UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington
D.C., 20549
FORM
10-Q/A
[X] Quarterly
Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
For the
quarterly period ended March 31, 2008
[
] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act
(Mark
One)
Commission
File No. 001-16381
INTEGRATED
MEDIA HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
Doing
Business As
ARRAYIT
COMPANY
|
Delaware
|
76-0600966
|
|
(State
of other jurisdiction of incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
524
East Weddell Drive
Sunnyvale,
CA
|
94089
|
|
(Address
of Principal Executive Office)
|
(Zip
Code)
|
Registrant’s telephone number,
including area code: (408) 744-1331
Securities registered pursuant to
Section 12 (b) of the Act: NONE
Securities registered pursuant to
Section 12 (g) of the Act: Common Stock $0.001 par value
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes þ No
[]
APPLICABLE
ONLY TO CORPORATE ISSUERS
The
number of shares of the issuer’s common equity outstanding as of October 3,
2008 was approximately 16,419,262 shares of common stock, par
value $.001.
Transitional
Small Business Disclosure Format: Yes [] No þ
EXPLANATORY
NOTE
Integrated
Media Holdings, Inc.. (“IMHI”, the “Company,” “we,” “us,” or “our”) is filing
this Form 10-Q/A (the “Amended Report”) to its Quarterly Report on Form 10-QSB
for its quarterly period ended March 31, 2008, originally filed with the US
Securities and Exchange Commission (“SEC”) on May 20, 2008 (the
“Original Filing”). This amendment is filed for the sole purpose of including
the following:
|
·
|
Agreement
and Plan of Merger among Integrated Media Holdings, Inc. (a Delaware
corporation), TCI Acquisition Corp. (a Nevada corporation), Telechem
International, Inc. (a Delaware corporation) and the Shareholders of
Telechem International, Inc.,
|
|
·
|
Amendment
to Agreement and Plan of Merger by and among Integrated Media Holdings,
Inc., Telechem International, Inc., the Shareholders of Telechem
International, Inc., Endavo Media and Communications, Inc., and TCI
Acquisition Corp.
|
|
·
|
Certificate
of Designation of the Series C Convertible Preferred Stock,
and
|
|
·
|
Certificate
of Correction for the Certificate of Designation of the Series C
Convertible Preferred Stock.
|
Except as
discussed above and set forth in the Amended Report, we have not modified or
updated disclosures presented in the Original Filing. Accordingly, this Amended
Report does not reflect events occurring after our Original Filing or modify or
update those disclosures affected by subsequent events, except as specifically
referenced herein.
Exhibits
|
1.01
|
Agreement
and Plan of Merger among Integrated Media Holdings, Inc. (a Delaware
corporation), TCI Acquisition Corp. (a Nevada corporation), Telechem
International, Inc. (a Delaware corporation) and The Shareholders of
Telechem International, Inc.
|
|
1.02
|
Amendment
to Agreement and Plan of Merger by and among Integrated Media Holdings,
Inc., Telechem International, Inc., the Shareholders of Telechem
International, Inc., Endavo Media and Communications, Inc., and TCI
Acquisition Corp.
|
|
1.03
|
Certificate
of Designation of the Series C Convertible Preferred
Stock.
|
|
1.04
|
Certificate
of Correction for the Certificate of Designation of the Series C
Convertible Preferred Stock
|
|
|
|
Exhibit 1.01
Agreement
and Plan of Merger among Integrated Media Holdings, Inc. (a Delaware
corporation), TCI Acquisition Corp. (a Nevada corporation), Telechem
International, Inc. (a Delaware corporation) and The Shareholders of Telechem
International, Inc.
|
|
|
AGREEMENT
AND PLAN OF MERGER
among
INTEGRATED
MEDIA HOLDINGS, INC.
(a
Delaware corporation)
TCI
ACQUISITION CORP.
(a
Nevada corporation)
TELECHEM
INTERNATIONAL, INC.
(a
Delaware corporation)
and
THE
SHAREHOLDERS OF TELECHEM INTERNATIONAL, INC.
DATED
AS OF FEBRUARY 5, 2008
TABLE
OF CONTENTS
RECITALS [INSERT PAGE NUMBER]
ARTICLE
1 DEFINITIONS [INSERT PAGE
NUMBER]
ARTICLE 2. THE
MERGER [INSERT PAGE
NUMBER]
Section 2.01. Basic
Transaction [INSERT PAGE
NUMBER]
Section 2.02. Effective
Time; Closing [INSERT PAGE
NUMBER]
Section 2.03. Effect of the
Merger [INSERT PAGE
NUMBER]
Section 2.04. Certificate of
Incorporation; Bylaws [INSERT PAGE
NUMBER]
Section 2.05. Directors and
Officers [INSERT PAGE
NUMBER]
Section 2.06. Conversion of
Securities [INSERT PAGE
NUMBER]
Section 2.07. Exchange of
Certificates [INSERT PAGE
NUMBER]
Section 2.08. Stock Transfer
Books [INSERT PAGE NUMBER]
Section 2.09. Dissenting
Shares [INSERT PAGE
NUMBER]
Section 2.10. Stock
Options [INSERT PAGE
NUMBER]
Section 2.11. Transfer and
Divestiture of Endavo Media and Communications, Inc. [INSERT PAGE NUMBER]
ARTICLE 3 REPRESENTATIONS
AND WARRANTIES OF TELECHEM AND SHAREHOLDERS [INSERT PAGE NUMBER]
Section 3.01. Organization,
Qualification and Corporate Power [INSERT
PAGE NUMBER]
Section
3.02. Noncontravention [INSERT
PAGE NUMBER]
Section
3.03. Capitalization [INSERT
PAGE NUMBER]
Section 3.04. Brokers’
Fees [INSERT PAGE NUMBER]
Section 3.05. Title to
Assets [INSERT PAGE
NUMBER]
Section
3.06. Subsidiaries [INSERT PAGE
NUMBER]
Section 3.07. Financial
Statements [INSERT PAGE
NUMBER]
Section 3.08. Undisclosed
Liabilities [INSERT PAGE
NUMBER]
Section 3.09. Legal
Compliance [INSERT PAGE
NUMBER]
Section 3.10. Real
Property [INSERT PAGE
NUMBER]
Section 3.11. Tangible
Assets [INSERT PAGE
NUMBER]
Section 3.12. Powers of
Attorney [INSERT PAGE
NUMBER]
Section
3.13. Employees [INSERT PAGE
NUMBER]
Section
3.14. Guaranties [INSERT PAGE
NUMBER]
Section 3.15. Certain
Business Practices [INSERT PAGE
NUMBER]
Section 3.16. Parachute
Payments [INSERT PAGE
NUMBER]
Section 3.17. Information
Statement [INSERT PAGE
NUMBER]
Section 3.18. Environment,
Health, and Safety [INSERT PAGE
NUMBER]
Section
3.19. Disclosure [INSERT PAGE
NUMBER]
ARTICLE 4 REPRESENTATIONS
AND WARRANTIES CONCERNING INTEGRATED MEDIA AND ITS SUBSIDIARIES [INSERT PAGE NUMBER]
Section 4.01. Organization,
Qualification, and Corporate Power [INSERT
PAGE NUMBER]
Section
4.02. Capitalization [INSERT
PAGE NUMBER]
Section
4.03. Noncontravention [INSERT
PAGE NUMBER]
Section 4.04. Brokers’
Fees [INSERT PAGE NUMBER]
Section 4.05. Title to
Assets [INSERT PAGE
NUMBER]
Section
4.06. Subsidiaries [INSERT PAGE
NUMBER]
Section 4.07. SEC Filings,
Financial Statements [INSERT PAGE
NUMBER]
Section 4.08. Absence of
Certain Changes or Events [INSERT PAGE
NUMBER]
Section 4.09. Undisclosed
Liabilities [INSERT PAGE
NUMBER]
Section 4.10. Legal
Compliance [INSERT PAGE
NUMBER]
Section 4.11. Tax
Matters [INSERT PAGE
NUMBER]
Section 4.12. Real
Property [INSERT PAGE
NUMBER]
Section 4.13. Intellectual
Property [INSERT PAGE
NUMBER]
Section 4.14. Tangible
Assets [INSERT PAGE
NUMBER]
Section
4.15. Contracts [INSERT PAGE
NUMBER]
Section 4.16. Notes and
Accounts Receivable [INSERT PAGE
NUMBER]
Section 4.17. Powers of
Attorney [INSERT PAGE
NUMBER]
Section
4.18. Insurance [INSERT PAGE
NUMBER]
Section
4.19. Litigation [INSERT PAGE
NUMBER]
Section
4.20. Employees [INSERT PAGE
NUMBER]
Section 4.21. Employee
Benefits [INSERT PAGE
NUMBER]
Section
4.22. Guaranties [INSERT PAGE
NUMBER]
Section 4.23. Environment,
Health, and Safety [INSERT PAGE
NUMBER]
Section 4.24. Certain
Business Relationships With Integrated Media [INSERT PAGE NUMBER]
Section 4.25. Change of
Control [INSERT PAGE
NUMBER]
Section 4.26. Certain
Business Practices [INSERT PAGE
NUMBER]
Section 4.27. Parachute
Payments [INSERT PAGE
NUMBER]
Section
4.28. Disclosure [INSERT PAGE
NUMBER]
ARTICLE 5 PRE-CLOSING
COVENANTS [INSERT PAGE
NUMBER]
Section
5.01. General [INSERT PAGE
NUMBER]
Section 5.02. Notices and
Consents [INSERT PAGE
NUMBER]
Section 5.03. Operation of
Business [INSERT PAGE
NUMBER]
Section 5.04. Preservation
of Business [INSERT PAGE
NUMBER]
Section 5.05. Full
Access [INSERT PAGE
NUMBER]
Section 5.06. Notice of
Developments [INSERT PAGE
NUMBER]
Section
5.07. Exclusivity [INSERT PAGE
NUMBER]
Section 5.08. Filing of
Current Report on Form 8-K [INSERT PAGE
NUMBER]
Section 5.09. Information
Statement [INSERT PAGE
NUMBER]
Section 5.10. Section 16(b)
Board Approval [INSERT PAGE
NUMBER]
Section 5.11. Integrated
Media Reincorporation from Delaware to Nevada [INSERT PAGE NUMBER]
Section
5.12. Confidentiality [INSERT
PAGE NUMBER]
ARTICLE 6 POST-CLOSING
COVENANTS [INSERT PAGE
NUMBER]
Section
6.01. General [INSERT PAGE
NUMBER]
Section
6.02. Transition [INSERT PAGE
NUMBER]
Section 6.04. Obligations of
Shareholders [INSERT PAGE
NUMBER]
Section 6.05. Application to
Standard & Poor’s [INSERT PAGE
NUMBER]
Section 6.06. Filing of
Amended Form 8-K [INSERT PAGE
NUMBER]
Section 6.09. Agreement to
Deliver Shares [INSERT PAGE
NUMBER]
Section 6.08. Plan of
Exchange [INSERT PAGE
NUMBER]
Section 6.11. Board
of Directors of Integrated Media [INSERT PAGE NUMBER]
Section 6.12. Public
Announcements [INSERT PAGE
NUMBER]
Section 6.13. Conveyance
Taxes [INSERT PAGE NUMBER]
Section 6.14. Change of Name and Trading
Symbol [INSERT PAGE
NUMBER]
ARTICLE 7 CONDITIONS TO
OBLIGATION TO CLOSE [INSERT PAGE
NUMBER]
Section 7.01. Conditions to
Obligation of TeleChem [INSERT PAGE
NUMBER]
Section 7.02. Conditions to
Obligation of Integrated Media [INSERT PAGE
NUMBER]
ARTICLE
8. TERMINATION [INSERT PAGE
NUMBER]
Section
8.01. Termination [INSERT PAGE
NUMBER]
Section 8.02. Effect of
Termination [INSERT PAGE
NUMBER]
Section 8.03. Fees and
Expenses [INSERT PAGE
NUMBER]
ARTICLE
9 MISCELLANEOUS [INSERT PAGE
NUMBER]
Section 9.01. Press Releases
and Public Announcements [INSERT PAGE
NUMBER]
Section 9.02. No Third Party
Beneficiaries [INSERT PAGE
NUMBER]
Section 9.03. Entire
Agreement [INSERT PAGE
NUMBER]
Section 9.04. Succession and
Assignment [INSERT PAGE
NUMBER]
Section
9.05. Counterparts [INSERT PAGE
NUMBER]
Section
9.06. Headings [INSERT PAGE
NUMBER]
Section
9.07. Notices [INSERT PAGE
NUMBER]
Section 9.08. Governing
Law [INSERT PAGE NUMBER]
Section 9.09. Amendments and
Waivers [INSERT PAGE
NUMBER]
Section
9.10. Severability [INSERT PAGE
NUMBER]
Section
9.11. Expenses [INSERT PAGE
NUMBER]
Section
9.12. Construction [INSERT PAGE
NUMBER]
Section 9.13. Incorporation
of Exhibits and Schedules [INSERT PAGE
NUMBER]
Section 9.14. Specific
Performance [INSERT PAGE
NUMBER]
Section 9.15. Submission to
Jurisdiction [INSERT PAGE
NUMBER]
Exhibit A
– Certificates to be Exchanged
Exhibit B
– Form of Officer’s Certificate of Integrated Media Concerning
Accuracy
Exhibit C
– Form of Officer’s Certificate of TeleChem Concerning Accuracy
Exhibit D
– Form of Investment Representation
Exhibit E
– Form of Opinion of Integrated Media’s Counsel
Exhibit F
– Form of Opinion of TeleChem's Counsel
Exhibit G
– Form of Trust Receipt, Irrevocable Instructions and Irrevocable
Proxy
Exhibit H
– Capitalization of Integrated Media as of the Closing Time
AGREEMENT
AND PLAN OF MERGER
This
AGREEMENT AND PLAN OF MERGER (“Agreement”) entered into as of February 5, 2008,
by and among Integrated Media Holdings, Inc., a Delaware corporation
(“Integrated Media”), TeleChem International, Inc., a Delaware corporation
(“TeleChem”), Rene’ A. Schena and Todd J. Martinsky, holders of 100% of the
shares of TeleChem (“Shareholders”), Endavo Media and Communications, Inc., a
Delaware corporation (“Endavo”) and TCI Acquisition Corp., a Nevada corporation,
and a wholly owned subsidiary of Integrated Media (“Merger
Sub”). Integrated Media, TeleChem, Endavo, Merger Sub and
Shareholders are referred to collectively herein as the “Parties.”
R E C I T
A L S:
A. Merger Sub, upon the terms and
subject to the conditions of this Agreement and in accordance with the
applicable sections of the Nevada Revised Statutes (“Nevada Law”) and General
Corporation Law of Delaware (“Delaware Law”) will merge with and into TeleChem
(the “Merger”). Simultaneously with the merger of Merger
Sub with and into TeleChem, the Shareholders will exchange their TeleChem Shares
for shares of the common stock of Integrated Media. Integrated Media will
transfer its wholly-owned subsidiary, Endavo. Integrated Media will change its
domicile from Delaware to Nevada.
B. The Stockholders of
TeleChem have determined that the Merger is in the best interests of TeleChem,
has approved and adopted this Agreement and the transactions contemplated
hereby.
C. The Board of Directors of
Integrated Media and Merger Sub have approved and adopted this Agreement and the
transactions contemplated hereby, and the Board of Directors and the sole
stockholder of Merger Sub have adopted this Agreement.
D. For federal Income Tax
purposes, it is intended that the Merger will qualify as a tax-free
reorganization under the provisions of Section 368(a)(2)(D) of the Code (as
defined below).
NOW, THEREFORE, in consideration of the
premises and the mutual promises herein made, and in consideration of the
representations, warranties, and covenants herein contained, the Parties agree
as follows.
ARTICLE
1
DEFINITIONS
“Affiliate” has the meaning set forth
in Rule 12b-2 of the regulations promulgated under the Securities Exchange
Act.
“Affiliated Group” means any affiliated
group within the meaning of Code Section 1504 or any similar group defined under
a similar provision of state, local, or foreign law.
“Agreement” has the meaning set forth
in the preface above.
“Business Day” means a day of the year
in which banks are not required or authorized to be closed in the City of
Houston.
“CERCLA” means the United States
Comprehensive Environmental Response, Compensation, and Liability
Act.
“Certificates” has the meaning set
forth in Section 2.07.
“Cleanup” means any investigative,
monitoring, cleanup, removal, containment or other remedial or response action
required by any Environmental Law or Occupational Safety and Health
Law. The terms “removal,” “remedial,” and “response action” include
the types of activities covered by CERCLA.
“Closing” has the meaning set forth in
Section 2.02.
“Closing Date” has the meaning set
forth in Section 2.02.
“Code” means the Internal Revenue Code
of 1986, as amended.
“Confidential Information” means any
information concerning the businesses and affairs of TeleChem that is not
already generally available to the public.
“Contravene” means an act or omission
would “Contravene” something if, as the context requires:
(i) the
act or omission would conflict with it, violate it, result in a breach or
violation of or failure to comply with it, or constitute a default under
it;
(ii) the
act or omission would give any Governmental Body or other Person the right to
challenge, revoke, withdraw, suspend, cancel, terminate, or modify it, to
exercise any remedy or obtain any relief under it, or to declare a default or
accelerate the maturity of any obligation under it; or
(iii) the
act or omission would result in the creation of an Encumbrance on the stock or
assets of the subject company.
“Controlled Group of Corporations” has
the meaning set forth in Code Section 1563.
“Deferred Intercompany Transaction” has
the meaning set forth in Regulation Section 1.1502-13.
“Delaware Law” has the meaning set
forth in the Recitals above.
“Dissenting Shares” has the meaning set
forth in Section 2.09.
“Effective Time” has the meaning set
forth in Section 2.02.
“Employee Benefit Plan” means any (a)
nonqualified deferred compensation or retirement plan or arrangement which is an
Employee Pension Benefit Plan, (b) qualified defined contribution retirement
plan or arrangement which is an Employee Pension Benefit Plan, (c) qualified
defined benefit retirement plan or arrangement which is an Employee Pension
Benefit Plan (including any Multiemployer Plan), or (d) Employee Welfare Benefit
Plan, cafeteria plan as defined in Section 125 of the Code, or material fringe
benefit plan or program.
“Employee Pension Benefit Plan” has the
meaning set forth in ERISA Section 3(2).
“Employee Welfare Benefit Plan” has the
meaning set forth in ERISA Section 3(1).
“Encumbrance” means any charge, claim,
mortgage, servitude, easement, right of way, community or other marital property
interest, covenant, equitable interest, lien, option, pledge, security interest,
preference, priority, right of first refusal, or similar
restriction.
“Environment” means soil, land surface
or subsurface strata, surface waters (including navigable water and ocean
waters), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other similar medium or
natural resource.
“Environmental, Health, and Safety
Liabilities” means any cost, damages, expense, Liability, or other
responsibility arising from or under Environmental Law or Occupational Safety
and Health Law, including those consisting of or relating to:
(i) any
environmental, health, or safety matter or condition (including on-site or
off-site contamination, occupational safety and health, and regulation of any
chemical substance or product);
(ii) any
fine, penalty, judgment, award, settlement, proceeding, damages, loss, claim,
demand and response, investigative, monitoring, remedial, or inspection cost or
expense arising under Environmental Law or Occupational Safety and Health
Law;
(iii) financial
responsibility under any Environmental Law or Occupational Safety and Health Law
for Cleanup costs or corrective action, (whether or not such Cleanup has been
required or requested by any Governmental Body or other Person) and for any
natural resource damage; or
(iv) any
other compliance, corrective, or remedial measures required under any
Environmental Law or Occupational Safety and Health Law.
“Environmental Law” means CERCLA and
any other Legal Requirement that requires or relates to:
(i) advising
appropriate Governmental Bodies, employees, or the public of intended or actual
Releases of pollutants or hazardous substances or materials, violations of
discharge limits or other prohibitions and the commencement of activities, such
as resource extraction or construction, that could have significant impact on
the Environment;
(ii) preventing
or reducing to acceptable levels the Release of pollutants or hazardous
substances or materials into the Environment;
(iii) reducing
the quantities, preventing the Release, or minimizing the hazardous
characteristics of wastes that are generated;
(iv) assuring
that products are designed, formulated, packaged, and used so that they do not
present unreasonable risks to human health or the Environment when used or
disposed of;
(v) protecting
resources, species, or ecological amenities;
(vi) reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil, or other potentially harmful
substances;
(vii) Cleanup
of pollutants that have been Released, preventing the threat of Release, or
paying the costs of such Cleanup or prevention; or
(viii) making
responsible parties pay private parties, or groups of them, for damages done to
their health or the Environment, or permitting self-appointed representatives of
the public interest to recover for injuries done to public assets.
“ERISA” means the Employee Retirement
Income Security Act of 1974, as amended.
“Facility” means any Real Property or
tangible personal property interest owned or operated by Integrated Media or its
subsidiaries. For purposes of Section 4.23 and the definition of
“Hazardous Activity,” the term also includes any Real Property or tangible
personal property interest formerly owned or operated by Integrated Media or its
subsidiaries or any predecessor Person.
“Fiduciary” has the meaning set forth
in ERISA Section 3(21).
“GAAP” means United States generally
accepted accounting principles as in effect from time to time.
“Good Title” means good and defensible
title which is (i) evidenced by an instrument or instruments filed of record in
accordance with the conveyance and recording laws of the applicable jurisdiction
and is sufficient against competing claims of bona fide purchasers for value
without notice and (ii) free and clear of all liens, security interest, claims,
infringements, and other burdens of encumbrances, other than such liens,
security interests, claims, infringements, and other burdens of encumbrances
that a reasonably prudent purchaser of oil and gas properties would accept in
light of the value of the property affected, the improbability of assertion of
the defect or irregularity or the degree of difficulty or the cost of performing
curative work.
“Governmental Body” means
any:
(i) nation,
region, state, county, city, town, village, district, or other
jurisdiction;
(ii) federal,
state, local, municipal, foreign or other government;
(iii) governmental
or quasi-governmental authority of any nature (including any governmental
agency, branch, department, or other entity and any court or other
tribunal);
(iv) multinational
organization;
(v) body
exercising, or entitled to exercise, any administrative, executive, judicial,
legislative, policy, regulatory, or taxing authority or power of any nature;
and
(vi) official
of any of the foregoing.
“Hazardous Activity” means the
distribution, generation, handling, importing, management, manufacturing,
processing, production, refinement, Release, storage, transfer, transportation,
treatment, or use (including any withdrawal or other use of groundwater) of
Hazardous Materials in, on, under, about, or from any of the Facilities or any
part thereof into the Environment, and any other act, business, operation, or
thing that increases the danger, or risk of danger, or poses an unreasonable
risk of harm to individuals or property on or off the Facilities, or that may
affect the value of any of the Facilities or Integrated Media and its
subsidiaries.
“Hazardous Materials” means any waste
or other substance that is listed, defined, designated, or classified as, or
otherwise determined to be, hazardous, radioactive, or toxic or a pollutant or a
contaminant under or pursuant to any Environmental Law, including any admixture
or solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.
“Income Taxes” means all income and
profits Taxes, capital taxes, franchise taxes and similar Taxes based on income,
profits or capital (including any Taxes in lieu of such income or profits Taxes)
imposed by any Federal, state, local or foreign governmental agency, whether in
the form of assessments in the nature of Taxes or otherwise, together with all
interest, penalties and additions imposed with respect to (a) such Taxes or (b)
the late filing or nonfiling of returns relating to such Taxes.
“Information Statement” has the meaning
set forth in Section 3.17.
“Intellectual Property” means (a) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos, trade names, and corporate
names, together with all translations, adaptations, derivations, and
combinations thereof and including all goodwill associated therewith, and all
applications, registrations, and renewals in connection therewith, (c) all
copyrightable works, all copyrights, and all applications, registrations, and
renewals in connection therewith, (d) all mask works and all applications,
registrations, and renewals in connection therewith, (e) all trade secrets and
confidential business information (including ideas, research and development,
know-how, formulas, compositions, manufacturing and production processes and
techniques, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (f) all computer software (including data and related
documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
“Integrated Media” has the meaning set
forth in the preface to this Agreement.
“Integrated Media Common Stock” means
the common stock, par value $.001 per share, of Integrated Media.
“Integrated Media Disclosure Schedule”
has the meaning set forth in Article 4.
“Integrated Media Common Stock” means
the voting, Common Stock, par value $.001 per share, of Integrated
Media.
“Integrated Media Series A Preferred
Stock” means the voting, Series A Convertible Preferred stock, par value $.001
per share, of Integrated Media as described in the Amended and Restated
Certificate of Incorporation, each initially convertible as provided
therein.
“Knowledge” means actual knowledge
after reasonable investigation.
“Legal Requirement” means any
constitution, law, statute, treaty, rule, regulation, ordinance, binding case
law or principle of common law, notice, approval or Order of any Governmental
Body, and any Contract with any Governmental Body relating to compliance with
any of the foregoing.
“Merger” has the meaning set forth in
the Recitals above.
“Merger Consideration” has the meaning
set forth in Section 2.06(b).
“Merger Sub” has the meaning set forth
in the preface above.
“Multiemployer Plan” has the meaning
set forth in ERISA Section 3(37).
“Nevada Articles of Merger” has the
meaning set forth in Section 2.02.
“Nevada Law” has the meaning set forth
in the Recitals above.
“Occupational Safety and Health Law”
means any Legal Requirement designed to provide safe and healthful working
conditions and to reduce occupational safety and health hazards, and any
program, whether governmental or private (such as those promulgated or sponsored
by industry associations and insurance companies), designed to provide safe and
healthful working conditions.
“Order” means any order, injunction,
judgment, decree, ruling, assessment or arbitration award of any Governmental
Body or arbitrator.
“Ordinary Course of Business” means the
ordinary course of business consistent with past custom and practice (including
with respect to quantity and frequency).
“OTC” means the OTC Bulletin
Board.
“Outstanding TeleChem Shares” means all
TeleChem capital stock issued and outstanding immediately prior to the Effective
Time.
“Parties” has the meaning set forth in
the preface above.
“PBGC” means the Pension Benefit
Guaranty Corporation.
“Person” means an individual, a
partnership, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
“Real Property” means all real property
of Integrated Media and its subsidiaries, including all parcels and tracts of
land in which Integrated Media or its subsidiaries has a fee simple estate or a
leasehold estate, and all improvements, easements and appurtenances
thereto.
“Release” means any spilling, leaking,
emitting, discharging, depositing, escaping, leaching, dumping, or other
releasing into the Environment, whether intentional or
unintentional.
“Reportable Event” has the meaning set
forth in ERISA Section 4043.
“SEC” means the United States
Securities and Exchange Commission.
“Secretary” has the meaning set forth
in Section 2.02.
“Securities Act” means the Securities
Act of 1933, as amended.
“Securities Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Security Interest” means any mortgage,
pledge, lien, encumbrance, charge, or other security interest, other than (a)
mechanic’s, materialmen’s, and similar liens, (b) liens for Taxes not yet due
and payable, and (c) purchase money liens and liens securing rental payments
under capital lease arrangements.
“Shareholders” has the meaning set
forth in the Recitals above.
“Subsidiary” means any corporation with
respect to which a specified Person (or a Subsidiary thereof) owns a majority of
the common stock or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors.
“Surviving Corporation” has the meaning
set forth in Section 2.01.
“Taxes” shall mean all excise, real and
personal property, sales, use, customs duties, payroll, withholding, capital or
franchise (based on capital and/or activity), estimated and other taxes,
including Income Taxes, imposed by a federal, state, local or foreign
governmental agency, whether in the form of assessments which are in the nature
of Taxes or otherwise, together with all interest, penalties and additions
imposed with respect to such amounts.
“TeleChem” has the meaning set forth in
the preface to this Agreement..
“TeleChem Audited Statements” shall
mean TeleChem’ audited financial statements as of and for the period ended with
its most recent fiscal year.
“TeleChem Disclosure Schedule” has the
meaning set forth in Article 3.
“TeleChem Most Recent Financial
Statements” has the meaning set forth in Section 3.07(b).
“TeleChem Shares” means the capital
stock of TeleChem.
“TeleChem Stockholders” has the meaning
set forth in the preface above.
“Tax Returns” means returns,
declarations, reports, claims for refund, information returns or other documents
(including any related or supporting schedules, statements or information) filed
or required to be filed in connection with the determination, assessment or
collection of Taxes of any Party or the administration of any laws, regulations
or administrative requirements relating to any Taxes.
“Threatened” means an action or matter
would be considered to have been “Threatened” if a demand or statement has been
made (whether orally or in writing) or a notice has been given (whether orally
or in writing), or any other event has occurred or any other circumstances
exist, that would lead a prudent Person to conclude that such action or matter
is likely to be asserted, commenced, taken or otherwise pursued in the
future.
ARTICLE
2
THE
MERGER
Section 2.01. Basic
Transaction. Upon the terms and subject to the conditions set
forth in this Agreement and in accordance with Nevada Law and Delaware Law, at
the Effective Time, Merger Sub shall be merged with and into TeleChem. As set
forth in Sections 2.06 and 2.07 hereunder, simultaneously with the merger of
Merger Sub with and into TeleChem, the Shareholders will exchange their TeleChem
Shares for shares of the common stock of Integrated Media. Integrated Media will
transfer its wholly-owned subsidiary, Endavo pursuant to Section 2.11 hereunder.
Integrated Media will change its domicile from Delaware to Nevada pursuant to
Section 5.11 As a result of the Merger, the outstanding shares of
capital stock of Merger Sub and TeleChem shall be converted or canceled in the
manner provided in Section 2.06 of this Agreement, the separate existence of
Merger Sub shall cease and TeleChem will be the surviving corporation in the
Merger of Merger Sub into TeleChem (the “Surviving Corporation”).
Section 2.02. Effective
Time; Closing. As promptly as practicable after Closing
(defined below), and in no event later than the first Business Day following the
satisfaction or, if permissible, waiver of the conditions set forth in Article 7
(or such other date as may be agreed in writing by each of the Parties), the
Parties shall cause the Merger to be consummated by filing articles of merger
(the “Nevada Articles of Merger”), with the Secretary of State of the State of
Nevada (the “Nevada Secretary”) in such form as is required by, and executed in
accordance with the relevant provisions of, Nevada Law and a certificate of
merger (the “Delaware Certificate of Merger”), with the Secretary of State of
the State of Delaware (the “Delaware Secretary”) in such form as is required by,
and executed in accordance with the relevant provisions of, Delaware
Law. The term “Effective Time” means the date and time of the last to
occur of the filing of the Nevada Articles of Merger with the Nevada Secretary
or the filing of the Delaware Certificate of Merger with the Delaware Secretary
(or such later time as may be agreed in writing by each of the Parties and
specified in the Nevada Articles of Merger and Delaware Certificate of
Merger). Immediately prior to the filing of the Nevada Articles of
Merger and Delaware Certificate of Merger, a closing (the “Closing”) will be
held at the Houston, Texas offices of Sonfield & Sonfield at 9:00 a.m.,
local time, on the first Business Day after the date on which the last of the
conditions to Closing set forth in Article 7 hereof (other than conditions to be
satisfied at the Closing) are fulfilled or waived by the appropriate Party, as
the case may be (or such other time, date or place as the Parties may agree)
(the “Closing Date”).
Section 2.03. Effect of
the Merger. At the Effective Time, the effect of the Merger
shall be as provided in the applicable provisions of Nevada Law and Delaware
Law.
Section 2.04. Certificate
of Incorporation; Bylaws.
(a) At
the Effective Time, the articles of incorporation of TeleChem, as in effect
immediately prior to the Effective Time, shall be the articles of incorporation
of the Surviving Corporation, until thereafter amended as provided therein or by
applicable law.
(b) At
the Effective Time, the bylaws of TeleChem, as in effect immediately prior to
the Effective Time, shall be the bylaws of the Surviving Corporation until
thereafter amended as provided therein or by applicable law.
Section 2.05. Directors
and Officers. At the Effective Time, the officers and
directors of TeleChem shall continue as the officers and directors of Surviving
Corporation, to hold office in accordance with the Articles of Incorporation and
Bylaws of Integrated Media until a successor is elected or appointed and has
qualified or until the earliest of such director’s death, resignation, removal
or disqualification, or as otherwise provided in the bylaws of Integrated
Media.
Section 2.06. Conversion
of Securities. At the Effective Time, by virtue of the Merger
and without any action on the part of Merger Sub or TeleChem:
(a) The
common stock of TeleChem (the “TeleChem Shares”) issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive the number of fully paid, non assessable shares of Integrated Media
Common Stock issuable to the persons set out in Exhibit A hereto (the “Exchange
Ratio”).
(b) Shares
of Integrated Media Common Stock to be issued to holders of TeleChem Shares
pursuant to Section 2.06(a) is referred to as the “Merger
Consideration.” If between the date of this Agreement and the
Effective Time, any TeleChem Shares held by a TeleChem stockholder shall be
transferred to TeleChem, the Merger Consideration shall be correspondingly
adjusted to the extent appropriate to reflect such transfer of
shares.
(c) In
any event, if between the date of this Agreement and the Effective Time, the
outstanding shares of Integrated Media Common Stock or TeleChem Shares shall
have been changed into a different number of shares or a different class, by
reason of any declared or completed stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Merger Consideration shall be correspondingly adjusted to the extent
appropriate to reflect such stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares. Upon
surrender of the certificate(s) representing TeleChem Shares in accordance with
Section 2.07, such holder of TeleChem Shares shall be entitled to receive the
Merger Consideration.
(d) From
and after the Effective Time, all TeleChem Shares shall no longer be outstanding
and shall automatically be canceled and retired and shall cease to exist, and
each certificate previously representing any such interests shall thereafter
represent the right to receive the Merger Consideration into which such TeleChem
Shares were converted in the Merger, upon surrender of the certificate(s)
representing such interests in accordance with Section
2.07. Certificates previously representing shares of TeleChem Shares
shall be exchanged for the Merger Consideration upon the surrender of such
certificates in accordance with the provisions of Section 2.07, without
interest.
(e) Any
TeleChem Shares owned by Integrated Media, Merger Sub or any direct or indirect
wholly owned subsidiary of Integrated Media immediately prior to the Effective
Time shall be canceled and extinguished without any conversion thereof and no
payment shall be made with respect thereto.
(f) Each
share of common stock, par value $.001 per share, of Merger Sub issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation at the Effective Time, and the Surviving Corporation
thereafter shall not have other equity securities.
Section 2.07. Exchange of
Certificates.
(a) At
the Closing, each holder of record of a certificate or certificates (the
“Certificates”) which immediately prior to the Effective Time represented
Outstanding TeleChem Shares shall tender such Certificates to Integrated Media
or its designated transfer or exchange agent with such other documents as
Integrated Media may reasonably request, including a stock
power. Upon surrender of a Certificate for cancellation to Integrated
Media together with such duly executed documents as may be required, the holder
of such Certificate shall be entitled to receive in exchange therefor the Merger
Consideration which such holder has the right to receive in respect of TeleChem
Shares formerly represented by such Certificates, together with any dividends or
other distributions to which such holder is entitled pursuant to Section
2.07(b). The surrendered Certificates shall then be marked
canceled. In the event of a transfer of ownership of TeleChem Shares
which is not registered in the transfer records of TeleChem, the Merger
Consideration may be paid in accordance with Article 2 to the transferee if the
Certificates representing such shares of TeleChem Shares are presented to
Integrated Media, accompanied by all documents required to evidence and effect
such transfer and by evidence that any applicable stock transfer taxes have been
paid. Until surrendered as contemplated by this Section 2.07(a), each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration, and any
dividends or other distributions to which such holder is entitled pursuant to
Section 2.07(b). No interest shall be paid on the Merger
Consideration.
(b)
No dividends or other distributions declared or made after the Effective Time
with respect to Integrated Media Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate with
respect to the shares of Integrated Media Common Stock evidenced thereby until
the holder of such Certificate shall surrender such
Certificate. Subject to the effect of applicable laws, following
surrender of any such Certificate, there shall be paid to the holder of such
Certificate, in addition to the shares of Integrated Media Common Stock as
provided in Section 2.07(a), without interest, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to the whole shares of Integrated Media Common Stock evidenced by such
Certificate. There shall be paid to the holder of the certificates
representing whole shares of Integrated Media Common Stock issued in exchange
therefor, without interest: (i) promptly, the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of Integrated Media Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions, with a
record date after the Effective Time but prior to surrender and a payment date
occurring after surrender, payable with respect to such whole shares of
Integrated Media Common Stock.
(c) The
Merger Consideration issued or paid upon conversion of the Outstanding TeleChem
Shares in accordance with the terms hereof (including any cash paid or other
distributions pursuant to Sections 2.07(b)) shall be deemed to have been issued
or paid in full satisfaction of all rights pertaining to such TeleChem
Shares.
(d) Neither
Integrated Media nor the Surviving Corporation shall be liable to TeleChem for
any Merger Consideration (or dividends or distributions with respect thereto)
which remains undistributed to the holders of TeleChem Shares for one year after
the Effective Time and is delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) If
any Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the TeleChem stockholder claiming such Certificate to
be lost, stolen or destroyed and, if required by the Integrated Media, the
posting by such TeleChem stockholder of a bond in such reasonable amount as the
Integrated Media may direct as indemnity against any claim that may be made
against it with respect to such Certificate, Integrated Media will issue in
exchange for such lost, stolen or destroyed Certificate the Merger
Consideration, and unpaid dividends and distributions on the Merger
Consideration deliverable in respect thereof pursuant to this
Agreement.
(f) No
certificates or scrip evidencing fractional shares of Integrated Media Common
Stock shall be issued upon the surrender for exchange of Certificates, but in
lieu thereof each stockholder of TeleChem who would otherwise be entitled to
receive a fraction of a share of Integrated Media Common Stock, after
aggregating all fractional shares of Integrated Media Common Stock which such
holder would be entitled to receive under Section 2.06, shall receive the next
larger number of whole shares of Integrated Media Common Stock to which such
holder would otherwise be entitled.
Section 2.08. Stock
Transfer Books. At the Effective Time, the stock
transfer books of TeleChem shall be closed and there shall be no further
registration of transfers of shares of TeleChem Shares thereafter on the records
of TeleChem. On or after the Effective Time, any Certificates
presented to Integrated Media for any reason shall be converted into the Merger
Consideration, and any dividends or other distributions to which they are
entitled pursuant to Section 2.07(b) in accordance with the terms of this
Agreement.
Section 2.09. Dissenting
Shares. TeleChem Shares that have not been voted for
adoption of the merger and with respect to which dissenter’s rights have been
properly demanded in accordance with Section 262 of the Delaware Law
(“Dissenting Shares”), shall not be converted into the right to receive the
Merger Consideration at or after the Effective Time unless and until the holder
of such shares withdraws his demand for dissenter’s rights or becomes ineligible
of dissenter’s rights. If a holder of Dissenting Shares withdraws his
demand for dissenter’s rights or becomes ineligible for dissenter’s rights,
then, as of the Effective Time or the occurrence of such event, whichever later
occurs, such holder’s Dissenting Shares shall cease to be Dissenting Shares and
shall be converted into and represent the right to receive the Merger
Consideration.
Section 2.10. Stock
Options. At the Effective Time, each then outstanding option
to purchase shares of TeleChem Shares granted by TeleChem (collectively, the
“TeleChem Options”), shall, as of the Effective Time, automatically and without
any action on the part of the holder thereof, be cancelled and of no further
force or effect.
Section 2.11. Transfer and
Divestiture of Endavo. Integrated Media shall have divested
all of its interest in its wholly owned subsidiary, Endavo Media and
Communications, Inc., a Delaware corporation, by transfer to Paul D. Hamm and
shall have paid or discharged any Integrated Media obligations of any kind or
character, direct or contingent, such that there are no outstanding liabilities
whatsoever. The consideration received by Integrated Media for the
transfer of Endavo shall be the cancellation of 1,750,000 outstanding common
stock purchase warrants of Integrated Media owned by Paul D.
Hamm. Upon execution of this Agreement, Integrated Media and Paul D.
Hamm will execute and deliver the Trust Receipt Irrevocable Instructions and
Irrevocable Proxy substantially in the form of Exhibit G hereto and Integrated
Media will deliver to Paul D. Hamm the Endavo Shares (as defined
therein).
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES OF TELECHEM AND SHAREHOLDERS
TeleChem represents and warrants to
Integrated Media that the statements contained in this Article 3 are correct and
complete in all material respects as of the date of this Agreement and will be
correct and complete in all material respects as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date of this
Agreement throughout this Article 3), except as set forth in the disclosure
schedule delivered by TeleChem to Integrated Media on the date hereof and
initialed by the Parties (the “TeleChem Disclosure
Schedule”). Nothing in the TeleChem Disclosure Schedule shall be
deemed adequate to disclose an exception to a representation or warranty made
herein, however, unless the TeleChem Disclosure Schedule identifies the
exception with reasonable particularity, describes the relevant facts in
reasonable detail and identifies the subsection of this Article 3 to which the
exception applies. Without limiting the generality of the foregoing,
the mere listing (or inclusion of a copy) of a document or other item shall not
be deemed adequate to disclose an exception to a representation or warranty made
herein (unless the representation or warranty has to do with the existence of
the document or other item itself). The TeleChem Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Article 3.
Section
3.01. Organization, Qualification and Corporate
Power. TeleChem is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware. Each of
TeleChem and its subsidiaries is duly authorized to conduct business and is in
good standing under the laws of each jurisdiction where such qualification is
required. Each of TeleChem and its subsidiaries has full corporate
power and authority and all licenses, permits and authorizations necessary to
carry on the businesses in which it is engaged, to own and use the properties
owned and used by it and to execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the Merger and the transactions
contemplated thereby. Section 3.01 of the TeleChem Disclosure
Schedule lists the directors and officers of TeleChem and its
subsidiaries. Except as set forth on Section 3.01 of the TeleChem
Disclosure Schedule, each of TeleChem and its subsidiaries does not have and
never has had any equity or ownership interests in any corporation, partnership,
joint venture, limited liability company or other legal entity. The
execution and delivery of this Agreement and the other agreements, documents and
instruments executed in connection herewith to which TeleChem is a party and the
consummation by TeleChem of the transactions contemplated hereby have been duly
and validly authorized by all necessary corporate action and no other corporate
proceedings on the part of TeleChem are necessary to authorize this Agreement or
such other agreements, documents and instruments or to consummate the Merger and
the transactions contemplated thereby (other than the filing and recordation of
the Delaware Articles of Merger with the Delaware Secretary as required by
Delaware Law). The Agreement and the other agreements, documents and
instruments executed in connection herewith to which TeleChem is a party has
been duly and validly executed and delivered by TeleChem and constitute a legal,
valid and binding obligation of TeleChem, enforceable against TeleChem in
accordance with their respective terms. The minute books (containing
the records of meetings of the Stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books, and the
stock record books of each of TeleChem and its subsidiaries are correct and
complete. None of TeleChem and its subsidiaries is in default under
or in violation of any provision of its charter or bylaws.
Section
3.02. Noncontravention. Except as set out on
Section 3.02 of the TeleChem Disclosure Schedule, neither the execution and the
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which TeleChem is subject or
any provision of its charter or by-laws or (b) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which TeleChem is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Security Interest
upon any of its assets). None of TeleChem and its subsidiaries needs
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement, other
than the filing and recordation of the Nevada Articles of Merger with the Nevada
Secretary.
Section
3.03. Capitalization. Section 3.03 of the TeleChem
Disclosure Schedule sets out: (i) the authorized capital stock of TeleChem, (ii)
the number of issued and outstanding shares, and (iii) the number of shares held
in treasury. All of the issued and outstanding TeleChem Shares have
been duly authorized, are validly issued, fully paid, and
nonassessable. Except as set forth in Section 3.03(a) of the TeleChem
Disclosure Schedule, there are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require TeleChem to issue, sell, or
otherwise cause to become outstanding any of its capital stock. There
are no outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to TeleChem. Except as
set forth in Section 3.03(b) of the TeleChem Disclosure Schedule, there are no
voting trusts, proxies, or other agreements or understandings with respect to
the voting of the capital stock of TeleChem. Section 3.03(a) of the
TeleChem Disclosure Schedule shall set forth the date of grant, exercise price,
number of shares of TeleChem Shares exercisable for and the expiration date for
each outstanding option, warrant and other convertible security of
TeleChem. Section 3.03(b) of the TeleChem Disclosure Schedule shall
set forth each outstanding option, warrant and other convertible security of
TeleChem that is subject to registration rights.
Section 3.04. Brokers’
Fees. Except the Consulting and Finder Agreement with Cole
Business Development, LLC, a Nevada limited liability company, none of
Shareholders, TeleChem or any of its subsidiaries has any liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
Section 3.05. Title to
Assets. Except as set forth in Section 3.05 of the TeleChem
Disclosure Schedule, TeleChem and its subsidiaries have good and marketable
title to, or a valid leasehold interest in, the properties and assets used by
them, located on their premises, or shown on the TeleChem Balance Sheet (as
defined in Section 3.07) or acquired after the date thereof, free and clear of
all Security Interests, except for properties and assets disposed of in the
Ordinary Course of Business since the date of the TeleChem Balance
Sheet.
Section
3.06. Subsidiaries. Section 3.06 of the TeleChem
Disclosure Schedule sets forth for each Subsidiary of TeleChem (i) its name and
jurisdiction of incorporation, (ii) the number of shares of authorized capital
stock of each class of its capital stock, (iii) the number of issued and
outstanding shares of each class of its capital stock, the names of the holders
thereof, and the number of shares held by each such holder, and (iv) the number
of shares of its capital stock held in treasury. All of the issued
and outstanding shares of capital stock of each Subsidiary of TeleChem have been
duly authorized and are validly issued, fully paid, and
nonassessable. One of TeleChem and its subsidiaries holds of record
and owns beneficially all of the outstanding shares of each Subsidiary of
TeleChem, free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require any of
TeleChem and its subsidiaries to sell, transfer, or otherwise dispose of any
capital stock of any of its subsidiaries or that could require any Subsidiary of
TeleChem to issue, sell, or otherwise cause to become outstanding any of its own
capital stock. There are no outstanding stock appreciation, phantom
stock, profit participation, or similar rights with respect to any Subsidiary of
TeleChem. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of any capital stock of any Subsidiary
of TeleChem. None of TeleChem and its subsidiaries controls directly
or indirectly or has any direct or indirect equity participation in any
corporation, partnership, trust, or other business association which is not a
Subsidiary of TeleChem.
Section 3.07. Financial
Statements.
(a) The
TeleChem unaudited financial Statements (including, in each case, any notes
thereto) (i) are in accordance with the books and records of TeleChem; (ii)
present fairly and accurately the financial condition of TeleChem, as of the
dates of the balance sheets; (iii) present fairly and accurately the results of
operations for the periods covered by such statements; (iv) present fairly and
accurately the changes in stockholders’ equity and cash flows for the periods
covered by such statements; (v) have been prepared in accordance with GAAP
applied on a consistent basis; and (vi) include all adjustments (consisting of
only normal recurring accruals) which are necessary for a fair presentation of
the financial condition of TeleChem, and of the results of operations of
TeleChem for the periods covered by such statements, and fairly present the
financial position, results of operations and changes in stockholders’ equity
and cash flows of TeleChem and its consolidated subsidiaries as of the
respective dates thereof and for the respective periods indicated
therein.
(b) The
unaudited balance sheet and statement of income and cash flow (“TeleChem Most
Recent Financial Statements”) as of and for the year ended December 31, 2007 for
TeleChem have been prepared in accordance with GAAP applied on a consistent
basis and present fairly the financial condition of TeleChem as of such dates
and the results of operations of TeleChem for such periods; provided, however,
that the TeleChem Most Recent Financial Statements are subject to normal
year-end adjustments and lack footnotes and other presentation
items.
(c) Except
to the extent set forth on the unaudited consolidated balance sheet of TeleChem
as of December 31, 2007, including the notes to the audited financial statements
of which such balance sheet is a part, for the year ended December 31, 2007 (the
“TeleChem Balance Sheet”), neither TeleChem nor any of its subsidiaries has any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) which would be required to be reflected on a balance sheet, or in the
notes thereto, prepared in accordance with generally accepted accounting
principles applied on a consistent basis.
(d) Except
as set forth herein or in Section 3.07 of the TeleChem Disclosure Schedule,
since December 31, 2007, there has not been any material adverse change in the
financial condition of TeleChem.
Section 3.08. Undisclosed
Liabilities. Except as set forth in Section 3.08 of the
TeleChem Disclosure Schedule, none of TeleChem and its subsidiaries has any
liability (whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due, including any liability for Taxes), and there is no basis
for any present or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim or demand against any of them giving rise to any
liability, except for liabilities set forth on the face of the TeleChem Balance
Sheet (rather than in any notes thereto).
Section 3.09. Legal
Compliance. Except as set forth herein or in Section 3.09 of
the TeleChem Disclosure Schedule each of TeleChem, its subsidiaries, and their
respective predecessors and Affiliates has complied with all applicable laws
(including rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local, and foreign
governments (and all agencies thereof), including all import and export laws
relating to its products and business and the payment of all customs duties or
other official charges incurred, due or owed by TeleChem or its subsidiaries,
and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, or notice has been filed or commenced against any of them
alleging any failure so to comply.
Section 3.10. Real
Property. Each of TeleChem and its subsidiaries does not
own, has never owned, does not have, nor has it ever had any interest in any
real property, other than pursuant to a valid lease.
Section 3.11. Tangible
Assets. The tangible assets that TeleChem and its
subsidiaries own and lease are free from material defects (patent and latent),
have been maintained in accordance with normal industry practice, and are in
good operating condition and repair (subject to normal wear and tear), and is
suitable for the purpose for which it presently is used.
Section 3.12. Powers of
Attorney. There are no outstanding powers of attorney executed
on behalf of any of TeleChem and its subsidiaries.
Section
3.13. Employees. None of TeleChem and its
subsidiaries is a party to or bound by any collective bargaining agreement, nor
has it experienced any strike or material grievance, claim of unfair labor
practices, or other collective bargaining dispute within the past three
years. None of TeleChem and its subsidiaries has committed any
material unfair labor practice. None of TeleChem and its subsidiaries
and the directors and officers of TeleChem and its subsidiaries has any
Knowledge of any organizational effort presently being made or threatened by or
on behalf of any labor union with respect to employees of TeleChem and its
subsidiaries.
Section
3.14. Guaranties. None of TeleChem and its
subsidiaries is a guarantor or otherwise is responsible for any liability or
obligation (including indebtedness) of any other Person.
Section 3.15. Certain
Business Practices. TeleChem and its subsidiaries and, to the
knowledge of TeleChem, Shareholders and each director, officer, authorized agent
or employee of TeleChem or any of its subsidiaries have not, directly or
indirectly, (a) used any funds for unlawful contributions, gifts, entertainment
or other unlawful expenses relating to political activity, (b) made any unlawful
payment to foreign or domestic government officials or employees or to foreign
or domestic political parties or campaigns or violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended, (c) made any other unlawful
payment, (d) violated any of the provisions of Section 999 of the Code or
Section 8 of the Export Administration Act, as amended, or (e) established or
maintained any fund or asset that has not been recorded in the books and records
of TeleChem and its subsidiaries.
Section 3.16. Parachute
Payments. TeleChem has not entered into any agreement that
would result in the making of “parachute payments,” as defined in Section 280G
of the Code, to any Person.
Section 3.17. Information
Statement. The information supplied or to be supplied by or on behalf of
TeleChem for inclusion or incorporated by reference in any Integrated Media
information statement that may be required pursuant to Section 14f or Section
14C of the Exchange Act, in definitive form (the “Information Statement”), will
not, at the date mailed to the Integrated Media stockholders, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
Information Statement, insofar as it relates to Integrated Media, will comply as
to form in all material respects with the applicable provisions of the Exchange
Act and rules and regulations thereunder.
Section 3.18. Environment,
Health, and Safety.
(a) TeleChem
International, Inc. regularly stores and handles hazardous chemicals in its
ongoing business operations. TeleChem has created and implemented a
hazardous materials communication program. Employees are trained to handle
these chemicals in accordance with good industrial hygiene and safety practices,
with OSH regulations and with DOT regulations. TeleChem's facilities are fully
licensed to store and handle hazardous aterials, and are inspected by the City
of Sunnyvale Hazardous Materials Unit annually. TeleChem is in compliance
with all federal, state and local regulations.
(b) Each
of TeleChem and its subsidiaries is, and at all times has been, in full
compliance with, and has not been and is not in Contravention of or liable
under, any Environmental Law or Occupational Safety and Health
Law. Neither any of TeleChem and its subsidiaries has any basis to
expect, nor has any of them or any other Person for whose conduct they are or
may be held responsible received, any actual or Threatened Order, notice, or
other communication from (i) any Governmental Body or other Person acting in the
public interest, or (ii) the current or prior owner or operator of any Facility,
of any actual or potential violation or failure to comply with any Environmental
Law, or of any actual or Threatened obligation to undertake or bear the cost of
any Environmental, Health, and Safety Liabilities with respect to any Facility
or other property or asset (whether real, personal, or mixed) in which any of
TeleChem or its subsidiaries has had an interest, or with respect to any
property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or processed by TeleChem,
its subsidiaries or any other Person for whose conduct they are or may be held
responsible, or from which Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(c) There
are no pending or Threatened, claims, Encumbrances or other restrictions of any
nature, resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law or Occupational Safety and
Health Law, with respect to or affecting any Facilities or any other properties
and assets (whether real, personal, or mixed) in which any of TeleChem or its
subsidiaries has or had an interest.
(d) Neither
any of TeleChem or its subsidiaries has any basis to expect, nor has any of them
or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, Order, summons, warning, or
other communication that relates to Hazardous Activity, Hazardous Materials, or
any actual, alleged, possible or potential Contravention of or failure to comply
with any Environmental Law or Occupational Safety and Health Law, or of any
actual, alleged, possible or potential obligation to undertake or bear the cost
of any Environmental, Health, and Safety Liabilities with respect to any
Facility or other property or asset (whether real, personal, or mixed) in which
any of TeleChem or its subsidiaries had an interest, or with respect to any
property or facility to or by which Hazardous Materials generated, manufactured,
refined, transferred, imported, used, or processed by any of TeleChem, its
subsidiaries, or any other Person for whose conduct they are or may be held
responsible, have been transported, treated, stored, handled, transferred,
disposed, recycled, or received. Neither any of TeleChem or its
subsidiaries, nor any other Person for whose conduct they are or may be held
responsible, has any Environmental, Health, and Safety Liabilities with respect
to any Facility or with respect to any other property or asset (whether real,
personal, or mixed) in which any of TeleChem or its subsidiaries (or any
predecessor), has or had an interest, or at any property geologically or
hydrologically adjoining any Facility or any such other property or
asset.
(e) There
has been no Release or, to TeleChem’ Knowledge, Threat of Release, of any
Hazardous Materials at or from any Facility or at any other location where any
Hazardous Materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by any Facility, or from any
other property or asset (whether real, personal, or mixed) in which any of
TeleChem or its subsidiaries has or had an interest, or any geologically or
hydrologically adjoining property, whether by any of TeleChem, its subsidiaries,
or any other Person.
(f) TeleChem
has delivered to Integrated Media true and complete copies and results of any
reports, studies, analyses, tests, or monitoring possessed or initiated by any
of TeleChem or its subsidiaries pertaining to Hazardous Materials or Hazardous
Activities in, on, or under any Facilities, or concerning compliance by any of
TeleChem, its subsidiaries, or any other Person for whose conduct they are or
may be held responsible, with Environmental Laws.
Section
3.19. Disclosure. The representations and
warranties contained in this Article 3 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Article 3 not
misleading.
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES
CONCERNING
INTEGRATED MEDIA AND ITS SUBSIDIARIES
Integrated Media and its subsidiaries
represent and warrant to TeleChem that the statements contained in this Article
4 are correct and complete in all material respects as of the date of this
Agreement and will be correct and complete in all material respects as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Article 4), except as
set forth in the disclosure schedule delivered by Integrated Media to TeleChem
on the date hereof and initialed by the Parties (the “Integrated Media
Disclosure Schedule”). Nothing in the Integrated Media Disclosure
Schedule shall be deemed adequate to disclose an exception to a representation
or warranty made herein, however, unless the Integrated Media Disclosure
Schedule identifies the exception with reasonable particularity, describes the
relevant facts in reasonable detail and identifies the subsection of this
Article 4 to which the exception applies. Without limiting the
generality of the foregoing, the mere listing (or inclusion of a copy) of a
document or other item shall not be deemed adequate to disclose an exception to
a representation or warranty made herein (unless the representation or warranty
has to do with the existence of the document or other item
itself). The Integrated Media Disclosure Schedule will be arranged in
paragraphs corresponding to the lettered and numbered paragraphs contained in
this Article.
Section
4.01. Organization, Qualification, and Corporate
Power. Each of Integrated Media and its subsidiaries is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. Each of Integrated
Media and its subsidiaries is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required. Each of Integrated Media and its subsidiaries has full
corporate power and authority and all licenses, permits and authorizations
necessary to carry on the businesses in which it is engaged, to own and use the
properties owned and used by it and to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the Merger and the
transactions contemplated thereby. Section 4.01 of the Integrated
Media Disclosure Schedule lists the directors and officers of Integrated Media
and its subsidiaries. Except as set forth on Section 4.01 of the
Integrated Media Disclosure Schedule, each of Integrated Media and its
subsidiaries does not have and never has had any equity or ownership interests
in any corporation, partnership, joint venture, limited liability company or
other legal entity. The execution and delivery of this Agreement by
Integrated Media and the other agreements, documents and instruments executed in
connection herewith to which Integrated Media is a party and the consummation by
Integrated Media of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action and no other corporate
proceedings on the part of Integrated Media are necessary to authorize this
Agreement or such other agreements, documents and instruments or to consummate
the Merger and the transactions contemplated thereby (other than the filing and
recordation of the Nevada Articles of Merger with the Nevada Secretary as
required by Nevada Law). The Agreement and the other agreements,
documents and instruments executed in connection herewith to which Integrated
Media is a party has been duly and validly executed and delivered by Integrated
Media and constitute a legal, valid and binding obligation of Integrated Media,
enforceable against Integrated Media in accordance with their respective
terms. The minute books (containing the records of meetings of the
stockholders, the board of directors, and any committees of the board of
directors), the stock certificate books, and the stock record books of each of
Integrated Media and its subsidiaries are correct and complete. None
of Integrated Media and its subsidiaries is in default under or in violation of
any provision of its charter or bylaws.
Section
4.02. Capitalization. Section 4.01 of the
Integrated Media Disclosure Schedule lists the outstanding warrants to purchase
common stock of Integrated Media and Exhibit H reflects, as of the Effective
Time, the capitalization of Integrated Media including: (i) the number of
authorized shares of Integrated Media Common Stock, (ii) the number of issued
and outstanding shares of Integrated Media Common Stock, (iii) the number of
authorized shares of Integrated Media Preferred Stock, (iv) the number and
designation of issued and outstanding shares of Integrated Media Preferred
Stock, (v) the date of grant, exercise price, number of shares of Integrated
Media Common Stock exercisable for and the expiration date for each outstanding
option, warrant and other convertible security of Integrated Media, (vi)
outstanding or authorized options, warrants, purchase rights, subscription
rights, conversion rights, exchange rights, or other contracts or commitments
that could require Integrated Media to issue, sell, or otherwise cause to become
outstanding any of its capital stock, (vii) each outstanding option, warrant and
other convertible security of Integrated Media that is subject to registration
rights, (viii) outstanding or authorized stock appreciation, phantom stock,
profit participation, or similar rights. No Integrated Media Common
Stock shares were held in treasury. All of the issued and outstanding
Integrated Media Common Stock and Common Stock shares have been duly authorized,
are validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting of the capital stock of Integrated
Media.
Section
4.03. Noncontravention. Neither the execution and
the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will (a) violate any constitution, statute, regulation,
rule, injunction, judgment, order, decree, ruling, charge, or other restriction
of any government, governmental agency, or court to which any of Integrated
Media and its subsidiaries is subject or any provision of the charter or bylaws
of any of Integrated Media and its subsidiaries or (b) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which any of Integrated Media and its subsidiaries is a party or
by which it is bound or to which any of its assets is subject (or result in the
imposition of any Security Interest upon any of its assets). None of
Integrated Media and its subsidiaries needs to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order for the Parties to consummate the transactions
contemplated by this Agreement, other than the filing and recordation of the
Nevada Articles of Merger with the Secretary.
Section 4.04. Brokers’
Fees. None of Integrated Media and its subsidiaries has any
liability or obligation to pay any fees or commissions to any broker, finder, or
agent with respect to the transactions contemplated by this
Agreement.
Section 4.05. Title to
Assets. Integrated Media and its subsidiaries have good and
marketable title to, or a valid leasehold interest in, the properties and assets
used by them, located on their premises, or shown on the Integrated Media
Balance Sheet (as defined in Section 4.07) or acquired after the date thereof,
free and clear of all Security Interests, except for properties and assets
disposed of in the Ordinary Course of Business since the date of the Integrated
Media Balance Sheet.
Section
4.06. Subsidiaries. Section 4.06 of the Integrated
Media Disclosure Schedule sets forth for each Subsidiary of Integrated Media (i)
its name and jurisdiction of incorporation, (ii) the number of shares of
authorized capital stock of each class of its capital stock, (iii) the number of
issued and outstanding shares of each class of its capital stock, the names of
the holders thereof, and the number of shares held by each such holder, and (iv)
the number of shares of its capital stock held in treasury. All of
the issued and outstanding shares of capital stock of each Subsidiary of
Integrated Media have been duly authorized and are validly issued, fully paid,
and nonassessable. One of Integrated Media and its subsidiaries holds
of record and owns beneficially all of the outstanding shares of each Subsidiary
of Integrated Media, free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and state securities laws), Taxes,
Security Interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. There are no outstanding or authorized
options, warrants, purchase rights, subscription rights, conversion rights,
exchange rights, or other contracts or commitments that could require any of
Integrated Media and its subsidiaries to sell, transfer, or otherwise dispose of
any capital stock of any of its subsidiaries or that could require any
Subsidiary of Integrated Media to issue, sell, or otherwise cause to become
outstanding any of its own capital stock. There are no outstanding
stock appreciation, phantom stock, profit participation, or similar rights with
respect to any Subsidiary of Integrated Media. There are no voting
trusts, proxies, or other agreements or understandings with respect to the
voting of any capital stock of any Subsidiary of Integrated
Media. None of Integrated Media and its subsidiaries controls
directly or indirectly or has any direct or indirect equity participation in any
corporation, partnership, trust, or other business association which is not a
Subsidiary of Integrated Media.
Section 4.07. SEC Filings;
Financial Statements.
(a) Integrated
Media has timely filed all forms, reports, statements and documents
(collectively, the “SEC Reports”) required to be filed by it within the past
twelve months with the SEC. The SEC Reports, after giving effect to
any amendments thereto, (i) were prepared in accordance with the requirements of
the Securities Act and the Exchange Act, as the case may be, and the rules and
regulations thereunder and (ii) did not, at the time they were filed, contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary of Integrated Media is currently required
to file any form, report or other document with the SEC.
(b) Each
of the financial statements (including, in each case, any notes thereto)
contained in the SEC Reports (i) are in accordance with the books and records of
Integrated Media; (ii) present fairly and accurately the financial condition of
Integrated Media, as of the dates of the balance sheets; (iii) present fairly
and accurately the results of operations for the periods covered by such
statements; (iv) present fairly and accurately the changes in stockholders’
equity and cash flows for the periods covered by such statements; (v) have been
prepared in accordance with GAAP applied on a consistent basis; (vi) include all
adjustments (consisting of only normal recurring accruals which are necessary
for a fair presentation of the financial condition of Integrated Media, and of
the results of operations of Integrated Media for the periods covered by such
statements; and (vii) fully comply with all requirements of Regulation S-K and
all applicable securities laws, and each fairly presented the financial
position, results of operations and changes in stockholders’ equity and cash
flows of Integrated Media and its consolidated subsidiaries as of the respective
dates thereof and for the respective periods indicated therein.
(c) Except
to the extent set forth on the audited consolidated balance sheet of Integrated
Media as of December 31, 2006, including the notes to the audited financial
statements of which such balance sheet is a part and which is included in
Integrated Media’s Form 10-KSB for the year ended December 31, 2006 (the
“Integrated Media Balance Sheet”), neither Integrated Media nor any of its
subsidiaries has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with generally
accepted accounting principles applied on a consistent basis.
(d) Integrated
Media has heretofore made available to TeleChem, true, complete and correct
copies of all amendments and modifications (if any) that have not been filed by
Integrated Media with the SEC to all agreements, documents and other instruments
that previously had been filed by Integrated Media as exhibits to the SEC
Reports and are currently in effect.
Section 4.08. Absence of
Certain Changes or Events. Since December 31, 2007, there has
not been any material adverse change in the business, financial condition,
operations, results of operations, or future prospects of any of Integrated
Media and its subsidiaries. Without limiting the generality of the
foregoing, since that date:
(a) none
of Integrated Media and its subsidiaries has sold, leased, transferred, or
assigned any material assets, tangible or intangible, outside the Ordinary
Course of Business;
(b) none
of Integrated Media and its subsidiaries has entered into any material
agreement, contract, lease, or license (or series of related agreements,
contracts, leases and licenses) either involving more than $10,000 or outside
the Ordinary Course of Business;
(c) no
party (including any of Integrated Media and its subsidiaries) has accelerated,
terminated, modified, or cancelled any agreement, contract, lease, or license
(or series of related agreements, contracts, leases, and licenses) involving
more than $10,000 to which any of Integrated Media and its subsidiaries is a
party or by which any of them is bound;
(d) none
of Integrated Media and its subsidiaries has imposed any Security Interest upon
any of its assets, tangible or intangible;
(e) none
of Integrated Media and its subsidiaries has made any capital expenditures (or
series of related capital expenditures) in excess of $10,000;
(f) except
as set forth in Section 4.08(f) of the Integrated Media Disclosure Schedule,
none of Integrated Media and its subsidiaries has made any capital investment
in, any loan to, or any acquisition of the securities or assets of, any other
Person;
(g) none
of Integrated Media and its subsidiaries has issued any note, bond, or other
debt security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money and capitalized lease obligations either involving more than
$5,000 singly or $10,000 in the aggregate;
(h) none
of Integrated Media and its subsidiaries has granted any license or sublicense
of any rights under or with respect to any Intellectual Property;
(i) there
has been no change made or authorized in the charter or bylaws of any of
Integrated Media and its subsidiaries;
(j) none
of Integrated Media and its subsidiaries has issued, sold, or otherwise disposed
of any of its capital stock, or granted any options, warrants, or other rights
to purchase or obtain (including upon conversion, exchange, or exercise) any of
its capital stock;
(k) except
as set forth in Section 4.08(k) of the Integrated Media Disclosure Schedule,
none of Integrated Media and its subsidiaries has declared, set aside, or paid
any dividend or made any distribution with respect to its capital stock (whether
in cash or in kind) or redeemed, purchased, or otherwise acquired any of its
capital stock;
(l) none
of Integrated Media and its subsidiaries has experienced any damage,
destruction, or loss (whether or not covered by insurance) to its
property;
(m) except
as set forth in Section 4.08(m) of the Integrated Media Disclosure Schedule,
none of Integrated Media and its subsidiaries has made any loan to, or entered
into any other transaction with, any of its directors, officers, and
employees;
(n) none
of Integrated Media and its subsidiaries has entered into any employment
contract or collective bargaining agreement, written or oral, or modified the
terms of any such existing contract or agreement;
(o) none
of Integrated Media and its subsidiaries has granted any increase in the base
compensation of any of its directors or officers or any of its other employees
outside the Ordinary Course of Business;
(p) none
of Integrated Media and its subsidiaries has adopted, amended, modified, or
terminated any bonus, profit-sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its directors, officers, and
employees (or taken any such action with respect to any other Employee Benefit
Plan);
(q) none
of Integrated Media and its subsidiaries has made any other change in employment
terms for any of its directors, officers, and employees; and
(r) except
as set forth in Section 4.08(r) of the Integrated Media Disclosure Schedule,
none of Integrated Media and its subsidiaries has delayed or postponed the
payment of accounts payable and other liabilities outside the Ordinary Course of
Business;
(s) none
of Integrated Media and its subsidiaries has cancelled, compromised, waived, or
released any right or claim (or series of related rights and claims) either
involving more than $10,000 or outside the Ordinary Course of
Business;
(t) none
of Integrated Media and its subsidiaries has made or pledged to make any
charitable or other capital contribution outside the Ordinary Course of
Business;
(u) there
has not been any other occurrence, event, incident, action, failure to act, or
transaction outside the Ordinary Course of Business involving any of Integrated
Media and its subsidiaries; and
(v) none
of Integrated Media and its subsidiaries has committed to any of the
foregoing.
Section 4.09. Undisclosed
Liabilities. None of Integrated Media and its
subsidiaries has any liability (whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for Taxes), and there
is no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against any of them giving
rise to any liability, except for liabilities set forth on the face of the
Integrated Media Balance Sheet (rather than in any notes thereto).
Except as set forth in Section 4.09 of
the Integrated Media Disclosure Schedule, Integrated Media does not have any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due, including any liability for
Taxes), and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
it giving rise to any liability, based on its subsidiaries operations, ownership
of assets, actions or inactions.
Section 4.10. Legal
Compliance. Each of Integrated Media, its subsidiaries, and
their respective predecessors and Affiliates has complied with all applicable
laws (including rules, regulations, codes, plans, injunctions, judgments,
orders, decrees, rulings, and charges thereunder) of federal, state, local, and
foreign governments (and all agencies thereof), including all import and export
laws relating to its products and business and the payment of all customs duties
or other official charges incurred, due or owed by Integrated Media or its
subsidiaries, and no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, demand, or notice has been filed or commenced against any of
them alleging any failure so to comply.
Section 4.11. Tax
Matters.
(a) Each
of Integrated Media and its subsidiaries has filed or caused to be filed in a
timely manner (within any applicable extension periods) all Tax Returns that it
was required to file. All such Tax Returns were complete and accurate
in all material respects. All Taxes owed by any of Integrated Media
and its subsidiaries (whether or not shown on any Tax Return) have been
paid. None of Integrated Media and its subsidiaries is currently the
beneficiary of any extension of time within which to file any Tax
Return. No claim has ever been made by an authority in a jurisdiction
where any of Integrated Media and its subsidiaries does not file Tax Returns
that it is or may be subject to taxation by that jurisdiction. There
are no Security Interests on any of the assets of any of Integrated Media and
its subsidiaries that arose in connection with any failure (or alleged failure)
to pay any Tax.
(b) Each
of Integrated Media and its subsidiaries has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder, or other third
party.
(c) No
director or officer (or employee responsible for Tax matters) of any of
Integrated Media and its subsidiaries expects any authority to assess any
additional Taxes for any period for which Tax Returns have been
filed. There is no dispute, claim, notice or inquiry concerning any
Tax liability of any of Integrated Media or its subsidiaries either claimed or
raised by any authority in writing or as to which any of the directors and
officers (and employees responsible for Tax matters) of each of Integrated Media
and its subsidiaries has Knowledge based upon personal contact with any agent of
such authority. There are no material matters under discussion
between Integrated Media or its subsidiaries and any governmental authority
regarding claims for additional Taxes or assessments with reference to
Integrated Media or its subsidiaries or the business or property of Integrated
Media or its subsidiaries.
(d) Section
4.11(d) of the Integrated Media Disclosure Schedule lists all federal, state,
local, and foreign Tax Returns filed with respect to Integrated Media and its
subsidiaries for Taxable periods ended on or after December 31, 2005, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. Integrated Media has delivered to
TeleChem correct and complete copies of all federal Tax Returns, examination
reports, and statements of deficiencies assessed against, or agreed to by
Integrated Media or its subsidiaries since December 31, 2006. None of
Integrated Media and its subsidiaries has waived any statute of limitations in
respect of Taxes or agreed to any extension of time with respect to a Tax
assessment or deficiency.
(e) None
of Integrated Media and its subsidiaries has filed a consent under Code Section
341(f) concerning collapsible corporations. None of Integrated Media
and its subsidiaries has made any material payments, is obligated to make any
material payments, or is a party to any agreement that under certain
circumstances could obligate it to make any material payments that will not be
deductible under Code Section 280G. None of Integrated Media and its
subsidiaries has been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) during the applicable period specified in
Code Section 897(c)(1)(A)(ii). Each of Integrated Media and its
subsidiaries has disclosed on its federal income Tax Returns all positions taken
therein that could give rise to a substantial understatement of federal income
Tax within the meaning of Code Section 6662. None of Integrated Media
and its subsidiaries is a party to any Tax allocation or sharing
agreement. None of Integrated Media and its subsidiaries (i) has been
a member of an Affiliated Group filing a consolidated federal Tax Return (other
than a group the common parent of which was Integrated Media) or (ii) has any
liability for the Taxes of any Person (other than of Integrated Media or any of
its subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract, or otherwise.
(f) Section
4.11(f) of the Integrated Media Disclosure Schedule sets forth estimates of the
following information with respect to each of Integrated Media and its
subsidiaries (or, in the case of clause (B) below, with respect to each of the
subsidiaries) as of the most recent practicable date: (A) the basis of
Integrated Media or Subsidiary in its assets; (B) the basis of the
stockholder(s) of the Subsidiary in its stock; (C) the amount of any net
operating loss, net capital loss, unused investment or other credit, unused
foreign tax, or excess charitable contribution allocable to Integrated Media or
Subsidiary; and (D) the amount of any deferred gain or loss allocable to
Integrated Media or Subsidiary arising out of any Deferred Intercompany
Transaction.
(g) The
unpaid Taxes of Integrated Media and its subsidiaries (i) did not, as of
December 31, 2007, exceed by any material amount the reserve for Tax liability
(rather than any reserve for deferred Taxes established to reflect timing
differences between book and Tax income) set forth on the face of the Integrated
Media Balance Sheet (rather than in any notes thereto) and (ii) will not exceed
by any material amount that reserve as adjusted for operations and transactions
through the Closing Date in accordance with the past custom and practice of
Integrated Media and its subsidiaries in filing their Tax Returns.
Section 4.12. Real
Property.
(a) Each
of Integrated Media and its subsidiaries does not own, has never owned, does not
have, nor has it ever had any interest in any real property other than pursuant
to a valid lease.
(b) Section
4.12(b) of the Integrated Media Disclosure Schedule lists and describes briefly
all real property leased or subleased to each of Integrated Media and its
subsidiaries. Integrated Media has delivered to TeleChem correct and
complete copies of the leases and subleases listed in Section 4.12(b) of the
Integrated Media Disclosure Schedule (as amended to date).
Section 4.13. Intellectual
Property.
(a) The
Intellectual Property of Integrated Media does not interfere with, infringe
upon, misappropriate, or violate any Intellectual Property rights of third
parties, and none of the directors and officers of Integrated Media and its
subsidiaries has ever received any charge, complaint, claim, demand, or notice
alleging any such interference, infringement, misappropriation, or violation
(including any claim that any of Integrated Media and its subsidiaries must
license or refrain from using any Intellectual Property rights of any third
party). No third party has interfered with, infringed upon,
misappropriated, or violated any Intellectual Property rights of Integrated
Media.
(b) Section
4.13(b) of the Integrated Media Disclosure Schedule identifies each license,
sublicense, agreement, or permission granted by Integrated Media or its
subsidiaries to any third party relating to Intellectual Property of Integrated
Media.
Section 4.14. Tangible
Assets. The buildings, machinery, equipment, and other
tangible assets that Integrated Media and its subsidiaries own and lease are
free from material defects (patent and latent), have been maintained in
accordance with normal industry practice, and are in good operating condition
and repair (subject to normal wear and tear), and is suitable for the purpose
for which it presently is used .
Section
4.15. Contracts. Section 4.15 of the Integrated
Media Disclosure Schedule lists the following contracts and other agreements to
which any of Integrated Media and its subsidiaries is a party:
(a) any
agreement (or group of related agreements) for the lease of personal property to
or from any Person providing for lease payments in excess of
$1,000;
(b) any
agreement (or group of related agreements) for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance of which will extend over
a period of more than one year or involve consideration in excess of
$5,000;
(c) any
agreement concerning a partnership or joint venture;
(d) any
agreement (or group of related agreements) under which it has created, incurred,
assumed, or guaranteed any indebtedness for borrowed money, or any capitalized
lease obligation, in excess of $5,000 or under which it has imposed a Security
Interest on any of its assets, tangible or intangible;
(e) any
agreement concerning confidentiality or noncompetition;
(f) any
agreement, contract or understanding (including any agreement, contract or
understanding evidencing any outstanding indebtedness or other similar
obligations to Integrated Media or its subsidiaries) with any director, officer,
Affiliate or “associate” (as such term is defined in Rule 12b-2 under the
Securities Exchange Act) of Integrated Media or its subsidiaries;
(g) any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other material plan or arrangement for the benefit
of its current or former directors, officers, and employees;
(h) any
collective bargaining agreement;
(i) any
agreement for the employment of any individual on a full-time, part-time,
consulting, or other basis;
(j) any
agreement under which it has advanced or loaned any amount to any of its
directors, officers, and employees outside the Ordinary Course of
Business;
(k) any
agreement under which the consequences of a default or termination could have a
material adverse effect on the business, financial condition, operations,
results of operations, or future prospects of any of Integrated Media and its
subsidiaries; or
(l) any
other agreement (or group of related agreements) the performance of which
involves consideration in excess of $5,000.
Integrated
Media has delivered to TeleChem a correct and complete copy of each written
agreement listed in Section 4.15 of the Integrated Media Disclosure Schedule (as
amended to date) and a written summary setting forth the material terms and
conditions of each oral agreement referred to in Section 4.20 of the Integrated
Media Disclosure Schedule. With respect to each such agreement: (i)
the agreement is legal, valid, binding, enforceable, and in full force and
effect in all material respects; (ii) the agreement will continue to be legal,
valid, binding, enforceable, and in full force and effect on identical terms
following the consummation of the transactions contemplated hereby; (iii) no
party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; and (iv) no party has
repudiated any provision of the agreement.
Section 4.16. Notes and
Accounts Receivable. All notes and accounts receivable of
Integrated Media and its subsidiaries listed on Section 4.21 of the Integrated
Media Disclosure Schedule are reflected properly on their books and records, are
valid receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts set forth on the
face of the Integrated Media Balance Sheet (rather than in any notes thereto) as
adjusted for operations and transactions in the Ordinary Course of Business
through the Closing Date. With respect to the accounts receivable
listed on Section 4.16 of the Integrated Media Disclosure Schedule, no
chargeback allowance or cooperative advertising allowance or related liability
exists that is not fully and accurately reflected in such accounts
receivable.
Section 4.17. Powers of
Attorney. There are no outstanding powers of attorney executed
on behalf of any of Integrated Media and its subsidiaries.
Section
4.18. Insurance. Section 4.18 of the Integrated
Media Disclosure Schedule sets forth the following information with respect to
each insurance policy (including policies providing property, casualty,
liability, and workers’ compensation coverage and bond and surety arrangements)
with respect to which any of Integrated Media and its subsidiaries has been a
party, a named insured, or otherwise the beneficiary of coverage at any time
within the past 3 years:
(a) the
name, address, and telephone number of the agent;
(b) the
name of the insurer, the name of the policyholder, and the name of each covered
insured;
(c) the
policy number and the period of coverage;
(d) the
scope (including an indication of whether the coverage is on a claims made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage;
and
(e) a
description of any retroactive premium adjustments or other loss- sharing
arrangements.
With
respect to each such insurance policy: (i) the policy is legal, valid, binding,
enforceable, and in full force and effect; (ii) the policy will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby; (iii)
neither any of Integrated Media and its subsidiaries nor any other party to the
policy is in breach or default (including with respect to the payment of
premiums or the giving of notices), and no event has occurred which, with notice
or the lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (iii) no party
to the policy has repudiated any provision thereof. Each of
Integrated Media and its subsidiaries has been covered during the past 3 years
by insurance in scope and amount customary and reasonable for the businesses in
which it has engaged during the aforementioned period. Section 4.18
of the Integrated Media Disclosure Schedule describes any material
self-insurance arrangements affecting any of Integrated Media and its
subsidiaries.
Section
4.19. Litigation. Section 4.19 of the Integrated
Media Disclosure Schedule sets forth each instance in which any of Integrated
Media and its subsidiaries (a) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (b) is a party or, to its
Knowledge, is Threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings,
hearings, and investigations set forth in Section 4.19 of the Integrated Media
Disclosure Schedule could result in any adverse change in the business,
financial condition, operations, results of operations, or future prospects of
any of Integrated Media and its subsidiaries. None of Integrated
Media and its subsidiaries and the directors and officers (and employees with
responsibility for litigation matters) of Integrated Media and its subsidiaries
has any reason to believe that any such action, suit, proceeding, hearing, or
investigation may be brought or Threatened against any of Integrated Media and
its subsidiaries.
Section
4.20. Employees. None of Integrated Media and its
subsidiaries is a party to or bound by any collective bargaining agreement, nor
has it experienced any strike or material grievance, claim of unfair labor
practices, or other collective bargaining dispute within the past three
years. None of Integrated Media and its subsidiaries has committed
any material unfair labor practice. None of Integrated Media and its
subsidiaries and the directors and officers of Integrated Media and its
subsidiaries has any Knowledge of any organizational effort presently being made
or Threatened by or on behalf of any labor union with respect to employees of
Integrated Media and its subsidiaries.
Section 4.21. Employee
Benefits.
(a) None
of Integrated Media and its subsidiaries maintains or contributes, or has ever
maintained or contributed to any Employee Benefit Plan.
(b) None
of Integrated Media, its subsidiaries and the other stockholders of the
Controlled Group of Corporations that includes Integrated Media and its
subsidiaries contributes to, ever has contributed to, or ever has been required
to contribute to any Multiemployer Plan or has any liability (whether known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any withdrawal liability, under any Multiemployer
Plan.
(c) None
of Integrated Media and its subsidiaries maintains or ever has maintained or
contributes, ever has contributed, or ever has been required to contribute to
any Employee Welfare Benefit Plan providing medical, health, or life insurance
or other welfare-type benefits for current or future retired or terminated
employees, their spouses, or their dependents (other than in accordance with
Code Section 4980B).
(d) No
current or former employee, officer and director of Integrated Media and its
subsidiaries has any outstanding agreement, contract or understanding with
respect to Integrated Media or its subsidiaries that provides for bonus
payments.
Section
4.22. Guaranties. None of Integrated Media and its
subsidiaries is a guarantor or otherwise is responsible for any liability or
obligation (including indebtedness) of any other Person.
Section 4.23. Environment,
Health, and Safety.
(a) Each
of Integrated Media and its subsidiaries is, and at all times has been, in full
compliance with, and has not been and is not in Contravention of or liable
under, any Environmental Law or Occupational Safety and Health
Law. Neither any of Integrated Media and its subsidiaries has any
basis to expect, nor has any of them or any other Person for whose conduct they
are or may be held responsible received, any actual or Threatened Order, notice,
or other communication from (i) any Governmental Body or other Person acting in
the public interest, or (ii) the current or prior owner or operator of any
Facility, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any Facility or other property or asset (whether real, personal, or mixed) in
which any of Integrated Media or its subsidiaries has had an interest, or with
respect to any property or Facility at or to which Hazardous Materials were
generated, manufactured, refined, transferred, imported, used, or processed by
Integrated Media, its subsidiaries or any other Person for whose conduct they
are or may be held responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled, or
received.
(b) There
are no pending or Threatened, claims, Encumbrances or other restrictions of any
nature, resulting from any Environmental, Health, and Safety Liabilities or
arising under or pursuant to any Environmental Law or Occupational Safety and
Health Law, with respect to or affecting any Facilities or any other properties
and assets (whether real, personal, or mixed) in which any of Integrated Media
or its subsidiaries has or had an interest.
(c) Neither
any of Integrated Media or its subsidiaries has any basis to expect, nor has any
of them or any other Person for whose conduct they are or may be held
responsible, received, any citation, directive, inquiry, notice, Order, summons,
warning, or other communication that relates to Hazardous Activity, Hazardous
Materials, or any actual, alleged, possible or potential Contravention of or
failure to comply with any Environmental Law or Occupational Safety and Health
Law, or of any actual, alleged, possible or potential obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any Facility or other property or asset (whether real, personal, or mixed) in
which any of Integrated Media or its subsidiaries had an interest, or with
respect to any property or facility to or by which Hazardous Materials
generated, manufactured, refined, transferred, imported, used, or processed by
any of Integrated Media, its subsidiaries, or any other Person for whose conduct
they are or may be held responsible, have been transported, treated, stored,
handled, transferred, disposed, recycled, or received. Neither any of
Integrated Media or its subsidiaries, nor any other Person for whose conduct
they are or may be held responsible, has any Environmental, Health, and Safety
Liabilities with respect to any Facility or with respect to any other property
or asset (whether real, personal, or mixed) in which any of Integrated Media or
its subsidiaries (or any predecessor), has or had an interest, or at any
property geologically or hydrologically adjoining any Facility or any such other
property or asset.
(d) There
are no Hazardous Materials present on or in the Environment at any Facility or
at any geologically or hydrologically adjoining property, including any
Hazardous Materials contained in barrels, above or underground storage tanks,
landfills, land deposits, dumps, equipment (whether moveable or fixed) or other
containers, either temporary or permanent, and deposited or located in land,
water, sumps, or any other part of any Facility or such adjoining property, or
incorporated into any structure therein or thereon. None of
Integrated Media, its subsidiaries, any other Person for whose conduct they are
or may be held responsible, or any other Person has permitted or conducted, or
is aware of, any Hazardous Activity conducted with respect to any Facility or
other property or asset (whether real, personal, or mixed) in which any of
Integrated Media or its subsidiaries has or had an interest.
(e) There
has been no Release or, to Integrated Media’s Knowledge, Threat of Release, of
any Hazardous Materials at or from any Facility or at any other location where
any Hazardous Materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed from or by any Facility, or from any
other property or asset (whether real, personal, or mixed) in which any of
Integrated Media or its subsidiaries has or had an interest, or any geologically
or hydrologically adjoining property, whether by any of Integrated Media, its
subsidiaries, or any other Person.
(f) Integrated
Media has delivered to TeleChem true and complete copies and results of any
reports, studies, analyses, tests, or monitoring possessed or initiated by any
of Integrated Media or its subsidiaries pertaining to Hazardous Materials or
Hazardous Activities in, on, or under any Facilities, or concerning compliance
by any of Integrated Media, its subsidiaries, or any other Person for whose
conduct they are or may be held responsible, with Environmental
Laws.
Section 4.24. Certain
Business Relationships With Integrated Media. Except as
disclosed in Section 4.24 of the Integrated Media Disclosure Schedule, none of
the directors and officers of Integrated Media and its subsidiaries and their
Affiliates has been involved in any business arrangement or relationship with
Integrated Media or its subsidiaries within the past 24 months, and none of the
directors and officers of Integrated Media and its subsidiaries and their
Affiliates owns any asset, tangible or intangible, which is used in the business
of Integrated Media or its subsidiaries.
Section 4.25. Change of
Control. Integrated Media and its subsidiaries are not a
party to any agreement, contract, obligation, or undertaking which contains a
“change in control,” “potential change in control” or similar provision and the
consummation of the transactions contemplated hereby will not (either alone or
upon the occurrence of any additional acts or events) result in any payment
(whether of severance pay or otherwise) becoming due from Integrated Media and
its subsidiaries to any Person, materially increase any benefits otherwise
payable by Integrated Media or any of its subsidiaries, or result in the
acceleration of the time of payment or vesting of any such
benefits.
Section 4.26. Certain
Business Practices. Integrated Media and its
subsidiaries and, to the Knowledge of Integrated Media, each director, officer,
authorized agent or employee of Integrated Media or any of its subsidiaries have
not, directly or indirectly, (a) used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity,
(b) made any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns or violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended, (c) made
any other unlawful payment, (d) violated any of the provisions of Section 999 of
the Code or Section 8 of the Export Administration Act, as amended, or (e)
established or maintained any fund or asset that has not been recorded in the
books and records of Integrated Media and its subsidiaries.
Section 4.27. Parachute
Payments. Integrated Media has not entered into any agreement
that would result in the making of “parachute payments,” as defined in Section
280G of the Code, to any Person.
Section
4.28. Disclosure. The representations and
warranties contained in this Article 4 do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements and information contained in this Article 4 not
misleading.
ARTICLE
5
PRE-CLOSING
COVENANTS
The Parties agree as follows with
respect to the period between the execution of this Agreement and the
Closing.
Section
5.01. General. Each of the Parties will use his,
her or its reasonable best efforts to take all actions and to do all things
necessary, proper, or advisable in order to consummate and make effective the
transactions contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in Article 7).
Section 5.02. Notices and
Consents. Each of Integrated Media and its subsidiaries
shall give any notices to third parties, and each of Integrated Media and its
subsidiaries shall use its best efforts to obtain any third party consents, that
TeleChem reasonably may request in connection with the matters referred to in
Section 4.03. Each of the Parties will give any notices to, make any
filings with, and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in connection
with the matters referred to in Section 4.03.
Section 5.03. Operation of
Business. Each of (i) Integrated Media and its subsidiaries,
and (ii) TeleChem, shall not engage in any practice, take any action, or enter
into any transaction outside the Ordinary Course of Business. Without
limiting the generality of the foregoing, Integrated Media and its subsidiaries
and TeleChem shall not (a) declare, set aside, or pay any dividend or make any
distribution with respect to its capital stock or redeem, purchase, or otherwise
acquire any of its capital stock, (b) become a party to any agreement of the
type of referred to in Section 4.20 (only with respect to Integrated Media and
its subsidiaries), or (c) otherwise engage in any practice, take any action, or
enter into any transaction of the sort described in Section 5.07 (only with
respect to Integrated Media and its subsidiaries).
Section 5.04. Preservation
of Business. Each of (i) Integrated Media and its
subsidiaries, and (ii) TeleChem, shall keep its business and properties
substantially intact, including its present operations, physical facilities,
working conditions, and relationships with lessors, licensors, suppliers,
customers, and employees.
Section 5.05. Full
Access.
(a) Each
of Integrated Media and its subsidiaries shall permit representatives of
TeleChem to have full access at all reasonable times, and in a manner so as not
to interfere with the normal business operations of Integrated Media, to all
premises, properties, personnel, books, records (including Tax records),
contracts, and documents of or pertaining to Integrated Media and its
subsidiaries.
(b) TeleChem
shall permit representatives of Integrated Media to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of TeleChem, to all premises, properties, personnel, books,
records (including Tax records), contracts, and documents of or pertaining to
TeleChem.
Section 5.06. Notice of
Developments. TeleChem and Integrated Media will give prompt
written notice to the other party of any adverse development causing a breach of
any of the representations and warranties in Article 3 or 4,
respectively. No disclosure by any Party pursuant to this Section
5.06, however, shall be deemed to amend or supplement the TeleChem Disclosure
Schedule or the Integrated Media Disclosure Schedule, as applicable, or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
Section
5.07. Exclusivity.
(a) Integrated
Media agrees that it, prior to the Effective Time, shall not, directly or
indirectly, nor shall it permit any of its subsidiaries to, nor shall it
authorize or permit any director, officer, employee or agent of, or any
investment banker, attorney, accountant or other advisor or representative of,
Integrated Media or any of its subsidiaries (collectively, the “Integrated Media
Representatives”) to, directly or indirectly through another Person, solicit,
initiate, encourage, induce or facilitate the making, submission or announcement
of any Acquisition Proposal, or participate in any discussions or negotiations
regarding, or furnish to any Person any information with respect to, or take any
other action to facilitate any inquiries or the making of any proposal that
constitutes, or would reasonably be expected to lead to, any Acquisition
Proposal, or approve, endorse or recommend any Acquisition Proposal, or enter
into any letter of intent, agreement in principle, acquisition agreement or
other document or contract contemplating or otherwise relating to an Acquisition
Proposal, provided, however, that, the foregoing shall not prohibit Integrated
Media from furnishing information to or entering into discussions or
negotiations with, any Person that makes an unsolicited bona fide proposal to
enter into a business combination with Integrated Media pursuant to an
Acquisition Proposal which the board of directors of Integrated Media (or any
committee thereof considering such proposal) in good faith determines is
reasonably likely to be more favorable to the stockholders of Integrated Media
than the transactions contemplated by this Agreement (a “Superior Proposal”), so
long as:
(i) prior
to furnishing any information to, or entering into discussions or negotiations
with such a Person, Integrated Media provides twenty- four (24) hours’ advance
written notice to TeleChem to the effect that it is furnishing information to,
or entering into substantive discussions or negotiations with, a Person from
whom Integrated Media shall have received an executed confidentiality agreement
in form and substance satisfactory to TeleChem prior to furnishing such
information;
(ii) such
notice shall include the terms and conditions of such Acquisition Proposal or
any agreement proposed by, or any information supplied to, any such
Person;
(iii) prior
to furnishing any nonpublic information to any such Person, Integrated Media
furnishes such nonpublic information to TeleChem (to the extent that such
nonpublic information has not been previously furnished by Integrated Media to
TeleChem);
(iv) neither
Integrated Media nor any of its subsidiaries nor any of the Integrated Media
Representatives shall have violated any of the restrictions set forth in this
Section 5.07;
(v) such
unsolicited bona fide proposal relating to a Superior Proposal is
made by a third party that the board of directors of Integrated Media
(or any committee thereof considering such proposal) determines in
good faith has the good faith intent to proceed with negotiations to
consider such Superior Proposal;
(vi) the
board of directors of Integrated Media (or any committee thereof
considering such proposal), after duly considering the written advice
of outside legal counsel to Integrated Media, determines in good faith
that such action is required for the Board of Directors of Integrated
Media to comply with its fiduciary duties to stockholders imposed by
applicable law; and
(vii) Integrated
Media keeps TeleChem informed in all material respects of the status
and terms of any such negotiations or discussions (including without
limitation the identity of the Person with whom such negotiations or
discussions are being held) and provides TeleChem copies of such
written proposals and any amendments or revisions thereto
or correspondence related thereto.
(b) Integrated
Media shall notify TeleChem orally and in writing of the fact that it has
received inquiries, offers or proposals that it reasonably believes to be bona
fide with respect to an Acquisition Proposal within twenty-four (24) hours after
the receipt thereof. Integrated Media will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any other Person that have been conducted heretofore with respect to a potential
Acquisition Proposal. Integrated Media agrees to inform the
Integrated Media Representatives of the obligations undertaken in this Section
5.07; provided, however, that nothing contained in this Agreement shall prevent
the board of directors of Integrated Media from referring any third-party to
this Section 5.07.
(c) Integrated
Media agrees not to release or permit the release of any Person from, or to
waive or permit the waiver of any provision of, any confidentiality,
“standstill” or similar agreement to which Integrated Media or any of its
subsidiaries is a party, and will use its best efforts to enforce or cause to be
enforced each such agreement at the request of TeleChem.
(d) Except
as expressly permitted by this Section 5.07, neither the board of directors of
Integrated Media nor any committee thereof shall (A) withdraw, modify or change,
or propose publicly to withdraw, modify or change, in a manner adverse to
TeleChem, the approval by such board of directors or such committee of the board
of directors, approving or taking such action with respect to the Merger or this
Agreement, (B) approve or recommend, or propose publicly to approve or
recommend, any Superior Proposal or (C) cause Integrated Media to enter into any
letter of intent, agreement in principle, acquisition agreement or other similar
agreement (each, an “Acquisition Agreement”) related to any Acquisition
Proposal. Notwithstanding the foregoing, in the event that the Board
of Directors of Integrated Media (or any committee thereof considering an
Acquisition Proposal) determines in good faith, after consultation with outside
counsel, that in light of a Superior Proposal it is necessary to do so in order
to act in a manner consistent with its fiduciary duties to the stockholders of
Integrated Media under applicable law, the board of directors of Integrated
Media may (subject to this and the following sentences) withdraw, modify or
change its recommendation of the Merger, but only after twenty-four (24) hours
following TeleChem’s receipt of written notice advising TeleChem that the board
of directors of Integrated Media is prepared to do so, and only if, during such
twenty-four (24) hour period, Integrated Media and its advisors shall have
negotiated in good faith with TeleChem to make such adjustments in the terms and
conditions of this Agreement as would enable TeleChem to proceed with the
transactions contemplated herein on such adjusted terms.
(e) Nothing
contained in this Section 5.07 shall prohibit Integrated Media from taking and
disclosing to its stockholders a position contemplated by Rules 14d-9 and/or
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
stockholders of Integrated Media if, in the good faith judgment of the board of
directors of Integrated Media, after consultation with outside counsel, failure
so to disclose would be inconsistent with its obligations under applicable
law.
For purposes of this Section 5.07,
“Acquisition Proposal” means any offer or proposal for (whether or not in
writing and whether or not delivered to the stockholders of Integrated Media
generally), from any Person relating to any (a) direct or indirect acquisition
or purchase of assets (x) that constitute 15% or more of the assets of
Integrated Media and its subsidiaries taken as a whole or (y) for which 15% or
more of the net revenues or net income of Integrated Media and its subsidiaries
taken as a whole are attributable, (b) direct or indirect acquisition or
purchase of 15% or more of any class of equity securities of Integrated Media or
any of its subsidiaries whose business constitutes 15% or more of the net
revenues, net income or assets of Integrated Media and its subsidiaries, taken
as a whole, (c) tender offer or exchange offer that if consummated would result
in any Person beneficially owning 15% more of any class of equity securities of
Integrated Media or any of its subsidiaries whose business constitutes 15% or
more of the net revenues, net income or assets of Integrated Media and its
subsidiaries, taken as a whole, or (d) merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving Integrated Media or any of its subsidiaries whose business constitutes
15% or more of the net revenues, net income or assets of Integrated Media and
its subsidiaries, taken as a whole, other than the transactions contemplated by
this Agreement.
Section 5.08. Filing of
Current Report on Form 8-K. Promptly after execution of
this Agreement, Integrated Media shall file, if required or permitted under the
Exchange Act, a Current Report on Form 8-K (“8-K”) with the SEC to report the
Merger and terms thereof.
Section 5.09. Information
Statement. Integrated Media, with the cooperation and
assistance of TeleChem and its counsel, will prepare and distribute to the
holders of Integrated Media Common Stock Information Statement describing the
Merger.
Section 5.10. Section
16(b) Board Approval. Prior to Closing, the Board of Directors
of Integrated Media shall, by resolution duly adopted by such Board of Directors
or a duly authorized committee of “non-employee directors” thereof, approve and
adopt, for purposes of exemption from “short-swing” liability under Section
16(b) of the Exchange Act, the acquisition of Integrated Media Common Stock
and/or Integrated Media Common Stock at the Effective Time by officers and
directors of TeleChem who become, prior to, at, or following the Effective Time
of the Merger, officers or directors of Integrated Media as a result of the
conversion of shares of TeleChem Shares in the Merger and the assumption of any
TeleChem options or warrants by Integrated Media at the Effective
Time. Such resolution shall set forth the name of the applicable
“insiders” for purposes of Section 16 of the Exchange Act, the number of
securities to be acquired by each individual, that the approval is being granted
to exempt the transaction under Rule 16b-3 under the Exchange Act, and, for the
options and warrants of TeleChem to be assumed by Integrated Media at the
Effective Time, the material terms of the options and warrants to purchase
Integrated Media Common Stock acquired by such insiders as a result of the
assumption by Integrated Media of such options and warrants.
Section 5.11. Integrated
Media Reincorporation from Delaware to Nevada. On or before
the Effective Time Integrated Media will change its jurisdiction of organization
from the State of Delaware to the State of Nevada.
Section
5.12. Confidentiality. Each of Integrated Media and
its subsidiaries agrees that, until the earlier of (i) two years from the date
of this Agreement and (ii) the Effective Time:
(a) each
of Integrated Media and its subsidiaries will treat and hold as such all of the
Confidential Information, refrain from using any of the Confidential Information
except in connection with this Agreement, and deliver promptly to TeleChem or
destroy, at the request and option of TeleChem, all tangible embodiments (and
all copies) of the Confidential Information, including in electric or magnetic
form, which are in his, her or its possession;
(b) in
the event that any of Integrated Media and its subsidiaries is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, that Integrated Media and its
subsidiaries will notify TeleChem promptly of the request or requirement so that
TeleChem may seek an appropriate protective order or waive compliance with the
provisions of this Section 5.12; and
(c) if,
in the absence of a protective order or the receipt of a waiver hereunder, any
of Integrated Media or its subsidiaries is, on the advice of counsel, compelled
to disclose any Confidential Information to any tribunal or else stand liable
for contempt, that Integrated Media or its subsidiaries may disclose the
Confidential Information to the tribunal; provided, however, that the disclosing
party shall use his, her or its reasonable best efforts to obtain, at the
reasonable request of TeleChem, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as TeleChem shall designate.
ARTICLE
6
POST-CLOSING
COVENANTS
The
Parties agree as follows with respect to the period following the
Closing.
Section
6.01. General. In case at any time after the
Closing any further action is necessary to carry out the purposes of this
Agreement, each of the Parties will take such further actions (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting
Party.
Section
6.02. Transition. None of Integrated Media and its
subsidiaries will take any action that is designed or intended to have the
effect of discouraging any lessor, licensor, customer, supplier, or other
business associate of Integrated Media and its subsidiaries from maintaining the
same business relationships with Integrated Media and its subsidiaries after the
Closing as it maintained with Integrated Media and its subsidiaries prior to the
Closing.
Section 6.03. Obligations
of Shareholders. Shareholders, on behalf of new management of
Integrated Media, unconditionally agree: (i) to refrain from the issuance of any
securities pursuant to a registration statement on Form S-8 for a period of 12
months from and after the Effective Time (ii) not to change the number of issued
or outstanding shares of capital stock of Integrated Media by a stock split,
stock dividend, combination, reclassification, reverse stock split, combination
or reclassification of shares or other similar event for a period of 12 months
from and after the Effective Time, and except as a condition to a listing of
common stock on a national exchange, in which event the limitation period will
be 6 months (iii) not to issue any equity securities to any person, firm or
corporation for any purpose whatsoever for consideration less than the fair
market value applicable to the nature of the transaction of such securities, and
(iv) not to file a registration statement with the Securities and Exchange
Commission on Form SB-2 or other similar form covering offering of any class of
equity securities prior to the expiration of 6 months from and after the
Effective Time.
Section 6.04. Application
to Standard & Poor’s New management of Integrated Media
shall promptly make application to the Standard & Poor’s editorial board to
approve Integrated Media for a full description in Standard & Poor’s
Standard Corporation Manual, Standard & Poor’s Daily News Section, coverage
of Integrated Media as part of the S&P Market Access Program and coverage on
Standard & Poor’s Internet Site, www.advisorinsight.com, as well as S&P
Marketscope and the S&P Stock Guide database.
Section 6.05. Filing of
Amended Form 8-K Within 71 days after the original report on Form 8-K
must be filed, new management of Integrated Media will prepare and file with the
SEC an amendment to the Form 8-K described in Section 5.08 above that includes
the financial statements and pro forma financial information prepared pursuant
to Regulation S-X for the periods specified in Rule 3.05(b).
Section 6.06. Agreement to
Deliver Shares. As the owner of a
majority of the shares of TeleChem Securities, Shareholders agree to vote their
shares of TeleChem Securities in favor of approving this Agreement and the
transactions contemplated hereby and not to approve or support any competing
transaction,
Section 6.07. Plan of
Exchange. This Agreement is intended to constitute a “plan of
reorganization” within the meaning of Section 368(a)(2)(D) of the
Code. From and after the date of this Agreement and until the
Effective Time, each party shall use its reasonable best efforts to cause the
Exchange to qualify, and will not knowingly take any action, cause any action to
be taken, fail to take any action or cause any action to fail to be taken which
action or failure to act could prevent the Exchange from qualifying, as a
reorganization under the provisions of Section 368(a) of the
Code. Following the Effective Time, neither Integrated Media nor any
of its affiliates shall knowingly take any action, cause any action to be taken,
fail to take any action or cause any action to fail to be taken, which action or
failure to act could cause the Exchange to fail to qualify as a reorganization
under section 368(a) of the Code.
Section 6.08. Board of
Directors of Integrated Media. At the Effective Time, the
present Directors of Integrated Media shall have caused the appointment of the
persons designated by the Shareholders, to the Board of Directors of Integrated
Media followed by the resignation of all other officers and
directors. In connection with such election, Integrated Media shall
have provided its securityholders with an Information Statement pursuant to
Section 14f of the Exchange Act and SEC Rule 14f-1.
Section 6.09. Public
Announcements. The initial press release relating to this
Agreement shall be a joint press release the text of which has been agreed to by
each of Integrated Media and TeleChem.
Section 6.10. Conveyance
Taxes. Integrated Media shall be liable for and shall hold
TeleChem and the holders of TeleChem Securities who are holders of TeleChem
Securities immediately prior to the Effective Time harmless against any real
property transfer or gains, sales, use, transfer, value added, stock transfer or
stamp taxes, any transfer, recording registration, and other fees, and any
similar Taxes which become payable in connection with the transactions
contemplated by this Agreement. The parties acknowledge that this
Section 6.13 is specifically intended to benefit the holders of TeleChem
Securities who are holders of TeleChem Securities immediately prior to the
Effective Time.
Section 6.11. Change of Name and Trading
Symbol. At the Effective Time present management of Integrated
Media will cause the name of Integrated Media to change to TeleChem
International, Inc., or another name selected by the present management of
TeleChem. At the same time as the change of corporate name, the
trading symbol of Integrated Media will change to a symbol that is unique to the
new corporate name of Integrated Media.
ARTICLE
7
CONDITIONS
TO OBLIGATION TO CLOSE
Section 7.01. Conditions
to Obligation of TeleChem. The obligation of TeleChem to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) the
representations and warranties set forth in Article 4 shall be true and correct
in all material respects at and as of the Closing Date;
(b) Integrated
Media and its subsidiaries shall have performed and complied with all of their
covenants hereunder in all material respects through the Closing;
(c) Integrated
Media and its subsidiaries shall have procured all of the material third party
consents specified in Section 5.02;
(d) no
action, suit, or proceeding shall be pending or Threatened before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (i) prevent consummation of any
of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, (iii) affect adversely the right of TeleChem shareholders to own
Integrated Media Common Stock and/or Integrated Media Common Stock shares and to
control Integrated Media and its subsidiaries, or (iv) affect materially and
adversely the right of Integrated Media and its subsidiaries to own its assets
and to operate its businesses (and no such injunction, judgment, order, decree,
ruling, or charge shall be in effect);
(e) Integrated
Media and its subsidiaries shall have delivered to TeleChem a certificate,
substantially in the form of Exhibit B, to the effect that each of the
conditions specified above in Section 7.01(a)-(d) is satisfied in all
respects;
(f) the
Parties, Integrated Media and its subsidiaries shall have received all other
material authorizations, consents, and approvals of governments and governmental
agencies referred to in Section 4.03;
(g) TeleChem
shall have received from counsel to Integrated Media and Merger Sub an opinion,
substantially in the form of Exhibit E hereto, addressed to TeleChem and dated
as of the Closing Date;
(h) if
required by applicable rules of the SEC, at least ten (10) days prior to the
Closing Date, Integrated Media has mailed to its stockholders of record and
filed with the SEC the Information Statement, in compliance with the
requirements of Section 14f of the Exchange Act and Rule 14F-1
thereundr;
(i) At
Closing, TeleChem shall have received from Integrated Media:
(1) a
copy of the Certificate of Incorporation of Integrated Media as in effect
immediately prior to the Effective Time certified as of a recent date by the
Secretary of State of the State of Nevada;
(2) certificates,
as of the most recent practicable dates, as to the corporate good standing of
Integrated Media and its subsidiaries issued by the Secretary of State of the
State of Nevada and any other state in which Integrated Media and its
subsidiaries are required to be qualified or licensed to transact business,
confirming such good standing on or immediately prior to the Closing
Date;
(3) a
copy of the by-laws of Integrated Media in effect on the Closing Date certified
by the Secretary of Integrated Media as of the Closing Date;
(4) resolutions
of the Board of Directors of Integrated Media and Merger Sub, authorizing and
approving all matters in connection with this Agreement (including matters set
forth in Section 5.10) and the transactions contemplated hereby, certified by
the Secretary of Integrated Media as of the Closing Date;
(5) stock
certificates representing the Integrated Media Common Stock issuable pursuant to
Article 2 upon presentation of the Certificates; and
(6) such
other documents as TeleChem may reasonably request;
(j) all
actions to be taken by Integrated Media in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to TeleChem.
TeleChem
may waive any condition specified in this Section 7.01 if it executes a writing
so stating at or prior to the Closing.
Section 7.02 Conditions to Obligation
of Integrated Media. The obligation of Integrated Media to
consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(a) the
representations and warranties set forth in Article 3 shall be true and correct
in all material respects at and as of the Closing Date;
(b) TeleChem
shall have performed and complied with all of its covenants hereunder in all
material respects through the Closing;
(c) no
action, suit, or proceeding shall be pending before any court or quasi-judicial
or administrative agency of any federal, state, local, or foreign jurisdiction
or before any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (i) prevent consummation of any of the
transactions contemplated by this Agreement or (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
(d) TeleChem
shall have delivered to Integrated Media a certificate, substantially in the
form of Exhibit C, to the effect that each of the conditions specified above in
Section 7.02(a)-(c) is satisfied in all respects;
(e) the
Parties and Integrated Media shall have received all other material
authorizations, consents, and approvals of governments and governmental agencies
referred to in Section 4.03; and
(f) all
actions to be taken by TeleChem in connection with consummation of the
transactions contemplated hereby and all certificates, opinions, instruments,
and other documents required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to Integrated
Media.
(g) Integrated
Media shall have received from counsel to TeleChem an opinion, substantially in
the form of Exhibit F hereto, addressed to Integrated Media and dated as of the
Closing Date;
(h) At
Closing, Integrated Media shall have received from TeleChem:
(1) a
certified copy of the Certificate of Incorporation of TeleChem as in effect
immediately prior to the Effective Time certified as of a recent date by the
Secretary of TeleChem;
(2) certificates,
as of the most recent practicable dates, as to the corporate good standing of
TeleChem and its subsidiaries issued by the Secretary of State of the State of
Delaware and any other state in which TeleChem and its subsidiaries are required
to be qualified or licensed to transact business, confirming such good standing
on or immediately prior to the Closing Date;
(3) a
copy of the by-laws of TeleChem in effect on the Closing Date certified by the
Secretary of TeleChem as of the Closing Date;
(4) resolutions
of the Board of Directors of TeleChem, authorizing and approving all matters in
connection with this Agreement and the transactions contemplated hereby,
certified by the Secretary of TeleChem as of the Closing Date;
(5) stock
certificates representing the TeleChem Shares pursuant to Section 2.06 upon
presentation of the Integrated Media Common Stock;
(6) such
other documents as Integrated Media may reasonably request;
(i) The
period of time in which TeleChem stockholders may perfect appraisal rights with
respect to the Merger shall have expired, and Dissenting Shares shall constitute
not more than 2% of the TeleChem Shares outstanding immediately prior to the
Effective Time.
Integrated
Media may waive any condition specified in this Section 7.02 if it executes a
writing so stating at or prior to the Closing.
ARTICLE
8
TERMINATION
(a) by
mutual written consent of Integrated Media, Merger Sub and
TeleChem;
(b) by
either Integrated Media or TeleChem if the Merger shall not have been
consummated by the sixty (60) day anniversary of the date of this Agreement
(such date as it may be extended in accordance with this Section 8.01(b),
the “Outside Date ”), which date may be extended to the ninety (90) day
anniversary of the date of this Agreement upon written notice of either
Integrated Media or TeleChem to the other party on or prior to the sixty
(60) day anniversary of the date of this Agreement, provided that all
conditions to the closing of the Merger set forth in Article 8 shall have been
satisfied, other than those that by their nature can be satisfied only at
closing; provided that the right to terminate this Agreement under this Section
8.01(b) shall not be available to any party whose material breach of this
Agreement has been a principal cause of or resulted in the failure of the Merger
to occur on or before the Outside Date;
(c) by
either Integrated Media or TeleChem if a Governmental Body of competent
jurisdiction shall have enacted a Legal Requirement or issued a nonappealable
final order, decree, regulation or ruling or taken any other nonappealable final
action, in each case having the effect of permanently restraining, enjoining or
otherwise prohibiting the Merger;
(d) by
Integrated Media, following a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of TeleChem set
forth in this Agreement, which breach or failure to perform (i) would cause
any of the conditions set forth in Section 7.02 not to be satisfied, and
(ii) if curable, shall not have been cured prior to the earlier of twenty
(20) days following receipt by TeleChem of written notice from Integrated Media
of such breach or failure to perform or the Outside Date;
(e) by
TeleChem, if there has been a breach of or failure to perform any
representation, warranty, covenant or agreement on the part of Integrated Media
or Merger Sub set forth in this Agreement, which breach or failure to perform
(i) would cause any of the conditions set forth in Section 7.01 not to
be satisfied, and (ii) if curable, shall not have been cured prior to the
earlier of twenty (20) days following receipt by Integrated Media of
written notice from TeleChem of such breach or failure to perform from TeleChem
or the Outside Date; or
(f) by
TeleChem, if TeleChem shall have paid Integrated Media the Termination Fee as
provided under Section 8.03.
Section 8.03. Fees and Expenses.
(a) Except
as set forth in this Section, all fees and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees and expenses, whether or not the Merger is
consummated; provided, however, that Integrated Media shall pay all fees and
expenses, other than accountants’ and attorneys’ fees, incurred with respect to
the printing, filing and mailing of the Information Statement (including any
related preliminary materials) and any amendments or supplements
thereto.
(b) TeleChem
shall pay Integrated Media a termination fee equal to $100,000 (which amount is
approximately equal to .25% of the enterprise value of TeleChem at the Exchange
Ratio (the “Termination Fee ”) in the event of the termination of this
Agreement:
(i) by
Integrated Media pursuant to Section 8.01(d); or
(ii) by
TeleChem pursuant to Section 8.01(f).
(c) Any
fee due under Section 8.03(b) shall be paid by wire transfer of same-day funds
within one (1) business day after the date of termination of this
Agreement.
(d) The
parties acknowledge that the agreements contained in this Section 8.03 are
an integral part of the transactions contemplated by this Agreement, and that,
without these agreements, the parties would not enter into this Agreement. If
either party fails to promptly pay to the other party any fee due hereunder, the
non-paying party shall pay the costs and expenses (including legal fees and
expenses) in connection with any action, including the filing of any lawsuit or
other legal action, taken to collect payment, together with interest on the
amount of any unpaid fee at the publicly announced prime rate of Bank of
America, N.A. plus two (2%) percent per annum, compounded quarterly, from the
date such expense reimbursement or fee was required to be paid. Payment of the
fees and expenses described in this Section 8.03 shall not be in lieu of
liability pursuant to clause (i) of Section 8.02.
ARTICLE
9
MISCELLANEOUS
Section 9.01. Press
Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of
Integrated Media and TeleChem, provided, however, that any Party may make any
public disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to advise the
other Parties prior to making the disclosure).
Section 9.02. No Third
Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns, except for Section 6.03.
Section 9.03. Entire
Agreement. This Agreement (including the documents referred to herein)
constitutes the entire agreement among the Parties and supersedes any prior
understandings, agreements, or representations by or among the Parties, written
or oral, to the extent they relate in any way to the subject matter hereof,
except for the Confidentiality Agreement by and between Integrated Media and
TeleChem.
Section 9.04. Succession
and Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign either this Agreement or any
of his, her or its rights, interests, or obligations hereunder without the prior
written approval of Integrated Media and TeleChem.
Section
9.05. Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which together will constitute one and the same instrument.
Section
9.06. Headings. The section headings
contained in this Agreement are inserted for convenience only and shall not
affect in any way the meaning or interpretation of this Agreement.
Section
9.07. Notices. All notices, requests, demands,
claims, and other communications hereunder will be in writing. Any
notice, request, demand, claim, or other communication hereunder shall be deemed
duly given if (and then two business days after) it is sent by (a) confirmed
facsimile; (b) overnight delivery; or (c) registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
|
|
If
to TeleChem:
|
TeleChem
International, Inc.
|
524 East Weddell Drive
Sunnyvale, CA 94089
Attention: Rene’ A. Schena,
President
Fax number: (408) 744-1711
With a
copy (that shall not constitute notice) to:
Joel Pensley
Attorney at Law
211 Schoolhouse Road
Norfolk, Connecticut
Fax number: (212) 898-1266
If to
Integrated
Media: Integrated
Media Holdings Inc.
12000 Westheimer Rd Ste
340
Houston, TX 77077-6531
Attention:
William L. Sklar, Chief Executive Officer
Fax
Number: (713) 462-1980
With a
copy (that shall not constitute notice) to:
Sonfield & Sonfield
770 South Post Oak Lane
Houston, Texas 77056
Attention: Robert L. Sonfield, Jr.,
Esq.
Fax number: (713) 877-1547
Any Party
may send any notice, request, demand, claim, or other communication hereunder to
the intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, telecopy,
telex, ordinary mail, or electronic mail), but no such notice, request, demand,
claim, or other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
Section 9.08. Governing
Law. This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Nevada without giving effect
to any choice or conflict of law provision or rule (whether of the State of
Nevada or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the State of Nevada.
Section 9.09. Amendments
and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by Integrated
Media and TeleChem. No waiver by any Party of any default,
misrepresentation, or breach of warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
occurrence.
Section
9.10. Severability. Any term or provision of this
Agreement that is invalid or unenforceable in any situation in any jurisdiction
shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
Section
9.11. Expenses. Each of the Parties will bear his,
her or its own costs and expenses (including legal fees and expenses) incurred
in connection with this Agreement and the transactions contemplated
hereby.
Section
9.12. Construction. The Parties have participated
jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The
word “including” shall mean including without limitation.
Section
9.13. Incorporation of Exhibits and Schedules. The
Exhibits, Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
Section 9.14. Specific
Performance. Each of the Parties acknowledges and agrees that
the other Parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 9.15 below), in addition to any other remedy to which they may
be entitled, at law or in equity.
Section 9.15. Submission
to Jurisdiction. Each of the Parties submits to the
jurisdiction of any state or federal court sitting in Houston, Texas, in any
action or proceeding arising out of or relating to this Agreement and agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any
action or proceeding arising out of or relating to this Agreement in any other
court. Each of the Parties waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any bond,
surety, or other security that might be required of any other Party with respect
thereto. Any Party may make service on any other Party by sending or
delivering a copy of the process to the Party to be served at the address and in
the manner provided for the giving of notices in Section 9.07
above. Nothing in this Section 9.15, however, shall affect the right
of any Party to bring any action or proceeding arising out of or relating to
this Agreement in any other court or to serve legal process in any other manner
permitted by law or at equity. Each Party agrees that a final
judgment in any action or proceeding so brought shall be conclusive and may be
enforced by suit on the judgment or in any other manner provided by law or at
equity.
Execution
Page
AGREEMENT
AND PLAN OF MERGER
among
INTEGRATED
MEDIA HOLDINGS, INC.
(a
Delaware corporation)
TCI
ACQUISITION CORP.
(a
Nevada corporation)
TELECHEM
INTERNATIONAL, INC.
(a
Delaware corporation)
and
THE
SHAREHOLDERS OF TELECHEM INTERNATIONAL, INC.
DATED
AS OF FEBRUARY 5, 2008
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
|
INTEGRATED
MEDIA HOLDINGS, INC.
|
TELECHEM
INTERNATIONAL, INC.
|
|
a
Delaware corporation
|
a
Delaware corporation
|
|
By:
William
L. Sklar, Chief Executive Officer
Date:
________________________
|
By:
Rene’
A. Schena, Chief Executive Officer
Date:
________________________
|
|
TCI
ACQUISITION CORP.
|
ENDAVO
MEDIA AND COMMUNICATIONS, INC.
|
|
a
Nevada corporation
|
a
Delaware corporation
|
|
By:
William
L. Sklar, Chief Executive Officer
Date:
________________________
|
By:______________________________________
Paul
D. Hamm, Chief Executive Officer
Date:
________________________
|
|
_____________________________________
Rene’
A. Schena, Individually
Date:
________________________
|
__________________________________________
Todd
J. Martinsky, Individually
Date:
________________________
|
EXHIBIT
A
Certificates
to be Exchanged
Pursuant
to Section 2.06
Each
outstanding share of TeleChem Stock will be exchanged for the number of
Integrated Media Common Stock set out below
|
Name
& Address of Shareholder
|
TeleChem
Stock
|
Integrated
Media Common Stock
|
|||
|
Rene’
A. Schena
524
East Weddell Drive
Sunnyvale,
CA 94089
|
41.55%
|
15,000,000
|
|||
|
Todd
J. Martinsky
524
East Weddell Drive
Sunnyvale,
CA 94089
|
27.70%
|
10,000,000
|
|||
|
Mark
Schena
524
East Weddell Drive
Sunnyvale,
CA 94089
|
13.85%
|
5,000,000
|
|||
|
Paul
Haje
|
13.85%
|
5,000,000
|
|||
|
Cole
BusinessDevelopment, LLC
|
3.05%
|
1,100,000
|
|||
|
Total
|
100.0%
|
36,100,000
|
EXHIBIT
B
Form
of Officer’s Certificate of Integrated Media Concerning Accuracy
Pursuant
to Section 7.01
THE UNDERSIGNED HEREBY CERTIFIES,
individually and on behalf of Integrated Media Holdings, Inc., a Nevada
corporation (“Integrated Media”) pursuant to Section 7.01 of the Agreement and
Plan of Merger (the “Agreement”), dated February 5, 2008 that I am the duly
elected and qualified president of Integrated Media, and that all
representations and warranties of Integrated Media and contained in the
Agreement were accurate when made and, in addition, are accurate as of the
Closing (as defined in the Agreement) as though such representations and
warranties were made as of the Closing in exactly the same language by
Integrated Media and regardless of knowledge or lack thereof on the part of
Integrated Media and or changes beyond their or his control, and as of the
Closing Integrated Media has performed and complied with all covenants and
agreements and satisfied all conditions required to be performed and complied
with by any of them at or before such time by the Agreement.
IN WITNESS WHEREOF, I have hereunto set
my hand, and the seal of Integrated Media and this 5th day of
February 2008.
___________________________________
William
L. Sklar
EXHIBIT
C
Form
of Officer’s Certificate of TeleChem Concerning Accuracy
Pursuant
to Section 7.02
THE UNDERSIGNED HEREBY CERTIFIES,
individually and on behalf of TeleChem International, Inc., a Nevada corporation
(“TeleChem”) pursuant to Section 7.02 of the Agreement and Plan of Merger (the
“Agreement”), dated February 5, 2008 that I am the duly elected and qualified
CEO of TeleChem, and that all representations and warranties of TeleChem and
contained in the Agreement were accurate when made and, in addition, are
accurate as of the Closing (as defined in the Agreement) as though such
representations and warranties were made as of the Closing in exactly the same
language by TeleChem and regardless of knowledge or lack thereof on the part of
TeleChem and or changes beyond their or his control, and as of the Closing
TeleChem, has performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by any of
them at or before such time by the Agreement.
IN
WITNESS WHEREOF, I have hereunto set my hand, and the seal of TeleChem and this
5th
day of February 2008.
Rene’ A.
Schena
EXHIBIT
D
Form
of Investment Representation
Pursuant
to Section 7.02(c)
Mr.
William L. Sklar
President
Integrated
Media Holdings, Inc.
12000
Westheimer Rd Ste 340
Houston,
TX 77077-6531
Dear Mr.
Sklar:
In connection with our proposed
acquisition of shares of common stock (the “Shares”) of Integrated Media
Holdings, Inc., a Delaware corporation (“Integrated Media”), in accordance with
the terms of the Agreement and Plan of Merger dated February 5, 2008 among
Integrated Media, TeleChem International, Inc., a Delaware corporation and TCI
Acquisition Corp., a Nevada corporation, we confirm that:
1. We
are familiar with the business and financial condition, properties, operations
and prospects of Integrated Media and, at a reasonable time prior to the
execution of this letter, has been afforded the opportunity to ask questions of
and received satisfactory answers from the chief executive officer or other
persons acting on Integrated Media’s behalf, concerning the business and
financial condition, properties, operations and prospects of Integrated Media
and concerning the terms and conditions of the offering of the Shares and have
asked such questions as we desired to ask and all such questions have been
answered to our full satisfaction.
2. We
understand that, unless we notify Integrated Media in writing to the contrary
before acceptance of this subscription, all the representations and warranties
contained in this letter will be deemed to have been reaffirmed and confirmed as
of the date of acceptance of this subscription, taking into account all
information received by us.
3. We
understand that acquisition of the Shares involves various risks, including, but
not limited to, those disclosure to us and in this letter.
4. All
documents, records and books pertaining to our proposed investment in the Shares
which we have requested have been made available to us.
5. We
understand that the issuance of the Shares of Integrated Media have not been
registered under the Securities Act of 1933, as amended (the “1933
Act”). The offering is being made in reliance upon the exemption from
registration provided by section 4(2) of the 1933 Act and the provisions of
Regulation D Rule 506 promulgated under the 1933 Act (“Regulation
D”).
6. We
are (i) an “accredited investor”(as defined in Rule 50l(a) of Regulation D under
the Securities Act), and (ii) we are acquiring the Shares for our own account,
for investment purposes and not with a view to, or for offer or sale in
connection with any distribution in violation of the Securities Act and we have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Shares, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
Upon transfer the Shares are to be
registered in the name of the beneficial owner as follows:
Name ________________________________
Address: ________________________________
________________________________
_________________________________
You and the Transfer Agent are entitled
to rely upon this letter and you are irrevocably authorized to produce this
letter or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.
Yours
very truly,
___________________________________
Name:
_____________________________
Number of
Shares: ___________________
Date:
______________________________
EXHIBIT
E
Opinion
of Integrated Media and Integrated Media Sub’s Counsel
Pursuant
to Section 7.01(g)
Sonfield
& Sonfield
A
Professional Corporation
|
LEON
SONFIELD (1865-1934)
GEORGE
M. SONFIELD (1899-1967)
ROBERT
L. SONFIELD (1893-1972)
____________________
FRANKLIN
D. ROOSEVELT, JR. (1914-1988)
|
ATTORNEYS
AT LAW
770
SOUTH POST OAK LANE
HOUSTON,
TEXAS 77056-1913
www.sonfield.com
Telecopier
(713) 877-1547
____
Telephone
(713) 877-8333
|
ROBERT
L. SONFIELD, JR.
Managing
Director
robert@sonfield.com
Legal
Assistant
Kate
Parks
|
February
___, 2008
TeleChem
International, Inc.
524 East
Weddell Drive
Sunnyvale,
CA 94089
Ladies
and Gentlemen:
We are acting as counsel to Integrated
Media Holdings, Inc., a Delaware corporation (the “Parent”) and TCI Acquisition
Corp., a Nevada corporation (“Merger Sub”) in connection with the transactions
contemplated by the Agreement and Plan of Merger dated as of February 5, 2008
(the “Agreement”) by and among the Parent, Merger Sub, TeleChem International,
Inc. (“TeleChem”), a Delaware corporation and the stockholders of TeleChem (the
“Shareholders”).
In our examination we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies. As to
any facts material to this opinion which we did not independently establish or
verify, we have relied upon statements and representations of Parent and, its
officers and other representatives and of public officials.
In rendering the opinions set forth
herein, we have examined and relied on originals or copies, certified or
otherwise identified to our satisfaction, of the following:
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|
(i)
|
the
Agreement;
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|
|
(ii)
|
the
certificate of the officers of Parent dated the date hereof (the
“Officers' Certificate”);
|
|
|
(iii)
|
certified
copies of the Articles of Incorporation and By-Laws, each as amended, of
Parent;
|
|
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(iv)
|
Articles
of Incorporation of Merger Sub;
|
|
|
(v)
|
a
certified copy of certain resolutions duly adopted by the Board of
Directors of Parent;
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|
(vi)
|
a
certified copy of certain resolutions duly adopted by the Stockholders of
Merger Sub; and
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|
|
(vi)
|
such
other documents as we have deemed necessary or appropriate as a basis for
the opinion set forth below.
|
Members of this firm are admitted to
practice in the State of Texas. We express no opinion as to the laws
of any jurisdiction other than (i) the laws of the State of Texas; and (ii) the
federal laws of the United States of America to the extent specifically referred
to herein.
As to factual matters, we have relied
without investigation on the Officers' Certificate provided by Parent and the
representations and warranties contained in the Agreement.
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|
(i)
|
Parent
is a corporation duly organized, validly existing and in good standing
under the laws of the State of
Delaware;
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(ii)
|
Parent
has the corporate power to carry on their business as now being
conducted;
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|
(iii)
|
Merger
Sub is a corporation duly organized, validly existing and in good standing
under the laws of the State of
Nevada;
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(iv)
|
The
Agreement has been duly authorized, executed and delivered by Parent and
Merger Sub and is a valid and binding obligation of Parent and Merger Sub
enforceable in accordance with its terms, except to the extent that
enforcement is limited by applicable bankruptcy, reorganization,
insolvency, moratorium, or similar laws affecting creditors' rights and
remedies generally or by general equity principles (and excepting specific
performance as a remedy);
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(v)
|
Parent
and Merger Sub have taken all internal action necessary for their due
performance under the Agreement;
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(vi)
|
The
execution and delivery by Parent and Merger Sub of the Agreement and the
consummation of the transactions contemplated hereby will not conflict
with or result in a breach of any provisions of, Parent's Articles of
Incorporation, Parent’s By-Laws, Merger Sub’s Articles of Organization or
Operating Arrangement or, to the best of counsel's knowledge after inquiry
and based upon information provided by Parent and Merger Sub, constitute a
default under or give rise to a right of termination, acceleration, or
cancellation under any agreement under which Parent, Merger Sub or any of
their properties are bound or violate any court order, writ or decree of
injunction applicable to Parent or Merger
Sub;
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|
|
(vii)
|
Such
counsel does not know, after inquiry, of any actions, suits or other legal
proceedings or investigations pending or threatened against or relating
to, materially adversely affecting Parent or Merger Sub;
and
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(viii)
|
All
of the outstanding shares of Parent's common stock are validly issued,
fully-paid and non-assessable, without preemptive
rights.
|
This opinion is being furnished only to
you and is solely for your benefit and is not to be used, circulated, quoted,
relied upon or otherwise referred to for any purpose without prior written
consent except that the Shareholders, individually or collectively may rely on
this opinion as if it were addressed to each Shareholder.
Yours
very truly,
SONFIELD
& SONFIELD
EXHIBIT
F
Opinion
of TeleChem International, Inc. Counsel
Pursuant
to Section 7.02(g)
JOEL
PENSLEY
Attorney
at Law
211
Schoolhouse Road
Norfolk,
Connecticut 06058
Admitted
in New York State
February
___, 2008
Integrated
Media Holdings, Inc.
12000
Westheimer Rd Ste 340
Houston,
TX 77077-6531
Ladies
and Gentlemen:
I am acting as counsel to TeleChem
International, Inc., a Delaware corporation, (“TeleChem”) and the stockholders
of TeleChem (the “Shareholders”), in connection with the transaction
contemplated by the Agreement and Plan of Merger (the “Merger Agreement”)
entered into by and among Integrated Media Holdings, Inc., a Nevada corporation
(“Integrated Media”), TeleChem, Rene’ A. Schena and Todd J. Martinsky,
shareholders of TeleChem (“Shareholders”) and TCI Acquisition Corp., a Nevada
corporation, and a wholly owned subsidiary of Integrated Media (“Merger Sub”),
in connection with the merger of Merger Sub with and into TeleChem (the
“Merger”).
In my examination, I have
assumed the genuineness of all signatures, the legal capacity of natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified
or photostatic copies, and the authenticity of the originals of such
copies. As to any facts material to this opinion which we did not
independently establish or verify, we have relied upon statements and
representations of TeleChem and its officers and Shareholders and their
representatives and of public officials.
In rendering the opinions set forth
herein, we have examined and relied on originals or copies, certified or
otherwise identified to our satisfaction, of the following:
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|
(i)
|
the
Agreement;
|
|
|
(ii)
|
the
certificate of the officers of TeleChem, dated the date hereof (the
“Officers' Certificate”);
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|
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(iii)
|
certified
copies of the Certificate of Incorporation and By-Laws, each as amended,
of TeleChem;
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|
(iv)
|
certified
copy of certain resolutions duly adopted by the Board of Directors and
Shareholders of TeleChem;
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(v)
|
such
other documents as we have deemed necessary or appropriate as a basis for
the opinion set forth below.
|
I am admitted to practice in the State
of New York. I express no opinion as to the laws of any jurisdiction
other than (i) the laws of the State of New York; and (ii) the federal laws of
the United States of America to the extent specifically referred to
herein.
As to factual matters, I have relied
without investigation on the Officers' Certificate provided by TeleChem and the
representations and warranties contained in the Agreement.
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(i)
|
TeleChem
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and is duly qualified to do
business in any jurisdiction where so
required;
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(ii)
|
TeleChem
has the corporate power to carry on its business as now being
conducted;
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(iii)
|
The
Agreement has been duly authorized, executed and delivered by TeleChem and
Shareholders, and is a valid and binding obligation of TeleChem and
Shareholders, enforceable in accordance with its terms, except to the
extent that enforcement is limited by applicable bankruptcy,
reorganization, moratorium, insolvency or similar laws affecting
creditors' rights and remedies generally or by general equity principles
(and excluding specific performance as a remedy), including limitations on
enforcement by reason of fraudulent conveyance and corporate and other
laws restricting indemnification by corporations, shareholders of a
corporation, or its affiliates;
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(iv)
|
Except
as referred to herein, such counsel knows, after inquiry, of no actions,
suit or other legal proceedings or investigations pending or threatened
against or relating to or materially adversely affecting
TeleChem;
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(v)
|
The
execution and delivery by TeleChem of the Agreement and the consummation
of the transactions contemplated hereby will not conflict with or result
in a breach of any provisions of TeleChem's Certificate of Incorporation
or By-Laws or, to the best of such counsel's knowledge, after inquiry, and
based upon information provided by TeleChem and its officers and
directors, constitute a default under or give rise to a right of
termination, acceleration, or cancellation under any agreement under which
TeleChem or any of its properties are bound or violate any court order,
writ or decree of injunction applicable to TeleChem;
and
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|
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(vi)
|
The
authorized capitalization of TeleChem is as set forth in Section 3.03 of
the Agreement, all of the outstanding shares of common stock of TeleChem
are validly issued, fully-paid and non-assessable, without preemptive
rights, and to the best of counsel's knowledge, after inquiry, there are
no outstanding subscriptions, options, rights, warrants or other transfer
agreements (whether oral or written) obligating TeleChem to issue or
transfer from treasury any of its securities except as set forth in the
Agreement. When duly transferred as provided in the Agreement,
to the best of counsel’s knowledge after inquiry, Parent will own all of
the equity interest of TeleChem.
|
This opinion is being furnished only to
you and is solely for your benefit and is not to be used, circulated, quoted,
relied upon or otherwise referred to for any purpose without prior written
consent.
Yours
very truly,
Joel
Pensley
EXHIBIT
G
TRUST
RECEIPT
IRREVOCABLE
INSTRUCTIONS
AND
IRREVOCABLE
PROXY
THIS TRUST RECEIPT, IRREVOCABLE
INSTRUCTIONS AND IRREVOCABLE PROXY (this “Agreement”) is entered into as
of the 5th day of
February, 2008, by and among Integrated Media Holdings Inc., a Delaware
corporation (“Integrated Media”), Endavo Media and Communications, Inc., a
Delaware corporation (“Endavo”) and Paul D. Hamm, a natural person residing in
Atlanta Georgia (“Hamm”).
RECITALS
WHEREAS, Integrated Media is
the record and beneficial owner of all of the issued and outstanding shares of
capital stock of Endavo (the “Endavo Shares”);
WHEREAS, Hamm is the Chief
Executive Officer of Endavo;
WHEREAS, this Agreement is
made and entered into in connection with the Agreement and Plan of Merger (the
“Merger Agreement”) entered into by Integrated Media, TeleChem, Rene’ A. Schena
and Todd J. Martinsky, shareholders of TeleChem (“Shareholders”), Endavo and TCI
Acquisition Corp., a Nevada corporation, and a wholly owned subsidiary of
Integrated Media (“Merger Sub”), in connection with the merger of Merger Sub
with and into TeleChem (the “Merger”);
WHEREAS, in accordance with
the terms of the Merger Agreement, Integrated Media desires to deliver a
certificate (the “Endavo Certificate”) representing the Endavo Shares to Hamm
with irrevocable instructions for the disposition of the Endavo Certificate
coupled with an irrevocable proxy; and
WHEREAS, Hamm is willing to
receive and receipt for the Integrated Media Certificate, hold, dispose of and
vote same in accordance with the terms of this Agreement.
AGREEMENT
1. Delivery of Endavo
Certificate. Integrated Media, acting
by and through its duly authorized officers, does hereby deliver to Hamm the
Endavo Certificate in the form of certificate number ___ dated _________ and
representing __________________ shares of common stock of Endavo.
2. Receipt of Endavo
Certificate. Hamm hereby acknowledges receipt, in trust, of
the Endavo Certificate and agrees to hold, dispose of and vote same in
accordance with the terms of this Agreement.
3. Proxy. Integrated
Media, as the record and beneficial owner of the Endavo Shares, does hereby
constitute and appoint Hamm its true and lawful attorney-in-fact and agent, with
full power of substitution and revocation, to represent it and to vote its
shares of stock of Endavo at any meeting of the shareholders of such corporation
or to adopt my majority consent of shareholders any and all resolutions of
Endavo and execute any and all documents in connection therewith, granting unto
said attorney-in-fact and agent full power and authority to do and perform each
and every act and thing requisite and necessary to be done as fully for all
intents and purposes as Integrated Media might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent, or its
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
4. Proxy
Irrevocable. This proxy is coupled with an interest sufficient
in law to support a proxy and is irrevocable pursuant to Section 212(e) or the
Delaware General Corporation Law until the Endavo Certificate is disposed of as
provided in the next succeeding paragraph.
5. Instruction for Disposition of Endavo
Certificate. Integrated Media hereby irrevocably instructs
Hamm to hold the Endavo Certificate, in trust, for the benefit of Integrated
Media until (i) the Effective Time of the Merger (as defined in Section 2.02 of
the Merger Agreement), and (ii) certificates representing the warrants to
purchase shares of common stock of Integrated Media registered in the name of
Paul D. Hamm have been delivered to, or for the account of, Integrated Media in
accordance with the terms of the Merger Agreement. Upon satisfaction
of the above and foregoing conditions, ownership and possession of the Endavo
Certificate will be transferred to Hamm without any further action by any
party.
In the
event the Merger Agreement is not consummated on or before June 30, 2008, the
terms of this Agreement shall remain in full force and effect until a merger
agreement upon terms similar to the Merger Agreement is executed and
consummated.
6. Execution. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. A facsimile signature by any party on a
counterpart of this Agreement shall be binding and effective for all
purposes. Such party shall, however, subsequently deliver to the
other party an original executed copy of this Agreement.
EXECUTED as of the day first
above written.
|
INTEGRATED
MEDIA HOLDINGS INC.
By:____________________________________
William
L. Sklar, President and CEO
|
ENDAVO
MEDIA AND COMMUNICATIONS, INC.
By:
Paul
D. Hamm
|
|
|
Paul
D. Hamm, Individually
|
EXHIBIT
H
CAPITALIZATION
OF INTEGRATED MEDIA AS OF THE EFFECTIVE TIME
Total
shares authorized: 500,000,000 consisting of 480,000,000 common
shares and 20,000,000 preferred shares
Shares of
common stock not at the time designated as shares of a particular series may be
issued from time to time in one or more additional series or without any
distinctive designation
Shares of
preferred stock not at the time designated as shares of a particular series may
be issued from time to time in one or more additional series.
Common
shares outstanding: 11,537,860
Warrants
outstanding: 1,250,000, 5 year term, $.01 strike price, cashless exercise, 60
days notice to exercise
Warrants
outstanding: in the amounts, for the term, the exercise price and held by the
persons listed on Section 4.01 of the Integrated Media Disclosure
Schedule
Common
shares reserved for financing: 5,000,000
Reserved
for TeleChem shareholders: 35,000,000
Reserved
for Cole Business Development, LLC: 1,100,000
|
|
|
Exhibit 1.02
Amendment
to Agreement and Plan of Merger by and among Integrated Media Holdings, Inc.,
Telechem International, Inc., the Shareholders of Telechem International, Inc.,
Endavo Media and Communications, Inc., and TCI Acquisition Corp.
|
|
|
AMENDMENT
TO
AGREEMENT
AND PLAN OF MERGER
This AMENDMENT TO AGREEMENT AND PLAN
OF MERGER (“Agreement”) is entered into as of February 11, 2008, by and
among Integrated Media Holdings, Inc., a Delaware corporation (“Integrated
Media”), TeleChem International, Inc., a Delaware corporation (“TeleChem”),
Rene’ A. Schena and Todd J. Martinsky, majority shareholders of TeleChem
(“Shareholders”), Endavo Media and Communications, Inc., a Delaware corporation
(“Endavo”) and TCI Acquisition Corp., a Nevada corporation, and wholly owned
subsidiary of Integrated Media (“Merger Sub”). Integrated Media,
TeleChem, Endavo, Merger Sub and Shareholders are referred to collectively
herein as the “Parties.”
R E C I T A L
S:
As of the
5th
day of February, 2008 the Parties entered into an Agreement and Plan of Merger
(the “Plan”) whereby Merger Sub, upon the terms and subject to the conditions of
the Plan and in accordance with the applicable sections of the Nevada Revised
Statutes (“Nevada Law”) and General Corporation Law of Delaware (“Delaware
Law”), will merge with and into TeleChem (the
“Merger”). Simultaneously with the merger of Merger Sub with and into
TeleChem, the Shareholders will exchange their TeleChem Shares for shares of the
common stock of Integrated Media. Integrated Media will divest its
wholly-owned subsidiary, Endavo and Integrated Media will change its domicile
from Delaware to Nevada.
Pursuant
to the terms of the Plan, the Shareholders will be issued approximately 73.50%
of the issued and outstanding shares immediately after the
issuance. The Plan contemplates that there will be a sufficient
number of authorized and unissued Integrated Media common stock after: (i)
reincorporation to Nevada and governance by the Nevada Articles, (ii) completion
of the reverse split of the outstanding Integrated Media common stock, (iii)
conversion of all outstanding shares of convertible preferred stock, and (iv)
conversion of all outstanding notes, bonds and debentures.
As a
result, the Merger may not be consummated until 20 days after the Form 14C is
mailed to the Integrated Media shareholders. As presently filed with
the Securities and Exchange Commission, the 14C cannot be mailed any earlier
than February 17, 2008.
However,
the Parties desire to transfer control to the Shareholders and change the board
of directors of Integrated Media to the Shareholders on or about February 21,
2008.
Pursuant
to Section 2.11 of the Plan, Integrated Media will transfer all of its interest
in Endavo to Paul D. Hamm in exchange for the cancellation of 1,750,000 common
stock purchase options owned by Mr. Hamm. The Parties desire Integrated Media to
also transfer all of its interest in Bidchaser, Inc. to Paul D. Hamm without any
consideration.
THEREFORE, the Parties agree
to amend the Plan as follows:
The
Merger will be completed in two steps. The first step on or about
February 21, 2008 by the issuance of 100,000 shares of preferred stock to the
Shareholders in the proportions set out on Exhibit A to the Plan that is
convertible upon completion of the second step of the Merger into 35,000,000
shares (73.50%) of the common stock to the in exchange for 100% of the equity
interests of TeleChem. The terms of the preferred stock will, be
substantially conform to the designations attached as Exhibit
A. After completion of the first step of the Merger, TeleChem will be
a wholly-owned subsidiary of Integrated Media and the present Shareholders will
own approximately 73.5% of the outstanding equity interest and voting rights of
the parent company, Integrated Media.
The
second step will be completed after: (i) reincorporation to Nevada and
governance by the Nevada Articles, (ii) completion of the reverse split of the
outstanding Integrated Media common stock, (iii) conversion of all outstanding
shares of convertible preferred stock, and (iv) conversion of all outstanding
notes, bonds and debentures.
Section
2.11 of the Plan is amended to include the transfer of all the interest of
Integrated Media in Bidchaser, Inc. to the same person and for the same
consideration as the transfer of Endavo.
Integrated
Media will adopt the assumed name ArrayIt Company upon completion of the first
step of the Merger.
All of
the remaining terms and conditions of the Plan shall be in full force and effect
as originally written.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
|
INTEGRATED
MEDIA HOLDINGS, INC.
|
TELECHEM
INTERNATIONAL, INC.
|
|
a
Delaware corporation
|
a
Delaware corporation
|
|
By:
William
L. Sklar, Chief Executive Officer
Date:
________________________
|
By:
Rene’
A. Schena, Chief Executive Officer
Date:
________________________
|
|
TCI
ACQUISITION CORP.
|
ENDAVO
MEDIA AND COMMUNICATIONS, INC.
|
|
a
Nevada corporation
|
a
Delaware corporation
|
|
By:
William
L. Sklar, Chief Executive Officer
Date:
________________________
|
By:______________________________________
Paul
D. Hamm, Chief Executive Officer
Date:
________________________
|
|
_____________________________________
Rene’
A. Schena, Individually
Date:
________________________
|
__________________________________________
Todd
J. Martinsky, Individually
Date:
________________________
|
EXHIBIT
A
INTEGRATED
MEDIA HOLDINGS, INC.
CERTIFICATE
OF DESIGNATIONS
OF
THE
SERIES C
CONVERTIBLE PREFERRED STOCK,
LIQUIDATION
PREFERENCE $.001 PER SHARE
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
INTEGRATED MEDIA HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Delaware (the
“Corporation”), does hereby certify that, pursuant to the authority conferred on
its board of directors (the “Board of Directors”) by its Certificate of
incorporation (the “Certificate of Incorporation”), as amended, and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors (or, as to certain matters allowed by law, a
duly authorized committee thereof) adopted the following resolution establishing
a series of 100,000 shares of Preferred Stock of the Corporation designated as
“Series C Preferred Stock.”
RESOLVED,
that pursuant to the authority conferred on the Board of Directors of this
Corporation (the “Corporation”) by the Certificate of Incorporation, a series of
Preferred Stock, $.001 par value, of the Corporation be and hereby is
established and created, and that the designation and number of shares thereof
and the voting and other powers, preferences and relative, participating,
optional or other rights of the shares of such Series C and the qualifications,
limitations and restrictions thereof are as follows:
Convertible Preferred
Stock
1. DESIGNATION. This
series of Preferred Stock shall be designated “Series C Convertible Preferred
Stock” (the “SERIES C PREFERRED STOCK”).
2. NUMBER OF SHARES AND PAR
VALUE. The number of shares constituting the Series C
Preferred Stock shall be equal to 100,000. Each share of the Series C
Preferred Stock shall have $.001 par value.
3. RELATIVE
SENIORITY. The Series C Preferred Stock shall, in respect of
the right to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Corporation, rank (a) pari passu
with the Common Stock (as defined below) of the Corporation and with any other
class or series of stock of the Corporation, the terms of which specifically
provide that such class or series shall rank pari passu with the Series C
Preferred Stock in respect of the right to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Corporation; and (b) junior to any other class or series of stock of the
Corporation, the terms of which specifically provide that such class or series
shall rank senior to the Series C Preferred Stock in respect of the right to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Corporation. The term “COMMON STOCK”
shall mean all shares now or hereafter authorized of any class of common stock
of the Corporation.
4. NO LIQUIDATION
PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to the holders of
shares of any series of Preferred Stock, having a priority on liquidation
superior to that of the Series C Preferred Stock, the holders of shares of
Series C Preferred Stock shall be entitled to participate with the Common Stock
in all of the remaining assets of the Corporation available for distribution to
its stockholders, ratably with the holders of Common Stock in proportion to the
number of shares of Common Stock held by them, assuming for each holder of
Series C Preferred Stock on the record date for such distribution that each
holder was the holder of record of the number (including any fraction) of shares
of Common Stock into which the shares of Series C Preferred Stock then held by
such holder are then convertible. A liquidation, dissolution, or
winding-up of the Corporation, as such terms are used in this Section 4, shall
not be deemed to be occasioned by or to include any merger of the Corporation
with or into one or more corporations or other entities, any acquisition or
exchange of the outstanding shares of one or more classes or series of the
Corporation, or any sale, lease, exchange, or other disposition of all or a part
of the assets of the Corporation.
5. VOTING
RIGHTS. Except as otherwise required by law, each share of
outstanding Series C Preferred Stock shall entitle the holder thereof to vote on
each matter submitted to a vote of the stockholders of the Corporation and to
have the number of votes equal to the number (including any fraction) of shares
of Common Stock into which such share of Series C Preferred Stock is then
convertible pursuant to the provisions hereof at the record date for the
determination of shareholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders becomes effective. Except as otherwise
required by law or by this Certificate, the holders of shares of Common Stock
and Series C Preferred Stock shall vote together and not as separate
classes.
6. DIVIDENDS AND
DISTRIBUTIONS. If any dividend or other distribution payable
in cash, securities or other property, including a dividend payable in shares of
Common Stock, is declared on the Common Stock, each holder of shares of Series C
Preferred Stock on the record date for such dividend or distribution shall be
entitled to receive on the date of payment or distribution of such dividend or
other distribution the same cash, securities or other property which such holder
would have received on such record date if such holder was the holder of record
of the number (including any fraction) of shares of Common Stock into which the
shares of Series C Preferred Stock then held by such holder are then
convertible. No dividend or other distribution shall be declared or
paid on the Common Stock unless an equivalent dividend or other distribution
that satisfies this Section 6 is declared or paid on the Series C Preferred
Stock.
7. CONVERSION. The
holders of the Series C Preferred Stock shall have conversion rights as
follows:
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(a)
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Optional
Conversion. The holder of each share of Series C
Preferred Stock shall have the right (the “CONVERSION RIGHT”), at such
holder’s option, to convert such share at any time, without cost, on the
terms of this Section 7, into the number of fully paid and non-assessable
shares of Common Stock as specified by the Conversion Ratio that is in
effect at the time of conversion; provided that, and only to the extent
that, the Corporation has a sufficient number of shares of authorized but
unissued and unreserved Common Stock available to issue upon
conversion. The initial “CONVERSION RATIO” for the Series C
Preferred Stock is 350:1. The Conversion Ratio shall be subject
to adjustment from time to time as provided in this Section
7.
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(b)
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Mandatory
Conversion. Upon the occurrence of an Increase in
Authorized Common Stock, each outstanding share of Series C Preferred
Stock shall automatically be converted, without cost, on the terms set
forth in this Section into the number of fully paid and non-assessable
shares of Common Stock as specified by the Conversion Ratio that is in
effect at the time of conversion. An “INCREASE IN AUTHORIZED
COMMON STOCK” shall be deemed to occur upon either (i) effectiveness of a
filing in the office of the Secretary of State of Delaware, or such other
state in which the Corporation is legally domiciled, of an amendment to
(or amendment and restatement of) the Articles of Incorporation or other
charter document of the Corporation that increases the number of
authorized shares of Common Stock to a sufficient number (after taking
into account all shares reserved for issuance by the Board of Directors)
so as to enable the conversion of all outstanding shares of Series C
Preferred Stock into such number of fully paid and non-assessable shares
of Common Stock as specified by the Conversion Ratio then in effect, or
(ii) the effective date of any other corporate action that enables the
conversion of all outstanding shares of Series C Preferred Stock into such
number of fully paid and non-assessable shares of Common Stock as
specified by the Conversion Ratio then in
effect.
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(c)
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Mechanics of
Conversion.
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(i)
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Optional
Conversion. A holder of any share of Series C Preferred
Stock may exercise the Conversion Right of such share by surrendering the
certificate therefor, duly endorsed, at the office of the Corporation or
of any transfer agent for the Series C Preferred Stock, together with a
written notice to the Corporation which shall state: (A) that such holder
elects to convert the same; and (B) the number of shares of Series C
Preferred Stock being converted. Thereupon the Corporation
shall promptly issue and deliver to the holder of such shares a
certificate or certificates for the number of whole shares of Common Stock
to which such holder shall be entitled. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
fair market value (as determined in good faith by the Board of Directors
of the Corporation) of the Common Stock. If the certificate
evidencing the Series C Preferred Stock being converted shall also
evidence shares of Series C Preferred Stock not being converted, then the
Corporation shall also deliver to the holder of such certificate a new
stock certificate evidencing the Series C Preferred Stock not
converted. The conversion of any shares of Series C Preferred
Stock shall be deemed to have been made immediately prior to the close of
business on the date that the shares of Series C Preferred Stock to be
converted are surrendered to the Corporation, and the person or persons
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. Any
dividends or distributions declared but unpaid at the time of conversion
with respect to the Series C Preferred Stock so converted, including any
dividends declared on the Common Stock to which the Series C Preferred
Stock is entitled pursuant to Section 6 above, shall be paid to the holder
of Common Stock issued upon conversion of the Series C Preferred Stock
upon the payment date therefore.
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The
Corporation shall give written notice to each holder of a share of Series
C Preferred Stock promptly upon the liquidation, dissolution or winding up
of the Corporation, and not more than fifty (50) nor less than twenty (20)
days before the anticipated date of consummation of any acquisition of the
Corporation or any sale of all or substantially all of the assets of the
Corporation and no such acquisition of the Corporation or sale of assets
shall be effective until such notice shall have been
given.
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(ii)
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Mandatory
Conversion. The Corporation shall give written notice to
each holder of a share of Series C Preferred Stock within ten (10) days
after the effectiveness of an Increase in Authorized Common
Stock. Following the conversion of such shares, each holder of
shares so converted may surrender the certificate therefor at the office
of the Corporation or any transfer agent for the Series C Preferred
Stock. Upon such surrender, the Corporation shall issue and
deliver to each holder a certificate or certificates for the number of
whole shares of Common Stock to which such holder is
entitled. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then fair market value (as determined in good
faith by the Board of Directors of the Corporation) of the Common
Stock.
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The
conversion of shares of Series C Preferred Stock shall be effective
simultaneously with the effectiveness of an Increase in Authorized Common
Stock, whether or not the certificates representing such shares of Series
C Preferred Stock shall have been surrendered or new certificates
representing the shares of Common Stock into which such shares have been
converted shall have been issued and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date. Any dividends or distributions
declared but unpaid at the time of a mandatory conversion with respect to
the Series C Preferred Stock so converted, including any dividends
declared on the Common Stock to which the Series C Preferred Stock is
entitled pursuant to Section 6 above, shall be paid on the payment date
therefore.
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(d)
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Adjustment of Conversion
Ratio. The Conversion Ratio for each share of Series C
Preferred Stock and the kind of securities issuable upon the conversion of
any share of Series C Preferred Stock shall be adjusted from time to time
as follows:
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(i) Subdivision or Combination
of Shares. If the Corporation at any time effects an increase
in the number of outstanding shares of Common Stock by subdivision, the
Conversion Ratio shall be increased in the same proportions as the Common Stock
is subdivided, in each case effective automatically upon, and simultaneously
with, the effectiveness of the subdivision which gives rise to the
adjustment. If the Corporation at any time effects a decrease in the
number of outstanding shares of Common Stock by combination the Conversion shall
remain the same and unchanged.
(ii) Reclassification,
Consolidation or Merger. If at any time, as a result of (A) a
capital reorganization or reclassification (other than a subdivision or
combination which gives rise to an adjustment of the Conversion Ratio pursuant
to Section 7(d)(i)); or (B) a merger or consolidation of the Corporation with
another corporation (whether or not the Corporation is the surviving
corporation), the Common Stock issuable upon the conversion of the Series C
Preferred Stock shall be changed into or exchanged for the same or a different
number of shares of any class or classes of stock of the Corporation or any
other corporation, or other securities convertible into such shares, then, as a
part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Series C Preferred
Stock (or of any securities into which the Series C Preferred Stock is changed
or for which the Series C Preferred Stock is exchanged), so that: (x) the
holders of Series C Preferred Stock or of such substitute securities shall
thereafter be entitled to receive, upon conversion of the Series C Preferred
Stock or of such substitute securities, the kind and amount of shares of stock,
other securities, money and property which such holders would have received at
the time of such capital reorganization, reclassification, merger, or
consolidation, if such holders had converted their Series C Preferred Stock
immediately prior to such capital reorganization, reclassification, merger, or
consolidation, and (y) the Series C Preferred Stock or such substitute
securities shall thereafter be adjusted on terms as nearly equivalent as may be
practicable to the adjustments theretofore provided in this Section
7(d). No consolidation or merger in which the Corporation is not the
surviving corporation shall be consummated unless the surviving corporation
shall agree, in writing, to the provisions of this Section
7(d)(ii). The provisions of this Section 7(d)(ii) shall similarly
apply to successive capital reorganizations, reclassifications, mergers, and
consolidations.
(iii) Other Action Affecting
Common Stock. If at any time the Corporation takes any action
affecting its Common Stock which, in the opinion of the Board of Directors of
the Corporation, would have an adverse effect upon the Conversion Rights of the
Series C Preferred Stock and the foregoing conversion ratio adjustment
provisions are not strictly applicable but the failure to make any adjustment
would adversely affect the Conversion Rights, then the Conversion Ratio and the
kind of securities issuable upon the conversion of Series C Preferred Stock
shall be adjusted to preserve, without dilution, the Conversion Rights in such
manner and at such time as the Board of Directors of the Corporation may in good
faith determine to be equitable in the circumstances.
(iv) Notice of
Adjustments. Whenever the Conversion Ratio or the kind of
securities issuable upon the conversion of any one of or all of the Series C
Preferred Stock shall be adjusted pursuant to Sections 7(d)(i) - (iii) above,
the Corporation shall make a certificate signed by its Chief Financial Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors of the Corporation made any determination hereunder), and the
Conversion Ratio and the kind of securities issuable upon the conversion of the
Series C Preferred Stock after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to
each holder of Series C Preferred Stock promptly after each
adjustment.
(e) Full
Consideration. All shares of Common Stock which shall be
issued upon the conversion of any Series C Preferred Stock (which is itself
fully paid and non-assessable) will, upon issuance, be fully paid and
non-assessable. The Corporation will pay such amounts and will take
such other action as may be necessary from time to time so that all shares of
Common Stock which shall be issued upon the conversion of any Series C Preferred
Stock will, upon issuance and without cost to the recipient, be free from all
pre-emptive rights, taxes, liens and charges with respect to the issue
thereof.
(f) No Impairment. The
Corporation will not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 7 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Series C Preferred Stock against
impairment.
(g) Cancellation of Series C Preferred
Stock. No share of Series C Preferred Stock acquired by the
Corporation upon conversion, redemption or purchase shall be reissued and all
such shares shall be canceled, retired and returned to the status of authorized
and unissued shares of undesignated preferred stock. The Corporation
may take such appropriate corporate action to reduce the authorized number of
Series C Preferred Stock accordingly.
8. PROTECTIVE
PROVISIONS. In addition to any other rights provided by law,
so long as at least one share of Series C Preferred Stock is outstanding, the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of the outstanding shares of
the Series C Preferred Stock voting together as a single class:
(a) amend
or repeal any provision of the Corporation’s Articles of Incorporation, Bylaws
or this Certificate of Designation if such action would materially and adversely
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series C Preferred
Stock;
(b)
increase or decrease (other than by conversion) the total number of authorized
shares of Series C Preferred Stock;
(c)
create or issue any series or class, reclassify any authorized capital stock of
the Corporation into stock of any series or class, increase the authorized or
issued amount of any class or series of stock, or authorize, create, issue or
reclassify any obligation or security convertible or exchangeable into or
evidencing a right to purchase capital stock of any class or series, that ranks
prior to the Series C Preferred Stock as to dividends or rights upon
liquidation, dissolution or winding up;
(d) issue
any Common Stock after the date on which Series C Preferred Stock has been last
issued and sold, whether or not subsequently reacquired or retired by the
Corporation, for a consideration per share less than fair market value of the
Common Stock (as determined in good faith by the Board of Directors of the
Corporation) at such issuance or deemed issuance other than: (1) shares of
Common Stock issued in transactions giving rise to adjustments under Sections
7(d)(i) or (ii) above, (2) shares of Common Stock issued upon conversion of
shares of Series C Preferred Stock, or (3) shares issued upon the conversion of
Convertible Securities (as defined below) if the issuance of such Convertible
Securities did not violate Section 8(e) below;
(e) issue
any Convertible Securities with respect to which the Effective Price is less
than the fair market value of the Common Stock (as determined in good faith by
the Board of Directors of the Corporation), at such issuance or deemed
issuance. “CONVERTIBLE SECURITIES” means all rights or options for
the purchase of, or stock or other securities convertible into, Common Stock
(other than Common Stock issued for the purposes set forth in Sections 8(d)(1)
or (2) above) or other Convertible Securities, whenever and each time
issued. The “EFFECTIVE PRICE” with respect to any Convertible
Securities means the result of dividing: (1) the sum of (x) the total
consideration, if any, received by the Corporation for the issuance of such
Convertible Securities, plus (y) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of such Convertible Securities
(assuming that the full amount of securities issuable upon exercise or
conversion are issued), plus (z) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of any Convertible Securities
issuable upon exercise or conversion of such Convertible Securities, by: (2) the
maximum number of Common Stock (other than Common Stock issued for the purposes
set forth in Sections 8(d)(1) or (2) above) issuable upon exercise or conversion
of such Convertible Securities or of any Convertible Securities issuable upon
exercise or conversion of such Convertible Securities; or
(f) sell,
convey, or otherwise dispose of or encumber all or substantially all of its
property or business or merge or consolidate with any other corporation (other
than a wholly-owned subsidiary corporation) or effect any transaction or series
of related transactions in which more than fifty percent (50%) of the voting
power of the Corporation is disposed of.
9. SEVERABILITY OF
PROVISIONS. If any voting powers, preferences and relative,
participating, optional and other special rights of the Series C Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations, and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed
herein.
IN WITNESS WHEREOF, Integrated Media
Holdings, Inc. has caused this certificate to be signed by its President, and
its corporate seal to be hereunto affixed and attested by its Secretary, as of
the ____ day of February, 2008.
INTEGRATED
MEDIA HOLDINGS, INC.
By: 
William L. Sklar, President and Secretary
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Exhibit
1.03
Certificate of
Designation of the Series C Convertible Preferred Stock
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INTEGRATED
MEDIA HOLDINGS, INC.
CERTIFICATE
OF DESIGNATIONS
OF
THE
SERIES C CONVERTIBLE PREFERRED
STOCK,
LIQUIDATION
PREFERENCE $.001 PER SHARE
Pursuant
to Section 151 of the
General
Corporation Law of the State of Delaware
INTEGRATED MEDIA HOLDINGS, INC., a
corporation organized and existing under the laws of the State of Delaware (the
“Corporation”), does hereby certify that, pursuant to the authority conferred on
its board of directors (the “Board of Directors”) by its Certificate of
incorporation (the “Certificate of Incorporation”), as amended, and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors (or, as to certain matters allowed by law, a
duly authorized committee thereof) adopted the following resolution establishing
a series of 100,000 shares of Preferred Stock of the Corporation designated as
“Series C Preferred Stock.”
RESOLVED,
that pursuant to the authority conferred on the Board of Directors of this
Corporation (the “Corporation”) by the Certificate of Incorporation, a series of
Preferred Stock, $.001 par value, of the Corporation be and hereby is
established and created, and that the designation and number of shares thereof
and the voting and other powers, preferences and relative, participating,
optional or other rights of the shares of such Series C and the qualifications,
limitations and restrictions thereof are as follows:
Convertible Preferred
Stock
1. DESIGNATION. This
series of Preferred Stock shall be designated “Series C Convertible Preferred
Stock” (the “SERIES C PREFERRED STOCK”).
2. NUMBER OF SHARES AND PAR
VALUE. The number of shares constituting the Series C
Preferred Stock shall be equal to 100,000. Each share of the Series C
Preferred Stock shall have $.001 par value.
3. RELATIVE
SENIORITY. The Series C Preferred Stock shall, in respect of
the right to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Corporation, rank (a) pari passu
with the Common Stock (as defined below) of the Corporation and with any other
class or series of stock of the Corporation, the terms of which specifically
provide that such class or series shall rank pari passu with the Series C
Preferred Stock in respect of the right to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Corporation; and (b) junior to any other class or series of stock of the
Corporation, the terms of which specifically provide that such class or series
shall rank senior to the Series C Preferred Stock in respect of the right to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Corporation. The term “COMMON STOCK”
shall mean all shares now or hereafter authorized of any class of common stock
of the Corporation.
4. NO LIQUIDATION
PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to the holders of
shares of any series of Preferred Stock, having a priority on liquidation
superior to that of the Series C Preferred Stock, the holders of shares of
Series C Preferred Stock shall be entitled to participate with the Common Stock
in all of the remaining assets of the Corporation available for distribution to
its stockholders, ratably with the holders of Common Stock in proportion to the
number of shares of Common Stock held by them, assuming for each holder of
Series C Preferred Stock on the record date for such distribution that each
holder was the holder of record of the number (including any fraction) of shares
of Common Stock into which the shares of Series C Preferred Stock then held by
such holder are then convertible. A liquidation, dissolution, or
winding-up of the Corporation, as such terms are used in this Section 4, shall
not be deemed to be occasioned by or to include any merger of the Corporation
with or into one or more corporations or other entities, any acquisition or
exchange of the outstanding shares of one or more classes or series of the
Corporation, or any sale, lease, exchange, or other disposition of all or a part
of the assets of the Corporation.
5. VOTING
RIGHTS. Except as otherwise required by law, each share of
outstanding Series C Preferred Stock shall entitle the holder thereof to vote on
each matter submitted to a vote of the stockholders of the Corporation and to
have the number of votes equal to the number (including any fraction) of shares
of Common Stock into which such share of Series C Preferred Stock is then
convertible pursuant to the provisions hereof at the record date for the
determination of shareholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders becomes effective. Except as otherwise
required by law or by this Certificate, the holders of shares of Common Stock
and Series C Preferred Stock shall vote together and not as separate
classes.
6. DIVIDENDS AND
DISTRIBUTIONS. If any dividend or other distribution payable
in cash, securities or other property, including a dividend payable in shares of
Common Stock, is declared on the Common Stock, each holder of shares of Series C
Preferred Stock on the record date for such dividend or distribution shall be
entitled to receive on the date of payment or distribution of such dividend or
other distribution the same cash, securities or other property which such holder
would have received on such record date if such holder was the holder of record
of the number (including any fraction) of shares of Common Stock into which the
shares of Series C Preferred Stock then held by such holder are then
convertible. No dividend or other distribution shall be declared or
paid on the Common Stock unless an equivalent dividend or other distribution
that satisfies this Section 6 is declared or paid on the Series C Preferred
Stock.
7. CONVERSION. The
holders of the Series C Preferred Stock shall have conversion rights as
follows:
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(a)
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Optional
Conversion. The holder of each share of Series C
Preferred Stock shall have the right (the “CONVERSION RIGHT”), at such
holder’s option, to convert such share at any time, without cost, on the
terms of this Section 7, into the number of fully paid and non-assessable
shares of Common Stock as specified by the Conversion Ratio that is in
effect at the time of conversion; provided that, and only to the extent
that, the Corporation has a sufficient number of shares of authorized but
unissued and unreserved Common Stock available to issue upon
conversion. The initial “CONVERSION RATIO” for the Series C
Preferred Stock is 350:1. The Conversion Ratio shall be subject
to adjustment from time to time as provided in this Section
7.
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(b)
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Mandatory
Conversion. Upon the occurrence of an Increase in
Authorized Common Stock, each outstanding share of Series C Preferred
Stock shall automatically be converted, without cost, on the terms set
forth in this Section into the number of fully paid and non-assessable
shares of Common Stock as specified by the Conversion Ratio that is in
effect at the time of conversion. An “INCREASE IN AUTHORIZED
COMMON STOCK” shall be deemed to occur upon either (i) effectiveness of a
filing in the office of the Secretary of State of Delaware, or such other
state in which the Corporation is legally domiciled, of an amendment to
(or amendment and restatement of) the Articles of Incorporation or other
charter document of the Corporation that increases the number of
authorized shares of Common Stock to a sufficient number (after taking
into account all shares reserved for issuance by the Board of Directors)
so as to enable the conversion of all outstanding shares of Series C
Preferred Stock into such number of fully paid and non-assessable shares
of Common Stock as specified by the Conversion Ratio then in effect, or
(ii) the effective date of any other corporate action that enables the
conversion of all outstanding shares of Series C Preferred Stock into such
number of fully paid and non-assessable shares of Common Stock as
specified by the Conversion Ratio then in
effect.
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(c)
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Mechanics of
Conversion.
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(i)
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Optional
Conversion. A holder of any share of Series C Preferred
Stock may exercise the Conversion Right of such share by surrendering the
certificate therefor, duly endorsed, at the office of the Corporation or
of any transfer agent for the Series C Preferred Stock, together with a
written notice to the Corporation which shall state: (A) that such holder
elects to convert the same; and (B) the number of shares of Series C
Preferred Stock being converted. Thereupon the Corporation
shall promptly issue and deliver to the holder of such shares a
certificate or certificates for the number of whole shares of Common Stock
to which such holder shall be entitled. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
fair market value (as determined in good faith by the Board of Directors
of the Corporation) of the Common Stock. If the certificate
evidencing the Series C Preferred Stock being converted shall also
evidence shares of Series C Preferred Stock not being converted, then the
Corporation shall also deliver to the holder of such certificate a new
stock certificate evidencing the Series C Preferred Stock not
converted. The conversion of any shares of Series C Preferred
Stock shall be deemed to have been made immediately prior to the close of
business on the date that the shares of Series C Preferred Stock to be
converted are surrendered to the Corporation, and the person or persons
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date. Any
dividends or distributions declared but unpaid at the time of conversion
with respect to the Series C Preferred Stock so converted, including any
dividends declared on the Common Stock to which the Series C Preferred
Stock is entitled pursuant to Section 6 above, shall be paid to the holder
of Common Stock issued upon conversion of the Series C Preferred Stock
upon the payment date therefore.
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The
Corporation shall give written notice to each holder of a share of Series
C Preferred Stock promptly upon the liquidation, dissolution or winding up
of the Corporation, and not more than fifty (50) nor less than twenty (20)
days before the anticipated date of consummation of any acquisition of the
Corporation or any sale of all or substantially all of the assets of the
Corporation and no such acquisition of the Corporation or sale of assets
shall be effective until such notice shall have been
given.
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(ii)
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Mandatory
Conversion. The Corporation shall give written notice to
each holder of a share of Series C Preferred Stock within ten (10) days
after the effectiveness of an Increase in Authorized Common
Stock. Following the conversion of such shares, each holder of
shares so converted may surrender the certificate therefor at the office
of the Corporation or any transfer agent for the Series C Preferred
Stock. Upon such surrender, the Corporation shall issue and
deliver to each holder a certificate or certificates for the number of
whole shares of Common Stock to which such holder is
entitled. In lieu of any fractional shares to which the holder
would otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then fair market value (as determined in good
faith by the Board of Directors of the Corporation) of the Common
Stock.
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The
conversion of shares of Series C Preferred Stock shall be effective
simultaneously with the effectiveness of an Increase in Authorized Common
Stock, whether or not the certificates representing such shares of Series
C Preferred Stock shall have been surrendered or new certificates
representing the shares of Common Stock into which such shares have been
converted shall have been issued and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date. Any dividends or distributions
declared but unpaid at the time of a mandatory conversion with respect to
the Series C Preferred Stock so converted, including any dividends
declared on the Common Stock to which the Series C Preferred Stock is
entitled pursuant to Section 6 above, shall be paid on the payment date
therefore.
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(d) Adjustment of Conversion
Ratio. The Conversion Ratio for each share of Series C
Preferred Stock and the kind of securities issuable upon the conversion of any
share of Series C Preferred Stock shall be adjusted from time to time as
follows:
(i) Subdivision or Combination
of Shares. If the Corporation at any time effects an increase
in the number of outstanding shares of Common Stock by subdivision, the
Conversion Ratio shall be increased in the same proportions as the Common Stock
is subdivided, in each case effective automatically upon, and simultaneously
with, the effectiveness of the subdivision which gives rise to the
adjustment. If the Corporation at any time effects a decrease in the
number of outstanding shares of Common Stock by combination the Conversion shall
remain the same and unchanged.
(ii) Reclassification,
Consolidation or Merger. If at any time, as a result of (A) a
capital reorganization or reclassification (other than a subdivision or
combination which gives rise to an adjustment of the Conversion Ratio pursuant
to Section 7(d)(i)); or (B) a merger or consolidation of the Corporation with
another corporation (whether or not the Corporation is the surviving
corporation), the Common Stock issuable upon the conversion of the Series C
Preferred Stock shall be changed into or exchanged for the same or a different
number of shares of any class or classes of stock of the Corporation or any
other corporation, or other securities convertible into such shares, then, as a
part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Series C Preferred
Stock (or of any securities into which the Series C Preferred Stock is changed
or for which the Series C Preferred Stock is exchanged), so that: (x) the
holders of Series C Preferred Stock or of such substitute securities shall
thereafter be entitled to receive, upon conversion of the Series C Preferred
Stock or of such substitute securities, the kind and amount of shares of stock,
other securities, money and property which such holders would have received at
the time of such capital reorganization, reclassification, merger, or
consolidation, if such holders had converted their Series C Preferred Stock
immediately prior to such capital reorganization, reclassification, merger, or
consolidation, and (y) the Series C Preferred Stock or such substitute
securities shall thereafter be adjusted on terms as nearly equivalent as may be
practicable to the adjustments theretofore provided in this Section
7(d). No consolidation or merger in which the Corporation is not the
surviving corporation shall be consummated unless the surviving corporation
shall agree, in writing, to the provisions of this Section
7(d)(ii). The provisions of this Section 7(d)(ii) shall similarly
apply to successive capital reorganizations, reclassifications, mergers, and
consolidations.
(iii) Other Action Affecting
Common Stock. If at any time the Corporation takes any action
affecting its Common Stock which, in the opinion of the Board of Directors of
the Corporation, would have an adverse effect upon the Conversion Rights of the
Series C Preferred Stock and the foregoing conversion ratio adjustment
provisions are not strictly applicable but the failure to make any adjustment
would adversely affect the Conversion Rights, then the Conversion Ratio and the
kind of securities issuable upon the conversion of Series C Preferred Stock
shall be adjusted to preserve, without dilution, the Conversion Rights in such
manner and at such time as the Board of Directors of the Corporation may in good
faith determine to be equitable in the circumstances.
(iv) Notice of
Adjustments. Whenever the Conversion Ratio or the kind of
securities issuable upon the conversion of any one of or all of the Series C
Preferred Stock shall be adjusted pursuant to Sections 7(d)(i) - (iii) above,
the Corporation shall make a certificate signed by its Chief Financial Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors of the Corporation made any determination hereunder), and the
Conversion Ratio and the kind of securities issuable upon the conversion of the
Series C Preferred Stock after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to
each holder of Series C Preferred Stock promptly after each
adjustment.
(e) Full
Consideration. All shares of Common Stock which shall be
issued upon the conversion of any Series C Preferred Stock (which is itself
fully paid and non-assessable) will, upon issuance, be fully paid and
non-assessable. The Corporation will pay such amounts and will take
such other action as may be necessary from time to time so that all shares of
Common Stock which shall be issued upon the conversion of any Series C Preferred
Stock will, upon issuance and without cost to the recipient, be free from all
pre-emptive rights, taxes, liens and charges with respect to the issue
thereof.
(f) No Impairment. The
Corporation will not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 7 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Series C Preferred Stock against
impairment.
(g) Cancellation of Series C Preferred
Stock. No share of Series C Preferred Stock acquired by the
Corporation upon conversion, redemption or purchase shall be reissued and all
such shares shall be canceled, retired and returned to the status of authorized
and unissued shares of undesignated preferred stock. The Corporation
may take such appropriate corporate action to reduce the authorized number of
Series C Preferred Stock accordingly.
8. PROTECTIVE
PROVISIONS. In addition to any other rights provided by law,
so long as at least one share of Series C Preferred Stock is outstanding, the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of the outstanding shares of
the Series C Preferred Stock voting together as a single class:
(a) amend
or repeal any provision of the Corporation’s Articles of Incorporation, Bylaws
or this Certificate of Designation if such action would materially and adversely
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series C Preferred
Stock;
(b)
increase or decrease (other than by conversion) the total number of authorized
shares of Series C Preferred Stock;
(c)
create or issue any series or class, reclassify any authorized capital stock of
the Corporation into stock of any series or class, increase the authorized or
issued amount of any class or series of stock, or authorize, create, issue or
reclassify any obligation or security convertible or exchangeable into or
evidencing a right to purchase capital stock of any class or series, that ranks
prior to the Series C Preferred Stock as to dividends or rights upon
liquidation, dissolution or winding up;
(d) issue
any Common Stock after the date on which Series C Preferred Stock has been last
issued and sold, whether or not subsequently reacquired or retired by the
Corporation, for a consideration per share less than fair market value of the
Common Stock (as determined in good faith by the Board of Directors of the
Corporation) at such issuance or deemed issuance other than: (1) shares of
Common Stock issued in transactions giving rise to adjustments under Sections
7(d)(i) or (ii) above, (2) shares of Common Stock issued upon conversion of
shares of Series C Preferred Stock, or (3) shares issued upon the conversion of
Convertible Securities (as defined below) if the issuance of such Convertible
Securities did not violate Section 8(e) below;
(e) issue
any Convertible Securities with respect to which the Effective Price is less
than the fair market value of the Common Stock (as determined in good faith by
the Board of Directors of the Corporation), at such issuance or deemed
issuance. “CONVERTIBLE SECURITIES” means all rights or options for
the purchase of, or stock or other securities convertible into, Common Stock
(other than Common Stock issued for the purposes set forth in Sections 8(d)(1)
or (2) above) or other Convertible Securities, whenever and each time
issued. The “EFFECTIVE PRICE” with respect to any Convertible
Securities means the result of dividing: (1) the sum of (x) the total
consideration, if any, received by the Corporation for the issuance of such
Convertible Securities, plus (y) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of such Convertible Securities
(assuming that the full amount of securities issuable upon exercise or
conversion are issued), plus (z) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of any Convertible Securities
issuable upon exercise or conversion of such Convertible Securities, by: (2) the
maximum number of Common Stock (other than Common Stock issued for the purposes
set forth in Sections 8(d)(1) or (2) above) issuable upon exercise or conversion
of such Convertible Securities or of any Convertible Securities issuable upon
exercise or conversion of such Convertible Securities; or
(f) sell,
convey, or otherwise dispose of or encumber all or substantially all of its
property or business or merge or consolidate with any other corporation (other
than a wholly-owned subsidiary corporation) or effect any transaction or series
of related transactions in which more than fifty percent (50%) of the voting
power of the Corporation is disposed of.
9. SEVERABILITY OF
PROVISIONS. If any voting powers, preferences and relative,
participating, optional and other special rights of the Series C Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations, and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed
herein.
IN WITNESS WHEREOF, Integrated Media
Holdings, Inc. has caused this certificate to be signed by its President, and
its corporate seal to be hereunto affixed and attested by its Secretary, as of
the 19th day of
February, 2008.
INTEGRATED
MEDIA HOLDINGS, INC.
By:
William L. Sklar, President and Secretary
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Exhibit 1.04
Certificate
of Correction for the Certificate of Designation of the Series C Convertible
Preferred Stock
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STATE
OF DELAWARE
CERTIFICATE
OF CORRECTION
Integrated
Media Holdings, Inc. (Entity 3021813), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware.
DOES HEREBY
CERTIFY:
1. The name
of the corporation is
Integrated Media Holdings, Inc. (Entity 3021813).
2. That a
Certificate
of Designation of the Series C Convertible Preferred Stock was filed by
the Secretary of State of Delaware on February
19, 2008 and that said Certificate requires correction as permitted by
Section 103 of the General Corporation Law of the State of
Delaware.
3. The
inaccuracy or defect of said Certificate is: The
number of shares constituting the Series C Preferred shall be equal to 103,143,
not 100,000.
4. Correction
of inaccuracy or defect – This inaccuracy shall be repaired by inserting
“103,143” in place of “100,000” where it is stated in paragraph one line six and
again in section 2 of Convertible Preferred Stock.
IN WITNESS WHEREOF, said
corporation has caused this Certificate of Correction to be effective the
19th
day of February, A.D. 2008.
By:
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William
L. Sklar, President and CEO
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In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
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INTEGRATED
MEDIA HOLDINGS, INC.
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Dated:
October 3, 2008
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By:
/s/ RENE’ A. SCHENA
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Rene’
A. Schena, Chairman , Director, CEO &
CFO
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In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
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INTEGRATED
MEDIA HOLDINGS, INC.
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Dated:
October 3, 2008
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By:
/s/RENE’ A. SCHENA
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Rene’
A. Schena, Chairman , Director, CEO & CFO
(Principal
Executive Officer and acting Principal Financial and Accounting
Officer)
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Dated: October
3, 2008
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By:
/s/ TODD J. MARTINSKY
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Todd
J. Martinsky, Director, Vice President &
COO
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