whose consents or approval is required in connection with
the execution, delivery and performance of this Agreement except for such
consents or approvals the failure of which to obtain would not in the aggregate
have a material adverse effect on MMM or GLNC.
6.7 [Intentionally Omitted]
6.8 GLNC Common Stock.
At the Effective Date or as soon as practicable thereafter, GLNC shall have
issued a number of shares of GLNC New Shares to MMM Participants, in exchange
for all of the then issued and outstanding shares of MMM Common Stock, in
accordance with the provisions of this Agreement.
6.9 Election of Directors.
At the Effective Date, the persons identified in Schedule 6.9 shall be
elected or appointed to the Board of Directors of GLNC, as more specifically
described in Section 7.5 hereof.
6.10 Surviving Name.
At the Effective Date, the name of GLNC shall be changed to Millennium
Multi Xxxxx.xxx Corp.
SECTION 7 CERTAIN UNDERSTANDINGS AND AGREEMENTS
7.1 Shareholders' Meeting.
If required by law, GLNC and MMM will cause a shareholders' meeting to be
held at or prior to the Effective Date by GLNC and MMM for the purpose of
adopting this Agreement and approving and ratifying the consummation of the
transactions contemplated hereby.
7.2 Reservation of Stock.
The Board of Directors of GLNC prior to the Effective Date or as soon as
practicable thereafter will reserve sufficient shares of GLNC New Shares for
issuance pursuant to the terms of this Agreement and take such other action as
is necessary in connection therewith.
7.3 GLNC Liabilities.
GLNC hereby agrees to resolve all financial obligations of GLNC, as set
forth in GLNC Trial Balance prior to the Effective Date, or by a special
agreement between GLNC Control Stockholder and MMM, pursuant to Section 7.4.
7.4 Explicit Indemnification and Security.
GLNC hereby agrees to indemnify and hold
harmless MMM, MMM Participants and each director, officer and shareholder
thereof, from and against any and all GLNC liabilities incurred by GLNC, its
officers or directors, past and present, or any of its subsidiaries, merger or
other combination partners, owned or conducting business with, either currently
or in the past, including but not limited to liabilities disclosed in GLNC Trial
Balance,
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whether already settled by MMM as of the date of this Agreement or
currently outstanding, provided however that in no event shall such
indemnification exceed the total sum of $90,000, as set forth herein below and
in the notes payable in Exhibit D ($5,000) and Exhibit E ($85,000). Said
aggregate current and potential liabilities shall be secured by GLNC Control
Stockholder with currently issued and outstanding Common Stock of GLNC owned and
controlled by the GLNC Control Shareholder (the GLNC Control Shares") in the
amount of 50,000 shares pursuant to a 6-month Note Payable set forth in Exhibit
D, and 340,000 shares pursuant to a 12-month Note Payable set forth in Exhibit
E. The sole remedy of MMM, MMM Participants and each director, officer and
shareholder thereof shall be to foreclose and sell the shares placed as security
for such obligations by GLNC Control Shareholder. GLNC, its officers, directors,
attorneys, agents and shareholders shall have no liability.
In the event that any such GLNC liabilities are presented for payment, MMM
shall forthwith advise GLNC Control Shareholder of such claim and all
information relating thereto. GLNC Control Shareholder shall have ten (10) days
following receipt of such claim by GLNC Control Shareholder, in which to approve
or disapprove the payment thereof. In the event GLNC Control Shareholder
disapproves the payment of such claim, GLNC Control Shareholder shall have the
option of undertaking, at its own expense, the defense thereof, including
selection of counsel, terms of settlement and other matters relating directly to
the disposition of such claim. GLNC Control Shareholder's election to assume
defense of any such claim shall be contained in the ten (10) day notice provided
hereinabove. At such time as any such claim is paid by MMM, whether by reason of
GLNC Control Shareholder's approval thereof or judgement having been entered and
satisfied by MMM, the indemnity provided herein by GLNC Control Shareholder
shall become effective. Should MMM pay such claim without the consent of GLNC
Control Shareholder or other than pursuant a judgement entered against MMM, GLNC
Control Shareholder shall be released from indemnity provisions provided herein
and MMM shall have no right to proceed to collect any funds from GLNC Control
Shareholder pursuant to the note set forth in Exhibit E. Under any
circumstances, the indemnity provisions in this Agreement and in Exhibit E shall
expire one (1) year from the Effective Date of this Agreement.
7.5 Board of Directors Following Purchase.
A. GLNC Control Shareholder shall have the right to elect the equivalent of
up to 20% of the members of the Board of Directors in elections held within a
period of two (2) years following the Effective Date, currently equal to one (1)
seat pursuant to Paragraph B in Section 7.5 below. Such right shall be cancelled
in the event of changes to the structure of the Board of Directors resulting
from a potential material corporate merger, acquisition, combination or other
reorganization approved by the Board of Directors.
B. Upon consummation of the Purchase, the Board of Directors of GLNC shall
be the five (5) directors identified in Schedule 6.9, who shall be elected by
consent in lieu of a special meeting of shareholders following the consummation
of the Purchase. The Board of Directors of GLNC shall, prior to the Effective
Date, appropriately adjust the number of seats on the board in the GLNC Bylaws,
if necessary.
7.6 Conduct of Business.
Upon consummation of the Purchase, the Board of Directors shall appoint the
following as officers and/or administrative consultants of GLNC:
Name: Position:
Xxxxx Xxxxxxx President
Xxxxxx Xxxxxx Vice President
Xxxxx Xxxx Secretary
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Xxxxxxx Xxxxx Administrative Consultant
Xxxxxxx Xxxxxxx Administrative Consultant
7.7 Operating Budget.
MMM acknowledges that GLNC has experienced operating losses and has a
working capital deficit. MMM agrees to deposit, prior to the Effective Date or
as soon as practicable thereafter, funds in the amount of $250,000 in cash
and/or marketable securities in account in the name of MMM for the exclusive use
in the ordinary course of business following the Effective Date.
7.8 Operations
If within six (6) months following the Effective Date, MMM has not
commenced operations of any Internet or other business set forth in the MMM
business plan, attached hereto as Exhibit B, GLNC shall have the option to
rescind this Agreement upon giving a written notice thereof within sixty (60)
days of the expiration of said six (6) months period. Should GLNC exercise such
option, MMM shall be liable for all debts, obligations and expenses incurred by
MMM following the Effective Date of this Agreement through the effective date of
such rescission, and agrees to indemnify GLNC, its officers, directors,
attorneys, agents and shareholders free and harmless from all such debts and
expenses, including but not limited to all attorney fees and costs incurred by
such indemnified parties and relating to such rescission and indemnification.
7.9 SEC Reports.
MMM acknowledges that GLNC is not a reporting company and has not filed
current audited financial statements and necessary forms with SEC, and has been
scheduled to be suspended by NASD from the Bulletin Board, where it has been
listed and trading, on December 1, 1999. Upon consummation of the Purchase, MMM
agrees to file the Form 10SB required by SEC and NASD, including audited
financial statements of GLNC and MMM, within sixty (60) days following the
Effective Date. In the event that MMM has not made such required filing within
sixty (60) days following the Effective Date, GLNC reserves the right to rescind
this Agreement for thirty (30) days without incurring any liability to MMM,
unless the delay is caused directly by GLNC's inability to produce required
financial and/or legal records, documents and other information to the
satisfaction of a mutually agreed upon accountant expected to audit GLNC's
financial statements and provide an adequate opinion.
7.10 Stock Split.
Upon consummation of the Purchase, the Board of Directors of GLNC shall be
prevented from voting on, agreeing to and/or instituting a stock split related
to any capital stock of GLNC for a period of at least ninety (90) days following
the Effective Date. Following such period, the Board of Directors decision to
effectuate any stock split, including a reverse stock split of the Common Stock
of GLNC, shall be restricted by a requirement of a unanimous vote, for a period
of another 90 days.
7.11 GLNC Control Shareholder Shares
Upon consummation of the purchase, the GLNC Control Shareholder agrees not
to sell, assign or transfer any GLNC Control Shares, whether publicly or in a
private transaction, other than under provisions set forth in Section 7.4, for a
period of three (3) months following the Effective Date.
7.12 Code Requirements
All persons, including but not limited to MMM Participants who shall
receive shares under this Agreement shall fully comply with all California
Securities Code requirements relating to the within transaction.
SECTION 8 TERMINATION OF OBLIGATIONS AND WAIVERS OF CONDITIONS; PAYMENT OF
EXPENSES
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8.1 Termination of Agreement and Abandonment of Purchase.
Anything herein to the contrary notwithstanding, this Agreement and the
Purchase contemplated hereby may be terminated, whether before or after approval
of this Agreement by GLNC and/or MMM, as follows, and in no other manner:
A. Mutual Consent. By mutual consent of the Boards of Directors of GLNC and
MMM.
B. Expiration Date. By the Boards of Directors of GLNC or MMM, if the
respective representations in Section 2 and Section 3 have not been fulfilled
within thirty (30) days of the Effective Date, which date may be extended by
mutual agreement of the Boards of Directors of GLNC and MMM.
C. SEC Filing Delay. By the Board of Directors of GLNC in accordance with
Section 7.8.
8.2 Payment of Expenses; Waiver of Conditions.
In the event that this Agreement shall be terminated pursuant to Section
8.1, all obligations of the parties under this Agreement shall terminate and
there shall be no liability of any party to the other. Each party hereto will
pay all costs and expenses incident to its negotiation and preparation of this
Agreement and to its performance of and compliance with all agreements and
conditions contained herein or therein on its part to be performed or complied
with, including the fees, expenses and disbursements of its counsel; provided
that the obligations of MMM and GLNC contained in Sections 2.15 and 3.15 hereof,
and the confidentiality obligations of the parties contained Paragraph A of
Section 4.1 hereof, shall survive any such termination. If any of the conditions
specified in Section 5.1 hereof have not been satisfied, GLNC may nevertheless
at its election proceed with the transactions contemplated hereby and if any of
the conditions specified in Section 6.1 hereof has not been satisfied, MMM may
nevertheless at its election proceed with the transactions contemplated hereby.
Any such election to proceed shall be evidenced by a certificate executed on
behalf of the electing party by an authorized officer or representative. Upon
consummation of the Purchase shall be consummated, each party hereto will pay
all of its own costs and expenses in connection therewith.
SECTION 9 GENERAL
9.1 Amendments.
Subject to applicable law, this Agreement and any schedule, list or exhibit
attached hereto may be amended only by an instrument in writing signed by an
officer or authorized representative of each of the parties hereto upon
authorization by the Board of Directors of GLNC or MMM before or after the
meeting of shareholders referred to in Section 7.1 hereof, except that no such
amendment shall affect the rate of exchange provided for in this Agreement. 9.2
No Assignment.
This Agreement may not be assigned by either party, by operation of law or
otherwise.
9.3 Survival of Representations and Warranties.
All the respective representations and warranties of GLNC and MMM contained
herein shall survive the Closing.
9.4 Governing Law.
Except where the laws of another jurisdiction are mandatorily applicable,
this Agreement and the legal relations among the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.
9.5 Notices.
21
Any notice or other communications required or permitted hereunder shall be
sufficiently given if sent by registered mail or certified mail, postage prepaid
and addressed as follows:
If to GLNC, to:
Xxxxxx X. Xxxxxxxx, President
Glenhills Corp.
00000 Xxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
If to MMM, to:
Xxxxx Xxxx, Director
Millennium Multi Xxxxx.xxx Corp.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
With copies to:
---------------------
---------------------
---------------------
---------------------
9.6 Headings.
The descriptive headings of the sections and subsections of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
9.7 Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement.
9.8 Reliance Upon.
Representations and Warranties. Notwithstanding any right of any party hereto to
fully investigate the affairs of any other party, the parties hereto may rely
upon the representations, warranties and covenants made to it in this Agreement
and on the accuracy of any certificate, any schedule attached hereto
(collectively the "Disclosure Schedules"), exhibits or other document given or
delivered to it pursuant to this Agreement. Further, knowledge by an agent of
any party hereto of any facts not otherwise disclosed in this Agreement, the
Disclosure Schedules or any other Purchase Documents, shall not constitute a
defense to any claim for misrepresentation, breach of any warranty, agreement,
or covenant under this Agreement, the Disclosure Schedules or any other Purchase
Documents. No representations or warranties have been made by or on behalf of
any person to induce any party to enter into this Agreement or to abide by or
consummate the transactions contemplated by this Agreement, except
representations and warranties expressly set forth herein, in the Disclosure
Schedules or in any other Purchase Documents.
22
9.9 Waiver
No purported waiver by any party of any default by any other party of any
term, covenant or condition contained herein shall be deemed to be a waiver of
such term, covenant or condition unless the waiver is in writing and signed by
the waiving party. No such waiver shall in any event be deemed a waiver of any
subsequent default under the same or any other term, covenant or condition
contained herein.
9.10 Entire Agreement.
This Agreement, together with the schedules attached hereto and any
certificate, exhibit or other document given or delivered pursuant hereto, sets
forth the entire understanding among the parties concerning the subject matter
of this Agreement and incorporates all prior negotiations and understandings.
There are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them relating to the subject matter of this
Agreement other than those set forth herein. No alteration, amendment, change or
addition to this Agreement shall be binding upon any party unless in writing and
signed by the party to be charged.
9.11 No Partnership.
Nothing contained in this Agreement will be deemed or construed by the
parties hereto or by any third person to create the relationship of principal
and agent or partnership or joint venture.
9.12 Partial Invalidity.
If any term, covenant or condition in this Agreement or the application
thereof to any person, party or circumstance shall be invalid or unenforceable,
the remainder of this Agreement or the application of such term, covenant or
condition to persons or circumstances, other than those as to which it is held
invalid, shall be unaffected thereby and each term, covenant or condition of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.
9.13 Joint Preparation.
This Agreement is to be deemed to have been prepared jointly by the parties
hereto and any uncertainty or ambiguity existing herein, if any, shall not be
interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arm's length agreements.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their authorized officers as of the date and year first above
written.
Signed by:
/s/ XXXXXX XXXXXX /s/ XXX XXXXXXXX
------------------------------ ------------------------------
Millennium XxxxxXxxxx.xxx Corp. Xxxxxxxx Management Services
Name: Xxxxxx Xxxxxx Name: Xxxxxx Xxxxxxxx
------------------------- -------------------------
Position: Director Position: Partner
--------------------- ---------------------
/s/ XXXXXX XXXXXXXX /s/ XXXXXX XXXXXXXXXX
------------------------------ ------------------------------
23
Glenhills Corp. Technical Management Consultants
Name: Xxxxxx Xxxxxxxx Name: Xxxxxx Xxxxxxxxxx
------------------------- -------------------------
Position: President Position: President
--------------------- ---------------------
SCHEDULE 1.2
GLNC New Shares Distribution to MMM Shareholders
The distribution of the 64,870,600 shares of GLNC Common Stock will be
designated by the Board of Directors upon consummation of the Purchase.
SCHEDULE 1.3
Finders' Fee Distribution
Total Number of Number of Shares by Individual TMC Participants
Shares to TMC
Participants The Stuckelman Compound Capital The World Wide Tytus
Family Trust Group Web Store Biniakiewicz
3,613,951 2,565,905 578,232 361,395 108,419
SCHEDULE 2.1
GLNC Qualifications; Corporate Standing
GLNC is qualified as a foreign corporation in the State of California.
SCHEDULE 2.2
Outstanding Dilutive GLNC Securities
A. GLNC has the following issued and outstanding options to purchase an
aggregate total of 620,000 shares of GLNC Common Stock by the parties and under
the terms specified below:
24
Party Name Number of Shares Expiration Date Exercise Price Per Share
The Greenfield Family 250,000 Dec. 31, 2004 $0.005
Trust
The Xxxxxx Family Trust 250,000 Dec. 31, 2004 $0.005
Xxx Xxxxxxx 45,000 Oct. 14, 2004 $0.005
Xxx Xxxxxxx 75,000 Oct. 14, 2004 $1.00
B. GLNC is required to issue an aggregate total of 240,000 shares of GLNC
Common Stock as compensation earned prior to the Effective Date for performing
services and duties of the Directors of GLNC, which shall be issued upon the
consummation of the Purchase to the parties specified below:
Party Name Number of Shares
Xxxxxx X. Xxxxxxxx 120,000
Xxxxxx Xxxxxx 60,000
Xxx Xxxxxxx 60,000
C. GLNC has advised MMM that 1,388,120 shares of GLNC Common Stock,
consisting of amounts issued to parties indicated below ("GLNC Cancelled
Shares"), and included in the total issued and outstanding number of shares of
GLNC Common Stock indicated in a statement of shareholders provided by the
transfer agent dated December 3, 1999, should be considered cancelled based on
agreements executed with the parties to such effect. In addition, GLNC has
advised MMM that 3,500,000 shares of GLNC Common Stock issued to Sterling & Co.
(the "Sterling Shares") and included in the total issued and outstanding number
of shares of GLNC Common Stock indicated in a statement of shareholders provided
by the transfer agent dated December 3, 1999, should also be cancelled. GLNC has
advised MMM that legal action against said parties must be initiated to effect
cancellation and recover certificates of GLNC Cancelled Shares and Sterling
Shares, and that GLNC will cooperate in the prosecution of said actions by MMM.
GLNC represents that neither the GLNC Cancelled Shares nor Sterling Shares have
been duly authorized, validly issued and GLNC has not been paid any
consideration for issuing any of the GLNC Cancelled Shares or Sterling Shares.
For the purposes of this Purchase, the provisions of this Agreement shall be
assumed to include the Sterling Shares and exclude the GLNC Cancelled Shares,
respectively, in or from the total number of issued and outstanding shares of
Common Stock of GLNC (the "GLNC Pre-Merger Shares"), including calculations in
Section 1.2 and 1.3. In the event that any resulting legal action or dispute in
the future is resolved against the representation of GLNC with respect to the
GLNC Cancelled Shares and any of the GLNC Cancelled Shares are deemed duly
authorized, validly issued, fully paid and/or non-assessable, the consideration
set forth in Section 1.2 and Section 1.3 shall be adjusted and paid out to MMM
immediately according to a recalculated number of the GLNC Pre-Merger Shares,
which is to include any such GLNC Cancelled Shares deemed duly authorized,
validly issued, fully paid and/or non-assessable. In the event that any
resulting legal action or dispute in the future is resolved according to the
representation of GLNC with respect to the Sterling Shares and any of the
Sterling Shares are deemed not duly authorized, not validly issued and fully
paid for, GLNC shall issue and pay out proportionately to all shareholders of
Common Stock of GLNC owning stock immediately prior to the Effective Date a
number of GLNC New Shares to be determined according to the provisions of
Section 1.2 and Section 1.3, in order to adjust for these provisions.
25
GLNC Cancelled Shares
Party Number of Shares Certificate No.
Xxxxxxx Xxxxxx 1,357,575 6229
Xxxx Xxxxxxx 30,545 6231
SCHEDULE 2.6
GLNC Names, Patents and Trademarks
Southern California Interviewing Services and SCIS are fictitious business
names of Access Research Group (Fictitious Business Name Patent filed with Los
Angeles County Recorder).
SCHEDULE 2.7
GLNC Tax and Other Returns and Reports
GLNC has the following unsettled past due tax liabilities, which shall come
under the indemnification and security provisions in Section 7.4.
State of California Corporate Franchise Tax $4,369.82
State of California Corporate Franchise Tax $152.00
State of Utah Corporate Franchise Tax $134.00
SCHEDULE 2.8
GLNC Agreements, Contracts and Commitments
A. Wall Street Marketing Investor Relations Contract
B. Sycamore Financial Advisors Executive Services Agreement dated October
18, 1999 Sycamore Financial Advisors is a fictitious name for Xxx Xxxxxxx, a
Director of GLNC.
X. Xxxxxxxx Management Services ("GLNC Control Shareholder") Executive
Services Agreement dated March 20, 1998
26
An Executive Services Agreement between GLNC (formerly DHS Industries,
Inc.) and Xxxxxxxx Management Services (the GLNC Control Shareholder) has been
terminated as of the Effective Date by mutual consent of both parties in
accordance with its provisions. In consideration of the consent for termination
of Xxxxxxxx Management Services, GLNC will sign a consulting agreement with
Canby Corp., a Nevada corporation with offices and a principal place of business
at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000, as set
forth in Exhibit A.
SCHEDULE 2.9
GLNC Title to Properties: Liens and Encumbrances
None.
SCHEDULE 2.11
Litigation
GLNC is a party in a Superior Court of Los Angeles case # LC044679, XxXxxxx
vs. DHS Industries, filed by Xxxxxx Xxxxxxx XxXxxxx, a former employee. A
judgement of $20,001.17, plus interest, plus other costs, has been stipulated by
the court, with payments starting January 5th, 1998.
SCHEDULE 2.17
GLNC Insurance
None.
SCHEDULE 3.2
Outstanding Dilutive MMM Securities
None.
SCHEDULE 3.6
MMM Names, Patents and Trademarks
MMM is in the process of applying for a patent protecting its corporate name.
SCHEDULE 3.8
27
MMM Agreements, Contracts and Commitments
A. MMM has received a Letter of Intent from GAIA, LLC, set forth in Exhibit
C, to acquire equity interest in GAIA, LLC, a real estate development project in
Las Vegas.
B. Letters of Agreement between MMM and Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxx,
Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx. SCHEDULE 3.9
MMM Title to Properties: Liens and Encumbrances
None.
SCHEDULE 3.17
MMM Insurance
MMM has recently requested and received a quote on a Directors Errors and
Omissions Policy from MDM & Associates, an insurance agent located at 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, which is currently under
evaluation of the management.
SCHEDULE 6.9
Board of Directors Members
Xxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxxxx
EXHIBIT A
Canby Corp. Consulting Agreement
PROFESSIONAL SERVICES AGREEMENT
28
This agreement is made and entered into this 30tlh day of December, 1999 by
and between Millennium Multi Media Corp. (MMM), a Delaware corporation with
offices and principal place of business at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxx Xxxxx Xxxxxxxxxx 00000 ("Client") and Canby Corp.(CC), a Nevada
corporation with offices and a principal place of business at 00000 Xxxxxxx
Xxxxxxxxx. Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000 ("Consultant").
1. Qualifications: Consultant has skill and experience in certain fields
of activity in which the Client is interested. Said
fields of activity are identified as financial
consulting, mergers and acquisitions.
2. Hiring: Client hereby engages the nonexclusive services of
Consultant and Consultant hereby accepts such
engagement in the above fields of activity.
Consultant will report to and take instructions from
Xxxxx Xxxx, Executive Director of the Client company,
MMM.
3. Duties: The primary duties of Consultant will be to provide
financial consulting services and present various
merger and/or acquisition candidates to Client.
Consultant will determine the method, details and
means of performing said duties.
4. Term: The term of this Agreement shall commence as of the
date of this Agreement for a period of (1) year and
shall be non-cancelable.
5. Compensation: The Client shall pay to Consultant a fee of Twenty Five
Thousand Dollars ($25,000.00) payable Twenty Five
Hundred ($2,500.00) per month commencing January 15,
2000 and continuing on the 15th day of each month
thereafter for ten months. Client grants to Consultant
or its assignee, an option to acquire 200,000 shares of
capital stock of MMM at the quoted bid price of
Glenhills Corporation as of the date of execution of
this Agreement, to wit: $0.13. Said option shall be
transferable and will expire ten (10) months from the
date of execution hereof and may be exercised in whole
or in several parts at the option of Consultant or its
transferee.
6. Devotion of Time: Consultant shall devote reasonable and adequate time to
accomplish those various duties requested by the Client
under and shall carry out said duties to the
satisfaction of the Client.
7. Warranties: Consultant represents and warrants that it has the
right to enter into this Agreement and to render
services to Client.
8. Confidentiality: Consultant may be given access to certain proprietary
information, including trade secrets of Client.
Consultant agrees to preserve in strict confidence all
such information during the term of this agreement and
for so long as the information received is not in the
public domain. Consultant will not disclose this
information except as directed.
9. Independent
Contractor: Consultant and his employees and associates are at all
times and performing hereunder as independent
contractor(s) and not as a Client employee(s).
Consultant agrees to perform those services with the
standard of care, skill and diligence normally provided
by a professional person in the performance of such
services.
10. Compliance With
Applicable Laws: In the performance of Consultant's services it shall
comply with all applicable laws of the jurisdiction in
which the services are performed.
29
11. Arbitration: In the event that a dispute arises, the parties do
hereby agree to settle any such dispute by arbitration
conducted through the American Arbitration Association
to be held in Los Angeles, California. Such decision of
the arbitration shall be final and binding on all
parties.
12. Entire Agreement: This document represents the complete agreement between
the parties and may be modified or amended only by a
duly executed written agreement. This agreement shall
be construed in accordance with the laws of the State
of California, which shall also be the venue and \
jurisdiction of any disputes between the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as
of the day and year noted above.
Millennium Multi Xxxxx.xxx Corp. Canby Corp.
/s/ Xxxxx Xxxx /s/ Xxx Xxxxxxxx
Secretary President
EXHIBIT B
MMM Business Plan
Overview
Millennium Multi Xxxxx.xxx Corp. (MMM) is a modern Internet entertainment
company embracing traditional and digital communication modes to provide a new
age of entertainment content to consumers in the United States and around the
world. MMM is taking advantage of three powerful trends - demographics,
globalization and technology - to establish and maintain its status as an
entertainment industry innovator. At a time when traditional distinctions
between various entertainment segments are blurring, MMM capitalizes on its
wealth of managerial expertise in the industry and its affiliations with leading
media corporations to advance the transformation of the global entertainment
market. Entertainment industry covers all formats of recorded music and filmed
entertainment, which includes movies and series television programming.
Worldwide demand for U.S. entertainment is vigorous and continues to grow at
double-digit rates domestically, and even faster abroad. Recently, technology
developments such as the Internet have led to greater access by consumers to a
wide variety of entertainment products and services. In fact, many industry
insiders and observers, including the Motion Picture Association of America
(MPAA), believe that within a decade the Internet will play a major role in
delivering filmed entertainment and recorded music to homes all around the
world.
Market Opportunity
United States producers lead the world's entertainment industry without
dispute. Demand for U.S. entertainment, both domestically and in foreign
markets, is very vigorous and is likely to continue growing. The industry also
benefits from continual technological advancements, which offer new
opportunities for entertainment distribution. For example, at the same time that
the videocassette and cable television markets have been reaching maturity, the
Internet is offering new possibilities as a delivery system for entertainment
programming.
30
The size of the industry is already enormous. Domestically, the box office
ticket sales totaled $6.9 billion in 1998, with 1.48 billion tickets sold - the
highest level in more than 40 years. In addition, it is estimated that U.S.
consumers spent $9.5 billion on video rentals and another $8 billion on the
purchase of videotapes and videodisks.
In many foreign markets U.S. films have acquired a share of box office
receipts equal to or higher than that of domestic films and the home video
sector is still growing at a fast pace. In the long term, international markets
should continue to be a growth engine for U.S. entertainment companies.
According to the Bureau of Economic Analysis of the U.S. Department of Commerce,
the total sales of filmed entertainment to foreign buyers surpassed $14 billion
in 1996. Predictions for year 2003 are $26.6 billion.
The International Federation of the Phonographic Industry, an international
trade association based in London, estimated that in 1998 total recorded music
sales worldwide surpassed $40.0 billion, of which U.S. produced albums
constituted about 50%, with over $12 billion sold domestically and about $8
million in foreign markets. Industry observers and prominent research firms,
such as Xxxxxxxxx Research, estimate that a significant portion of these
revenues will be attained through the Internet in the future, reaching 7.5
percent of total sales, or $1 billion, by 2002.
Merchandising related to both the movie and music sectors offers an additional
and virtually unlimited revenue potential.
Company
Millennium Multi Media is an Internet entertainment company combining years
of executive experience in film, music production and other entertainment
content development with the technology of the Internet.
MMM capitalizes on the tremendous wealth of industry experience among its
management team members, the most salient factor determining the ability of
smaller producers to join the ranks of successful entertainment companies.
Through its affiliations within the industry, MMM will produce and distribute
entertainment content in the filmed programming and recorded music sectors, as
well as facilitate other projects utilizing relationships with leading companies
in the industry. MMM's activities will also include related entertainment
merchandising of licensed and self-generated products and special direct
response marketing services.
MMM strategy will focus on development of filmed and music projects, and
creative distribution of entertainment content emphasizing the World Wide Web as
the delivery medium. The basis for MMM's success will be a multifunctional
entertainment auction Web Site, which is currently being developed by MMM's
programmers. The Web Site will serve as an excellent channel for marketing and
distribution of entertainment products and services, including merchandise. The
unique features of the Web Site include special direct response marketing
capabilities based on concepts developed by the merchandising experts within
MMM's management team. MMM has already received overwhelming interest from major
Los Angeles area studios in the marketing services provided by this unrivaled
Web Site feature.
ORGANIZATIONAL STRUCTURE
MMM is divided into content profit centers, based on the nature of products
and services. All three business units will be operated and distributed through
corresponding e-commerce Web Sites.
Movies
The film business unit will focus on production of filmed entertainment,
including feature movies and television programming, designed for domestic and
international distribution through all available traditional channels, as well
as the Internet.
31
Music
The music business unit will focus on discovery and development of new
artist talent, as well as production and distribution of recorded music in
traditional formats and the Internet.
Merchandising
The merchandising business unit will concentrate on the operation of the
entertainment auction Internet Web Site, including direct response marketing
services provided to major production studios, as well as licensing, development
and marketing of entertainment related merchandise.
MANAGEMENT
Xxxxx Xxxx
Xxxxx Xxxx has over 20 years of experience in developing and managing
financial and real estate assets. Xx. Xxxx was Vice President, Syndication of
American Development Corp. In this capacity, he was responsible for the
interfacing of company syndication products with the corporate finance
departments of firms including Xxxxxxx Xxxxx, Xxxx Witter, Shearson, American
Express and Xxxxxx Peabody. During Xx. Xxxx'x tenure, American Development Corp.
became the third largest developer in the United States with more than $2
billion in assets and average annual syndication equity raised of $190 million.
Xx. Xxxx'x other experience includes extensive involvement in the banking and
insurance industries through affiliations with American Diversified Savings and
Loan and American Pacific Insurance Company.
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx' career in the entertainment business has spanned 35 years. He has
been a successful record executive, film producer, music publisher and personal
manager, handling the careers of successful artists such as The Mama's and The
Xxxx'x, Xxx-Xxxxxxx, Mama Xxxx Xxxxxxx, Xxxx Xxxx, Xxxxxxx Xxxxx, Steppenwolf,
and Jan & Xxxx. He began in the 50's as a member of the internationally known
dance act, the Dunhills, which was affiliated with and worked all over the world
with Xxxxx Xxxx and Xxxxxx Xxxxx. In the 60's, Xx. Xxxxxxx co-founded Dunhill
Records with Xxx Xxxxx. The company's first discovery was The Mamas and The
Papa's. Other artists to succeed on the Dunhill label included Three Dog Night,
Steppenwolf, Xxxxxx Xxxxxx and Mama Xxxx Xxxxxxx. Thereafter, Xx. Xxxxxxx formed
Xxxxxxx-Xxxxxxx Productions with Xxx Xxxxxxx and produced many successful motion
pictures, the first being the MGM production Gypsy Moths, starring Xxxx
Xxxxxxxxx and Xxxxxxx Xxxx. Films that followed included Xxxxx Xxxxx with Xxx
Xxxxxx and Xxxx Xxxxxxx, The Hot Rock, starring Xxxxxx Xxxxxxx and Xxxx Xxxxxx
and the huge box office success Death Wish starring Xxxxxxx Xxxxxxx, as well as
the first sequel Death Wish II. Xx. Xxxxxxx was also President of the Lorimar
Music Group. Lorimar was responsible for Dallas, Xxxxx'x Landing and many other
successful television shows. Xx. Xxxxxxx recently produced the critically
acclaimed theatrical show "Xxxx Xxxx'x America", which enjoyed huge success both
in New York and Los Angeles. Currently Xx. Xxxxxxx is Chairman of the Board of
Santa Clarita Studios, Inc., which is a successful entertainment and media
company.
Xxxxxxx X. Xxxxx
For the past 20 years, Xxxxxxx X. Xxxxx has been a successful key executive in
the Entertainment/Communications Industry. During this time he has also been
Chairman and Chief Executive Officer of Xxxxx Communications, Inc., an
international consulting firm providing professional management, consulting,
business development and financial services; specializing in strategic alliances
in the multimedia, technology, medical, broadcasting, entertainment, and
communications fields. In this capacity, Xx. Xxxxx is very active in the
international marketplace and represents a number of companies in the Far East,
South America, as well as Eastern and Western Europe. Xx. Xxxxx has been
instrumental in securing public and private corporate financing, domestic and
international distribution, mergers and acquisitions and the production
32
and financing of motion pictures. He has also served in executive roles for
Fortune 500, real estate, and entertainment companies and has executive produced
a number of feature films.
Xx. Xxxxx has been President and CEO/COO of the following companies:
Lucasfilm, Ltd.: As President and Chief Executive Officer of Xxxxxx Xxxxx'
company, Xx. Xxxxx was responsible for all aspects of the company's operations,
including international operations, financing, negotiations, production,
licensing, merchandising, Industrial Light and Magic and THX. He was also
involved in the making of: The Empire Strikes Back, Raiders Of The Lost Ark, and
More American Graffiti.
Embassy Communications: As President and Chief Operating Officer of Xxxxxx
Xxxx'x and Xxxxx Xxxxxxxxx'x company, Xx. Xxxxx was involved in corporate
development, television and motion picture production and international and
domestic distribution, cable operations, pay television services and Hispanic
broadcast stations. He was also involved in the making of Blade Runner.
Entertainment Company of America (ECA): As President and Chief Executive
Officer, Xx. Xxxxx has led ECA's early involvement in the development of
interactive in-flight systems, developing the distribution and technical
expertise to support in-flight audio/video games, merchandising, communications
and gaming requirements on aircraft.
CanWest International Corp.: As President and Chief Executive Officer, Xx.
Xxxxx'x primary responsibility was the development and acquisition of companies
and strategic investments to add to CanWest Global Communications Corporation's
television interests outside of Canada. Xx. Xxxxx was instrumental in the
acquisition and investigation of broadcast properties in Eastern Europe, South
America and the Far East.
Prior to his involvement in the entertainment industry, Xx. Xxxxx had
extensive experience in real estate and with Fortune 500 companies. He was a
Senior Vice President of Xxxxxxxxxxx-Xxxxxxx Corporation of California, as well
as being employed in an executive capacity by other real estate development and
syndication companies. Before relocating to Los Angeles in 1972, Xx. Xxxxx
worked for the Celanese Corporation and General Motors Overseas Operations in
New York City.
33
Xx. Xxxxx is a member of The Academy of Motion Pictures Arts and Sciences
and The Academy of Television Arts and Sciences. Xx. Xxxxx is a graduate of
Manhattan College, where he received a Bachelor of Business Administration
degree and went on to earn a Master's degree in Business Administration from
Hofstra University.
Sample Production Accomplishments:
FEATURE FILMS
CHIEF EXECUTIVE
OFFICER EMPIRE STRIKES BACK Lucasfilm Ltd/20th Century Fox
MORE AMERICAN GRAFFITI Lucasfilm Ltd/Universal
RAIDERS OF THE LOST ARK Lucasfilm Ltd/Paramount
EXECUTIVE IN CHARGE BLADE RUNNER Perenchio/Yorkin/Warner Brothers
BLUE SKIES AGAIN Angeles/Lantana/ Warner Brothers
SCANDALOUS Angdea/Lantana/ Orion
SWING SHIFT Angeles/Lantana/Warner Brothers
IRRECONCILABLE
DIFFERENCES Angeles/Lantana/Warner Brothers
EXECUTIVE PRODUCER CHILDREN OF THE CORN Angeles/New World
THE STONE BOY Angeles/20th Century Fox
BODY ROCK Angeles/New World
DEATH OF AN ANGEL Angeles/Sundance/ 20th Century Xxx
XXXX XXXX Xxxxxxx/Sundance/20th Century Fox
CHICAGO CAB KMI
WINNEBAGO WARRIORS
CONSULTANT FLIGHT OF THE NAVIGATOR New Star/Disney
LIVE SHOWS
EXECUTIVE PRODUCER XXXXX XXXXXXX MEETS XXXXX XXXXXX
XXXX XXXXXXX AT NHK SYMPHONY XXXX
Xxxxxxx Selsman
Xxxxxxx Xxxxxxx has a wealth of diverse experience in the entertainment
industry, working in public relations, film production, publishing and numerous
other environments. Xx. Xxxxxxx started his career as a public relations and
national publicity executive, working in New York City with 20th Century Fox and
later with
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Paramount Pictures. After moving to Los Angeles, he became an Account
Executive with the Xxxxxx X. Xxxxxx Company, the premiere entertainment public
relations firm, where he personally represented many well-known personalities,
including Xxxx Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx,
Xxxx and Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx XxXxx, Xxxxx Xxxxxxx, Xxxxxxxx Xxxxxx,
Xxxx Xxxxxx, and others. Subsequently, he joined Xxxxxx and Xxxxx Public
Relations, representing the Disneyland Hotel, Ambassador Oil, The Xxxxxxx Corp.,
owners of the Lassie franchise, Muzak, and others. Later in his career, Xx.
Xxxxxxx also represented authors such as Xxxxxx Xxxxxx, Xxxxxx Xxxx and others,
while working with famed literary agent, Xxxxxx Xxxxx.
Xx. Xxxxxxx gained remarkable experience as a talent agent with Artists
Agency Corporation, now ICM, participating in television packaging with the
agency's client, Xxxx Xxxxxx Productions. In-house shows included "Xxx Xxxxx",
"Medic", and "Xxxxx'x Heroes." He was also involved in the early career
development of Xxxxx Xxxxxx, Xxxx Xxxxx, and Xxxxxx Xxxxxxx.
As the President of Group Three, Xx. Xxxxxxx co-produced the feature film,
"Dirty Xxxxxx Xxxxx", distributed by Columbia Pictures, and also developed "Bury
My Heart at Wounded Knee" by Xxx Xxxxx, "World Without End, Amen" by Xxxxx
Xxxxxxx, "I, Robot" by Xxxxx Xxxxxx, and "The Fortunate Pilgrim" by Xxxxx Xxxx.
Selsman and film director Xxxxxxx X. Xxxxxx also collaborated with American
International Pictures to produce several films on far locations, including
"Winterhawk" in Montana, "Bootleggers" in Texas and Arkansas, "The Norseman" in
Florida, and "Grey Eagle" in Wyoming and Colorado.
In addition, Xx. Xxxxxxx worked with Xxxxx Xxxxxx preparing a film about
the assassination of Xxxxxx Xxxxxxx and co-produced the feature film "Gotcha,"
which was distributed by Universal, as well as developing 18 other feature film
and television projects working for MGM.
As a professional writer, Xx. Xxxxxxx wrote the screenplay for his original
feature film idea, "Getting Even With Xxxxxx" for Hemdale Pictures Corp. He has
also been employed as a writer by MGM Studios, Xxxxxx Xxxxx International, New
World Pictures, Brilliant Digital Entertainment, and others.
Xx. Xxxxxxx also worked for Xxxxxx Xxxxxxx, Jr. at Goldwyn Studios as Vice
President of Creative Affairs, headed the literary department at Preferred
Artists Agency in Xxxxxxx Hills, and co-founded and was Vice President of
Affiliate Relations for Transcontinental Television Network, a new 24-hour
satellite-fed UHF program source located at Glendale Studios. In addition, he
oversaw national marketing and promotion of the Los Angeles Clippers NBA
basketball franchise working for two seasons for Xxxxxx X. Xxxxxxxx as Vice
President of Corporate Affairs, and managed marketing and advertising for Xxxx
Xxxxx as Corporate Vice President of the California's largest privately-held
real estate company.
Xx. Xxxxxxx is considered an expert source on international entertainment
and has been quoted in such publications as Time, Newsweek, TV Guide, and in
various newspapers and books on the subjects of contracts and changing mores and
social values in the media. He has also appeared on national and international
television programs, commenting on Hollywood studio history, and has appeared as
an expert witness in court and for various Hollywood guilds. He has also
guest-lectured at schools and universities such as UCLA, USC, Pepperdine,
Middlebury, VT., Westlake School, Mount St. Mary's and Loyola.
Xxxxx Xxxxxx
Xxxxx Xxxxxx earned his Bachelor Degree in Business Administration and
Accounting from the University of California at Los Angeles (UCLA). He has over
twenty years experience as an entertainment industry executive, music publisher
and record producer. Xx. Xxxxxx served as President of an international music
publishing company. He directed the record production activities for Lorimar. In
addition, Xx. Xxxxxx has produced for other major record labels. Xx. Xxxxxx
founded PEC Services, which specialized in motion picture film distribution,
postproduction services and fulfillment services. His clientele included all of
the Xxxx Disney Companies, including Touchstone Pictures, Hollywood Pictures,
Buena Vista Worldwide, Hollywood Records,
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Buena Vista Music Publishing, Xxxxx Xxxxxxxx Productions, Sony / Tristar /
Columbia Pictures as well as Lorimar, ABC, NBC, and numerous independent
companies. Recently, Xx. Xxxxxx has produced the critically acclaimed theatrical
show "Xxxx Xxxx'x America" which enjoyed huge success both in New York and Los
Angeles. Xx. Xxxxxx is currently President of Santa Clarita Studios, Inc., a
successful entertainment and media company.
Xxx Xxxxx
Xxx Xxxxx has served for over 15 years in senior level management positions
in the marketing, distribution and the retail industries. Most recently, as Vice
President of Direct Response Marketing for Real Entertainment, Xx. Xxxxx managed
the most successful direct response campaign of 1998, the Xxxxx Xxxxxxxx Too Hot
For TV Videos. This direct marketing campaign generated over 60 million dollars
in revenue for videos and related merchandise, and helped build Xxxxx Xxxxxxxx
into a nationally recognized brand.
Prior to Real Entertainment, Xx. Xxxxx served as Director of Distribution
for Technicolor Video, the largest video duplicator in the world. During his
5-year tenure at Technicolor, he headed their direct to retail division,
servicing such prestigious clients such as Disney and Warner Brothers, with his
staff of over 500 employees. In 1996 Xxxxx was named Technicolor Employee of the
Year from among 2000 employees.
Prior to Technicolor, Xx. Xxxxx was Director of Fulfillment Services for
Paramount Pictures, where he was responsible for licensing, product development,
telemarketing and fulfillment services. Xx. Xxxxx also served as Director of
Operations for Teleflora, one of the nation's, leading floral outlets.
Consulting stints with the Franklin Mint, one the world's largest
collectible catalogers, and the production of several of Xx. Xxxxx'x scripts for
Xxxxx Xxxxxxx children's TV shows punctuate his creative career. Xx. Xxxxx
graduated from the University of Oregon with a Journalism degree.
EXHIBIT C
GAIA Project Letter of Intent
Board of Directors
Millennium Multi Media. com Corp.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Gentlemen,
This letter is to express our intent to exchange 50% of our equity interest
in GAIA, LLC, a Nevada company, for shares in Millennium Multi Xxxxx.xxx Corp.,
subject to a definitive agreement to be negotiated and signed in the next six
(6) months.
/s/ Xxxx Xxxxxx
Xxxx Xxxxxx
36
Managing Member
GAIA, LLC
EXHIBIT D
Xxxxxx X. Xxxxxxxx Note for Xxxxx, Xxxxxx & Co. Liability
Promissory Note
----------------
$5,000.00 Beverly Hills, California November 4, 1999
One Hundred Eighty (180) days from date hereof, the undersigned Xxxxxxxx
Management Services promises to pay Millennium Multi Media Corporation at
Beverly Hills, California the sum of Five Thousand ($5,000.00) Dollars with no
interest.
This note shall be secured by fifty thousand (50,000) shares of common
stock of Glenhills Corporation. Said shares are owned by the undersigned
partnership and shall not be sold, transferred or hypothecated by the
undersigned until this note is paid in full. In the event this note is not paid
at its maturity, the undersigned shall have ten (10) days after said due date in
which to discharge this obligation by either selling said shares serving as
collateral hereunder, or otherwise discharging said note. Should the undersigned
fail to discharge said note, the payee shall sell said shares in satisfaction of
said obligation.
In the event the undersigned does discharge said note upon its maturity or
within said ten (10) day grace period, said shares shall be released by the
payee and shall no longer be subject to the terms hereof. The undersigned agrees
to execute such further documents as are required to document the security
arrangement set forth herein.
Xxxxxxxx Management Services
By: /s/ Xxx Xxxxxxxx
Partner
EXHIBIT E
Xxxxxxxx Management Note
Promissory Note
----------------
NOT TO EXCEED $85,000.00 Beverly Hills, California December 30, 1999
One year from date hereof, the undersigned Xxxxxxxx Management Services
promises to pay Millennium Multi Media Corporation at Beverly Hills, California
a sum Not To Exceed Eighty Five Thousand ($85,000.00) Dollars with no interest.
The specific sum to be paid pursuant to the terms of this note shall be
determined in
37
accordance with the terms of that certain Definitive Agreement by & between
Millennium Multi Xxxxx.xxx Corporation, Glenhills Corp. and Xxxxxxxx Management
Services dated December 30, 1999, and specifically paragraph 7.4 thereof.
This note shall be secured by three hundred forty thousand (340,000) shares
of common stock of Glenhills Corporation. Said shares are owned by the
undersigned partnership and shall not be sold, transferred or hypothecated by
the undersigned until this note is paid in full. In the event this note is not
paid at its maturity, the undersigned shall have ten (10) days after said due
date in which to discharge this obligation by either selling said shares serving
as collateral hereunder, or otherwise discharging said note. Should the
undersigned fail to discharge said note, the payee shall sell said shares in
satisfaction of said obligation.
In the event the undersigned does discharge said note upon its maturity or
within said ten (10) day grace period, said shares shall be released by the
payee and shall no longer be subject to the terms hereof.
The undersigned agrees to execute such further documents as are required to
document the security arrangement set forth herein.
Xxxxxxxx Management Services
By: /s/ Xxx Xxxxxxxx
Partner
38
