AGREEMENT AND PLAN OF REORGANIZATION
by and among
United Management, Inc.
a Nevada corporation
and
RRUN Ventures Inc.
a Nevada corporation
Effective as of December 18, 2000
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made
and entered into this 18th day of December, 2000, by and between United
Management, Inc., a Nevada corporation ("UM"), and RRUN Ventures Inc., a Nevada
corporation, ("RRUN").
Premises
A. This Agreement provides for the reorganization of RRUN with and into
UM, with the surviving entity adopting the name RRUN Ventures Inc., and in
connection therewith, the exchange of the outstanding common stock of RRUN for
shares of common voting stock of UM, all for the purpose of effecting a tax-free
reorganization pursuant to sections 354 and 368(a) of the Internal Revenue Code
of 1986, as amended.
B. The boards of directors of UM and RRUN have determined, subject to
the terms and conditions set forth in this Agreement, that the exchange
contemplated hereby, as a result of which UM and RRUN will become one entity, is
desirable and in the best interests of their stockholders. This Agreement is
being entered into for the purpose of setting forth the terms and conditions of
the proposed exchange.
Agreement
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF RRUN
As an inducement to and to obtain the reliance of UM, RRUN represents
and warrants as follows:
Section 1.1 Organization. RRUN is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada and has the
corporate power and is
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duly authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
corporation in the jurisdiction in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification. Included in the RRUN Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, bylaws and
amendments thereto of RRUN as in effect on the date hereof. The execution and
delivery of this Agreement do not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not
violate any provision of RRUN's articles of incorporation or bylaws. RRUN has
full power, authority and legal right and has taken all action required by law,
its articles of incorporation, its bylaws or otherwise to authorize the
execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized capitalization of RRUN
consists of 25,000,000 common shares, par value $0.001 per share. All issued and
outstanding shares are legally issued, fully paid and nonassessable and are not
issued in violation of the preemptive or other rights of any person. RRUN has no
other securities, warrants or options authorized or issued other than as set
forth in the RRUN Schedules.
Section 1.3 Subsidiaries and Predecessor Corporations. Except as
otherwise set forth in the RRUN Schedules or as previously provided to UM, RRUN
does not have any other subsidiaries and does not own, beneficially or of
record, any shares of any other corporation.
Section 1.4 Financial Statements. Included in the RRUN Schedules is
RRUN's audited financial statements (including any predecessor companies)
including a balance sheet, statement of operations, shareholder equity and cash
flows and notes thereto, dated as of November 15, 2000. Relevant thereto:
(a) the RRUN balance sheet presents fairly as of its date the
financial condition of RRUN and RRUN does not have, as of the date of
such balance sheet, except as noted and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected in a balance sheet or the notes
thereto and all material assets reflected therein are properly reported
and present
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fairly the value of the assets of RRUN, in accordance with generally
accepted accounting principles;
(b) RRUN has no material liabilities with respect to the
payment of any provincial, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties), except for taxes
accrued but not yet due and payable;
(c) RRUN has filed all, state, federal and local income tax
returns required to be filed by it from inception to the date hereof,
if any;
(d) the books and records, financial and others, of RRUN are
in all material respects complete and correct and have been maintained
in accordance with good business accounting practices; and
(e) except as and to the extent disclosed in the most recent
RRUN balance sheet and the RRUN Schedules, RRUN has no material
contingent liabilities, direct or indirect, matured or unmatured.
Section 1.5 Information. The information concerning RRUN set forth in
this Agreement and in the RRUN Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 1.6 Options and Warrants. Except as set forth in the RRUN
Schedules, there are no existing options, warrants, calls or commitments of any
character to which RRUN is a party and by which it is bound.
Section 1.7 Absence of Certain Changes or Events. Except as set forth
in this Agreement, the RRUN Schedules, or as otherwise disclosed to UM:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of RRUN; or (ii)
any damage, destruction or loss to RRUN (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets or condition of RRUN;
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(b) RRUN has not: (i) amended its articles of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind
whatsoever to stockholders or purchased or redeemed or agreed to
purchase or redeem any of its capital stock; (iii) waived any rights of
value which in the aggregate are extraordinary or material considering
the business of RRUN; (iv) made any material change in its method of
management, operation or accounting; (v) entered into any other
material transaction; (vi) made any accrual or arrangement for or
payment of bonuses or special compensation of any kind or any severance
or termination pay to any present or former officer or employee; (vii)
increased the rate of compensation payable or to become payable by it
to any of its officers or directors or any of its employees whose
monthly compensation exceeds $5,000; or (viii) made any increase in any
profit sharing, bonus, deferred compensation, insurance, pension,
retirement or other employee benefit plan, payment or arrangement made
to, for, or with its officers, directors or employees;
(c) RRUN has not: (i) granted or agreed to grant any options,
warrants or other rights for its stocks, bonds or other corporate
securities calling for the issuance thereof; (ii) borrowed or agreed to
borrow any funds or incurred or become subject to, any material
obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent RRUN balance sheet
and current liabilities incurred since that date in the ordinary course
of business; (iv) sold or transferred, or agreed to sell or transfer,
any of its assets, properties or rights (except assets, properties or
rights not used or useful in its business which, in the aggregate have
a value of less than $10,000); (v) made or permitted any amendment or
termination of any contract, agreement or license to which it is a
party if such amendment or termination is material, considering the
business of RRUN; or (vi) issued, delivered or agreed to issue or
deliver any stock, bonds or other corporate securities, including
debentures (whether authorized and unissued or held as treasury stock);
and
(d) to the best knowledge of RRUN, it has not become subject
to any law or regulation which materially and adversely affects, or in
the future may adversely affect, the business, operations, properties,
assets or condition of RRUN.
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Section 1.8 Title and Related Matters. RRUN has good and marketable
title to and is the sole and exclusive owner of all of its properties,
inventory, interests in properties and assets, real and personal (collectively,
the "Assets") which are reflected in the RRUN audited balance sheet and the RRUN
Schedules or acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such date in the
ordinary course of business), free and clear of all liens, pledges, charges or
encumbrances except: (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not, materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the RRUN Schedules.
Except as set forth in the RRUN Schedules, RRUN owns free and clear of any
liens, claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever any and all procedures, techniques,
marketing plans, business plans, methods of management or other information
utilized in connection with RRUN's business. Except as set forth in the RRUN
Schedules, no third party has any right to, and RRUN has not received any notice
of infringement of or conflict with asserted rights of others with respect to
any product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse effect on the business, operations, financial
conditions or income of RRUN or any material portion of its properties, assets
or rights.
Section 1.9 Litigation and Proceedings. To the best of RRUN's knowledge
and belief, there are no actions, suits, proceedings or investigations pending
or threatened by or against RRUN or affecting RRUN or its properties, at law or
in equity, before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would have a
material adverse effect on the business, operations, financial condition or
income of RRUN. RRUN does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental agency or instrumentality or
of any circumstances which, after reasonable investigation, would result in the
discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the RRUN Schedules,
there are no material contracts, agreements, franchises, license
agreements or other commitments to
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which RRUN is a party or by which it or any of its assets, products,
technology or properties are bound;
(b) except as included or described in the RRUN Schedules or
reflected in the most recent RRUN balance sheet, RRUN is not a party to
any oral or written: (i) contract for the employment of any officer or
employee which is not terminable on thirty (30) days or less notice;
(ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any obligation,
other than one on which RRUN is a primary obligor, for collection and
other guaranties of obligations, which, in the aggregate do not exceed
more than one year or providing for payments in excess of $10,000 in
the aggregate; (v) consulting or other similar contracts with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreements; (vii) agreement with any present or former officer or
director of RRUN; or (viii) contract, agreement or other commitment
involving payments by it of more than $10,000 in the aggregate; and
(c) to RRUN's knowledge, all contracts, agreements,
franchises, license agreements and other commitments to which RRUN is a
party or by which its properties are bound and which are material to
the operations of RRUN taken as a whole, are valid and enforceable by
RRUN in all respects, except as limited by bankruptcy and insolvency
laws and by other laws affecting the rights of creditors generally.
Section 1.11 Material Contract Defaults. Except as set forth in the
RRUN Schedules, to the best of RRUN's knowledge and belief, RRUN is not in
default in any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the business,
operations, properties, assets or condition of RRUN, and there is no event of
default in any material respect under any such contract, agreement, lease or
other commitment in respect of which RRUN has not taken adequate steps to
prevent such a default from occurring.
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Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which RRUN is a
party or to which any of its properties or operations are subject.
Section 1.13 Governmental Authorizations. To the best of RRUN's
knowledge, RRUN has all licenses, franchises, permits or other governmental
authorizations legally required to enable RRUN to conduct its business in all
material respects as conducted on the date hereof. Except for compliance with
provincial, federal and state securities and corporation laws, as hereinafter
provided, no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is required in
connection with the execution and delivery by RRUN of this Agreement and the
consummation by RRUN of the transactions contemplated hereby.
Section 1.14 Compliance With Laws and Regulations. To the best of
RRUN's knowledge, except as disclosed in the RRUN Schedules, RRUN has complied
with all applicable statutes and regulations of any provincial, federal, state
or other governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets or condition of RRUN or would not result in
RRUN's incurring any material liability.
Section 1.15 Insurance. All of the insurable properties owned either
directly or indirectly by RRUN are insured for RRUN's benefit in accordance with
the insurance policies disclosed in the RRUN Schedules under valid and
enforceable policies issued by insurers of recognized responsibility. Such
policy or policies containing substantially equivalent coverage will be
outstanding and in full force at the Closing Date.
Section 1.16 Approval of Agreement The board of directors and
shareholders of RRUN have authorized the execution and delivery of this
Agreement by RRUN and have approved the transactions contemplated hereby.
Section 1.17 Material Transactions or Affiliations. Except as disclosed
herein and in the RRUN Schedules, there exists no material contract, agreement
or arrangement between RRUN and any predecessor and any person who was at the
time of such contract, agreement
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or arrangement an officer, director or person owning of record, or known by RRUN
to own beneficially, ten percent (10%) or more of the issued and outstanding
Common Shares of RRUN and which is to be performed in whole or in part after the
date hereof. In all of such transactions, the amount paid or received, whether
in cash, in services or in kind, has been during the full term thereof, and is
required to be during the unexpired portion of the term thereof, no less
favorable to RRUN than terms available from otherwise unrelated parties in
arms-length transactions. There are no commitments by RRUN, whether written or
oral, to lend any funds to, borrow any money from or enter into any other
material transactions with, any such affiliated person.
Section 1.18 Labor Relations. RRUN has never had a work stoppage
resulting from labor problems. To the best knowledge of RRUN, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of RRUN.
Section 1.19 Previous Sales of Securities. Since inception, RRUN has
sold 6,108,780 Common Shares to investors in reliance upon applicable exemptions
from the registration requirements under the laws of the United States and any
applicable state laws and in accordance with the laws of said jurisdictions.
Section 1.20 RRUN Schedules. Upon execution hereof, RRUN will deliver
to UM the following schedules, which are collectively referred to as the "RRUN
Schedules" and which consist of separate schedules dated as of the date of this
Agreement and instruments and data as of such date, all certified by the chief
executive officer of RRUN as complete, true and correct in all material
respects:
(a) copies of the articles of incorporation, bylaws and all
minutes of shareholders' and directors' meetings of RRUN or such other
corporate documentation and records required to maintain RRUN in good
standing in the State of Nevada;
(b) the financial statements of RRUN referenced hereinabove in
Section 1.4;
(c) a list indicating the names and addresses of the
stockholders of RRUN, together with the number of shares owned by them;
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(d) copies of all licenses, permits and other governmental
authorizations, requests or applications therefore, pursuant to which
RRUN carries on or proposes to carry on its business (except those
which in the aggregate, are immaterial to the present or proposed
business of RRUN);
(e) a list of every debt, mortgage, security interest, pledge,
lien, encumbrance or claim of any nature whatsoever in excess of
$10,000 as may affect RRUN, its properties or assets;
(f) a list of all executive employees of RRUN, including
current compensation, with notation as to job description and whether
or not such employee is subject to a written contract;
(g) a description of all real and personal property owned by
RRUN, together with a description of every mortgage, deed of trust,
pledge, lien, agreement, encumbrance, claim or equity interest of any
nature whatsoever in such real and personal property;
(h) copies of all material contracts, leases, agreements or
other instruments to which RRUN is a party or by which it or its
properties are bound;
(i) the name and location of each bank or other institution
with which RRUN has an account or safety deposit box and the names of
all persons authorized to draw thereon or having access thereto;
(j) a copy of all material documentation relating to the sale
of Common Shares provided by RRUN to its present stockholders including
a copy of the Stock Option Plan adopted by the shareholders of RRUN
(the "RRUN Stock Option Plan") and copies of all Stock Option
Agreements (the "RRUN Stock Option Agreements") entered into pursuant
to the RRUN Stock Option Plan;
(k) a list of insurance policies referred to in Section 1.15;
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(l) a description of any material adverse change in the
business operations, property, inventory, assets or condition of RRUN
since the most recent RRUN balance sheet required to be provided
pursuant to Section 1.4; and
(m) any other information, together with any required copies
of documents required to be disclosed in the RRUN Schedules by Sections
1.1 through 1.19.
RRUN shall cause the RRUN Schedules and the instruments and data
delivered to UM hereunder to be updated after the date hereof up to and
including the Closing Date, as hereinafter defined.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF UM
As an inducement to, and to obtain the reliance of RRUN, UM represents
and warrants as follows:
Section 2.1 Organization. UM is a corporation duly organized, validly
existing and in good standing under the laws of the state of Nevada and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it are now being conducted, including qualification to do
business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the UM Schedules (as hereinafter defined)
are complete and correct copies of the articles of incorporation and bylaws of
UM as in effect on the date hereof. The execution and delivery of this Agreement
does not and the consummation of the transactions contemplated by this Agreement
in accordance with the terms hereof will not, violate any provision of UM's
articles of incorporation or bylaws. UM has taken all action required by law,
its articles of incorporation, its bylaws or otherwise to authorize the
execution and delivery of this Agreement. UM has full power, authority and legal
right and has taken all action required by law, its articles of incorporation,
bylaws or otherwise to consummate the transactions herein contemplated.
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Section 2.2 Capitalization. The authorized capitalization of UM
consists of 100,000,000 shares of Common Stock, par value $0.0001 per share. As
of the date hereof there are 500,000 restricted Common Shares of UM issued and
outstanding which will be cancelled prior to the Closing Date (as defined
herein).
Section 2.3 Subsidiaries. UM has no subsidiary companies.
Section 2.4 Financial Statements.
(a) Included in the UM Schedules are the audited balance sheet
of UM for the fiscal years ended June 30, 2000 and 1999, and the
related statements of operations, stockholders' equity and cash flows
for the years then ended, and the unaudited balance sheet and related
statement of operations, stockholders' equity and cash flow for the
three month period ended September 30, 2000, which are included in the
schedules identified in Section 2.19(b).
(b) All such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods involved. The UM balance sheets present
fairly as of their respective dates the financial condition of UM. UM
did not have as of the date of any of such UM balance sheets, any
liabilities or obligations (absolute or contingent) which should be
reflected in a balance sheet or the notes thereto prepared in
accordance with generally accepted accounting principles, and all
assets reflected therein are properly reported and present fairly the
value of the assets of UM, in accordance with generally accepted
accounting principles. The statements of operations, stockholders'
equity and changes in financial position reflect fairly the information
required to be set forth therein by generally accepted accounting
principles.
(c) The books and records, financial and others, of UM are in
all material respects complete and correct and have been maintained in
accordance with good business accounting practices.
(d) UM has no liabilities with respect to the payment of any
federal, state, county, local or other taxes (including any
deficiencies, interest or penalties).
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(e) As of the Closing Date, as defined herein, the UM balance
sheets and the notes thereto, shall reflect that UM has: (i) no
receivables; (ii) no accounts payable; and (iii) no contingent
liabilities, direct or indirect, matured or unmatured.
Section 2.5 Information. The information concerning UM as set forth in
this Agreement and in the UM Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 2.6 Options and Warrants. Other than as previously disclosed by
UM to RRUN and as otherwise included in the UM Schedules, there are no existing
options, warrants, calls or commitments of any character to which UM is a party
and by which it is bound.
Section 2.7 Absence of Certain Changes or Events. Except as described
herein or in the UM Schedules:
(a) UM has not: (i) amended its articles of incorporation or
bylaws; (ii) waived any rights of value which in the aggregate are
extraordinary or material considering the business of UM; (iii) made
any material change in its method of management, operation or
accounting; or (iv) made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee;
(b) UM has not: (i) granted or agreed to grant any options,
warrants or other rights for its stocks, bonds or other corporate
securities calling for the issuance thereof, which option, warrant or
other right has not been cancelled as of the Closing Date; or (ii)
borrowed or agreed to borrow any funds or incurred or become subject
to, any material obligation or liability (absolute or contingent)
except liabilities incurred in the ordinary course of business; and
(c) to the best knowledge of UM, it has not become subject to
any law or regulation which materially and adversely affects, or in the
future may adversely affect, the business, operations, properties,
assets or condition of UM.
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Section 2.8 Title and Related Matters. As of the Closing Date, UM will
own no real, personal or intangible property.
Section 2.9 Litigation and Proceedings. There are no actions, suits or
proceedings pending or, to the best of UM's knowledge and belief, threatened by
or against or affecting UM, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before any
arbitrator of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business prospects of UM.
UM does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality.
Section 2.10 Contracts. On the Closing Date:
(a) there are no material contracts, agreements, franchises,
license agreements, or other commitments to which UM is a party or by
which it or any of its properties are bound.
(b) UM is not a party to any contract, agreement, commitment
or instrument or subject to any charter or other corporate restriction
or any judgment, order, writ, injunction, decree or award which
materially and adversely affects, or in the future may (as far as UM
can now foresee) materially and adversely affect, the business,
operations, properties, assets or conditions of UM; and
(c) UM is not a party to any material oral or written: (i)
contract for the employment of any officer or employee; (ii) profit
sharing, bonus, deferred compensation, stock option, severance pay,
pension, benefit or retirement plan, agreement or arrangement covered
by Title IV of the Employee Retirement Income Security Act, as amended;
(iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other similar contract with an unexpired term of more
than one year or providing for payments in excess of $1,000 in the
aggregate; (vi) collective bargaining agreement; (vii) agreement
<PAGE>
with any present or former officer or director of UM; or (viii)
contract, agreement, or other commitment involving payments by it of
more than $1,000 in the aggregate.
Section 2.11 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which UM is a party
or to which any of its properties or operations are subject.
Section 2.12 Material Contract Defaults. To the best of UM's knowledge
and belief, UM is not in default in any material respect under the terms of any
outstanding contract, agreement, lease or other commitment which is material to
the business, operations, properties, assets or condition of UM, and there is no
event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which UM has not taken adequate steps to
prevent such a default from occurring.
Section 2.13 Governmental Authorizations. To the best of UM's
knowledge, UM has all licenses, franchises, permits and other governmental
authorizations that are legally required to enable it to conduct its business
operations in all material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by UM of the transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of UM's
knowledge and belief, UM has complied with all applicable statutes and
regulations of any federal, state or other governmental entity or agency
thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of UM
or would not result in UM's incurring any material liability. Further, UM is, as
of the date of this Agreement, a "reporting company" under Section 12 of the
Securities Exchange Act of 1934, as amended, and is current in filing all
reports required to be filed pursuant to said Act.
Section 2.15 Insurance. UM has no insurable properties and no insurance
policies will be in effect at the Closing Date, as hereinafter defined.
<PAGE>
Section 2.16 Approval of Agreement The board of directors and
shareholders of UM have authorized the execution and delivery of this Agreement
by UM and have approved the transactions contemplated hereby.
Section 2.17 Material Transactions or Affiliations. As of the Closing
Date, there will exist no material contract, agreement or arrangement between UM
and any person who was at the time of such contract, agreement or arrangement an
officer, director or person owning of record, or known by UM to own
beneficially, ten percent (10%) or more of the issued and outstanding common
stock of UM and which is to be performed in whole or in part after the date
hereof. UM has no commitment, whether written or oral, to lend any funds to,
borrow any money from or enter into any other material transactions with, any
such affiliated person.
Section 2.18 Labor Relations. UM has never had a work stoppage
resulting from labor problems. UM has no employees other than its officers and
directors.
Section 2.19 Previous Sales of Securities. Since inception, UM has sold
500,000 Common Shares to investors in reliance upon applicable exemptions from
the registration requirements under the laws of the State of Nevada, the United
States and Canada and all such sales were made in accordance with the laws of
said jurisdictions.
Section 2.20 UM Schedules. Upon execution hereof, UM shall deliver to
RRUN the following schedules, which are collectively referred to as the "UM
Schedules" which are dated the date of this Agreement, all certified by an
officer of UM to be complete, true and accurate:
(a) complete and correct copies of the articles of
incorporation and bylaws of Nevada as in effect as of the date of this
Agreement;
(b) copies of all financial statements of UM identified in
Section 2.4(a);
(c) a list indicating the names and addresses of the
stockholders of UM, together with the number of shares owned by them;
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(d) the description of any material adverse change in the
business, operations, property, assets, or condition of UM since
September 30, 2000, required to be provided pursuant to Section 2.7;
(e) a list of all executive employees of UM, including current
compensation, with notation as to job description and whether or not
such employee is subject to a written contract; and
(f) any other information, together with any required copies
of documents, required to be disclosed in the UM Schedules by Sections
2.1 through 2.20.
UM shall cause the UM Schedules and the instruments to be delivered to
RRUN hereunder to be updated after the date hereof up to and including the
Closing Date. It is specifically acknowledged by UM that it has no licenses,
permits or other governmental authorizations relevant to its business.
ARTICLE III
EXCHANGE PROCEDURE
Section 3.1 Share Exchange/Delivery of RRUN Securities. On the Closing
Date, the holders of the RRUN Common Shares shall deliver to UM (i) certificates
or other documents evidencing all of the issued and outstanding RRUN Common
Shares, duly endorsed in blank or with executed stock power attached thereto in
transferable form; and (ii) investment letters, the form of which is attached
hereto as Exhibit "A". On the Closing Date, all previously issued and
outstanding shares of common stock of RRUN shall be canceled and all rights in
respect thereof shall cease.
Section 3.2 Issuance of UM Common Shares. In exchange for all of the
RRUN Common Shares tendered pursuant to Section 3.1, UM shall issue an aggregate
of 305,439 "restricted" UM Common Shares to the RRUN shareholders on a pro rata
basis to their existing ownership in RRUN. The calculation of the number of UM
common shares issued to each RRUN shareholder shall be rounded down to the
nearest whole share. Following the exchange of shares as set forth in Section
3.1 above and in this Section 3.2, UM and RRUN shall be merged pursuant to
Chapter 92A of the Nevada Revised Statutes with UM being the surviving entity.
<PAGE>
Section 3.3 Survival of Options.
(a) It is specifically understood and agreed that options for the
acquisition of RRUN common shares issued under the RRUN Stock Option Plan prior
to the merger of RRUN and UM shall survive the merger and shall become options
for the purchase of UM common shares. By entering into this Agreement, UM elects
to assume such treatment of all RRUN options as set forth in subsection 7(m) of
the RRUN Stock Option Plan. The number of UM common shares an option holder
shall be entitled to purchase and the exercise price per share shall be as
adjusted pursuant to subsection 4(b) of the RRUN Stock Option Agreements.
(b) Upon execution hereof or as soon thereafter as practical, all the
current shareholders of UM shall tender their share certificates, along with a
duly executed stock power or power of attorney, to UM for cancellation.
Section 3.4 Events Prior to Closing.
(a) Upon execution hereof or as soon thereafter as practical,
management of RRUN and UM shall execute, acknowledge and deliver (or shall cause
to be executed, acknowledged and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings or other
instruments required by this Agreement to be so delivered, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby, subject only to the conditions to Closing referenced
hereinbelow.
(b) Upon execution hereof or as soon thereafter as practical, all the
current shareholders of RRUN shall tender their share certificates, along with a
duly executed stock power, to UM for cancellation.
Section 3.5 Closing. The closing of the transaction contemplated by
this Agreement shall be as of the date in which (i) each party hereto has
executed this Agreement; and (ii) all of the shareholders of RRUN have approved
the terms of this Agreement; and (iii) all conditions to Closing referenced
hereinabove, as well as in Articles V and VI below, have been satisfied or
waived by the appropriate party and all documentation referenced herein is
delivered to the respective party herein, unless a different date is mutually
agreed to in writing by the parties hereto (the "Closing Date").
<PAGE>
Section 3.6 Termination.
(a) This Agreement may be terminated by the board of directors
of either RRUN or UM at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any court
or any governmental body which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement and which,
in the judgment of such board of directors, made in good faith and
based on the advice of its legal counsel, makes it inadvisable to
proceed with the exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required to
consummate such transactions; or
(iii) the conditions described in Articles V or VI, below, as
applicable, have not been satisfied in full.
In the event of termination pursuant to this subparagraph (a) of this
Section 3.6, no obligation, right, or liability shall arise hereunder
and each party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting and execution of this
Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of UM if RRUN shall
fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations
or warranties of RRUN contained herein shall be inaccurate in any
material respect, which noncompliance or inaccuracy is not cured after
20 days' written notice thereof is given to RRUN. If this Agreement is
terminated pursuant to this subparagraph (b) of this Section 3.6, this
Agreement shall be of no further force or effect and no obligation,
right or liability shall arise hereunder.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of RRUN if UM shall
fail to comply in any material
<PAGE>
respect with any of its covenants or agreements contained in this
Agreement or if any of the representations or warranties of UM
contained herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written notice
thereof is given to UM. If this Agreement is terminated pursuant to
this subparagraph (c) of Section 3.6, this Agreement shall be of no
further force or effect and no obligation, right or liability shall
arise hereunder.
Section 3.7 Directors of UM. Upon the Closing, the present members of
UM' s Board of Directors shall tender their resignations seriatim so that the
following persons are appointed directors of UM in accordance with procedures
set forth in the UM bylaws: Ray Hawkins, Edwin Kwong and Saya Kyvrikosaios. Each
director shall hold office until his successor shall have been duly elected and
shall have qualified or until his or her earlier death, resignation or removal.
Section 3.8 Officers of UM. Upon the Closing, the present officers of
UM shall tender their resignations and simultaneous therewith, the following
persons shall be elected as officers of UM in accordance with procedures set
forth in the UM bylaws:
NAME OFFICE
Ray Hawkins President
Edwin Kwong Secretary, Treasurer
ARTICLE IV
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. RRUN and UM will each
afford to the officers and authorized representatives of the other full access
to the properties, books and records of RRUN and UM, as the case may be, in
order that each may have full opportunity to make such reasonable investigation
as it shall desire to make of the affairs of the other and each will furnish the
other with such additional financial and operating data and other information as
to the business and properties of RRUN and UM, as the case may be, as the other
shall from time to time reasonably request.
<PAGE>
Section 4.2 Availability of Rule 144. Each of the parties acknowledge
that the stock of UM to be issued pursuant to this Agreement will be "restricted
securities," as that term is defined in Rule 144 and/or Regulation S as
promulgated pursuant to the Securities Act. UM is under no obligation to
register such shares under the Securities Act, or otherwise. Notwithstanding the
foregoing, however, following the Closing Date, UM will use its best efforts to:
(a) make publicly available on a regular basis not less than semi-annually,
business and financial information regarding UM so as to make available to the
shareholders of UM the provisions of Rule 144 pursuant to subparagraph (c)(2)
thereof; and (b) within ten (10) days of any written request of any stockholder
of UM, UM will provide to such stockholder written confirmation of compliance
with such of the foregoing subparagraph as may then be applicable. The
stockholders of UM holding restricted securities of UM as of the date of this
Agreement and their respective heirs, administrators, personal representatives,
successors and assigns, are intended third party beneficiaries of the provisions
set forth herein. The covenants set forth in this Section 4.2 shall survive the
Closing and the consummation of the transactions herein contemplated.
Section 4.3 Information for UM Public Reports. RRUN will furnish UM
with all information concerning RRUN and the RRUN Stockholders, including all
financial statements, required for inclusion in any registration statement or
public report intended to be filed by UM pursuant to the Securities Act, the
Exchange Act, or any other applicable federal or state law. RRUN covenants that
all information so furnished for either such registration statement or other
public release by UM, including the financial statements described in Section
1.4, shall be true and correct in all material respects without omission of any
material fact required to make the information stated not misleading.
Section 4.4 Special Covenants and Representations Regarding the UM
Common Shares to be Issued in the Exchange. The consummation of this Agreement,
including the issuance of the UM Common Shares to the stockholders of RRUN as
contemplated hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, inter alia, upon the
circumstances under which the RRUN stockholders acquire such securities. In
connection with reliance upon exemptions from the registration and prospectus
delivery requirements for such transactions, at the Closing, RRUN shall cause to
be delivered, and the RRUN stockholders shall deliver to UM, the investment
letter referenced in Section 3.1.
<PAGE>
Section 4.5 Third Party Consents. RRUN and UM agree to cooperate with
each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section 4.6 Actions Prior to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the RRUN or UM Schedules or as
permitted or contemplated by this Agreement, the parties hereto will
each use its best efforts to:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations
under material contracts, leases and instruments relating to or
affecting its assets, properties and business;
(v) maintain and preserve its business organization intact,
retain its key employees and maintain its relationship with its
material suppliers and customers; and
(vi) fully comply with and perform in all material respects
all obligations and duties imposed on it by all provincial, federal and
state laws and all rules, regulations and orders imposed by provincial,
federal or state governmental authorities.
<PAGE>
(vii) utilize its best efforts in order to establish and/or
maintain a trading market for UM' s Common Stock on a US over the
counter market.
(b) From and after the date of this Agreement until the
Closing Date, neither RRUN nor UM will, without the prior consent of
the other party:
(i) except as otherwise specifically set forth herein, make
any change in their respective articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding shares of
capital stock, except as may otherwise be required by law, or effect
any stock split or otherwise change its capitalization, except as
provided herein;
(iii) enter into or amend any employment, severance or similar
agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants, conversion
rights or other rights not existing on the date hereof to acquire any
shares of its capital stock; or
(v) purchase or redeem any shares of its capital stock, except
as disclosed herein.
Section 4.7 Indemnification.
(a) RRUN hereby agrees to indemnify UM and each of the
officers, agents and directors of UM as of the date of execution of
this Agreement against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject arising out of or based on any
inaccuracy by RRUN appearing in or misrepresentation made in this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement for a period of 18 months.
<PAGE>
(b) UM and its officers and directors hereby agree to
indemnify RRUN and each of the officers, agents, directors and current
shareholders of RRUN as of the Closing Date against any loss,
liability, claim, damage or expense (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating,
preparing or defending against any litigation, commenced or threatened
or any claim whatsoever), to which it or they may become subject
arising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement and particularly the
representation regarding no liabilities referred to in Section 2.4(b).
The indemnification provided for in this Section shall survive the
Closing and consummation of the transactions contemplated hereby and
termination of this Agreement for a period of 18 months.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF UM
The obligations of UM under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.1 Accuracy of Representations. The representations and
warranties made by RRUN in this Agreement were true when made and shall be true
at the Closing Date with the same force and effect as if such representations
and warranties were made at the Closing Date (except for changes therein
permitted by this Agreement), and RRUN shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by RRUN prior to or at the Closing. UM shall be furnished with a
certificate, signed by a duly authorized officer of RRUN and dated the Closing
Date, to the foregoing effect.
Section 5.2 Stockholder Approval The stockholders of RRUN shall have
approved this Agreement and the transactions contemplated thereby.
Section 5.3 Officer's Certificate. UM shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
RRUN to the effect that: (a) the representations and warranties of RRUN set
forth in the Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true and correct
as if made on the Closing Date; (b) RRUN has performed all covenants,
<PAGE>
satisfied all conditions, and complied with all other terms and provisions of
this Agreement to be performed, satisfied or complied with by it as of the
Closing Date; (c) since the date of RRUN' s audited Balance Sheet of November
15, 2000, there has not been any materially adverse change in the business,
prospects, properties or financial condition of RRUN; (d) since such date and
other than as previously disclosed to UM, RRUN has not entered into any material
transaction other than transactions which are usual and in the ordinary course
of its business; and (e) no litigation, proceeding, investigation or inquiry is
pending or, to the best knowledge of RRUN, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement or, to the extent not disclosed in the RRUN Schedules, by or
against RRUN which might result in any material adverse change in any of the
assets, properties, business or operations of RRUN.
Section 5.4 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of RRUN.
Section 5.5 Other Items. UM shall have received such further documents,
certificates or instruments relating to the transactions contemplated hereby as
UM may reasonably request.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF RRUN
The obligations of RRUN under this Agreement are subject to the
satisfaction, at or before the Closing Date (unless otherwise indicated herein),
of the following conditions:
Section 6.1 Accuracy of Representations. The representations and
warranties made by UM in this Agreement were true when made and shall be true as
of the Closing Date (except for changes therein permitted by this Agreement)
with the same force and effect as if such representations and warranties were
made at and as of the Closing Date, and UM shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by UM prior to or at the Closing. RRUN shall have been
<PAGE>
furnished with a certificate, signed by a duly authorized executive officer of
UM and dated the Closing Date, to the foregoing effect.
Section 6.2 Officer's Certificate. RRUN shall be furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of UM
to the effect that: (a) the representations and warranties of UM set forth in
the Agreement and in all Exhibits, Schedules and other documents furnished in
connection herewith are in all material respects true and correct as if made on
the Closing Date; (b) UM has performed all covenants, satisfied all conditions,
and complied with all other terms and provisions of the Agreement to be
performed, satisfied or complied with by it as of the Closing Date; (c) since
the date of UM's unaudited Balance Sheet of September 30, 2000, there has not
been any materially adverse change in the business, prospects, properties or
financial condition of UM; (d) since such date, UM has not entered into any
material transaction other than transactions which are usual and in the ordinary
course of its business; and (e) no litigation, proceeding, investigation or
inquiry is pending or, to the best knowledge of UM, threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in the UM
Schedules, by or against UM which might result in any material adverse change in
any of the assets, properties, business or operations of UM.
Section 6.3 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of UM.
Section 6.4 Additional Conditions to Closing. In addition to the
obligations contained herein, UM's shareholders shall adopt and approve
amendments to the UM Articles of Incorporation, changing the name of UM to "RRUN
Ventures Inc." (or such other name as may be available and acceptable to
management of RRUN).
Section 6.5 Compliance with Reporting Requirements. As of the Closing
Date, UM shall be current in and in compliance with all requirements of all
filings required to be tendered to the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934, as amended.
Section 6.6 Other Items. RRUN shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as RRUN may reasonably request.
<PAGE>
ARTICLE VII
MISCELLANEOUS
Section 7.1 Brokers and Finders. Except as stated in Schedule 7.1, each
party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing of
the parties together in the negotiation, execution, or consummation of this
Agreement. The parties each agree to indemnify the other against any claim by
any third person not listed in Schedule 7.1 for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
Section 7.2 Law, Forum and Jurisdiction. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Nevada.
Section 7.3 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to RRUN: 62 W.8th Avenue
Vancouver, BC
V5Y 1M7
Canada
If to UM: Suite 104, 1456 St. Paul St.
Kelowna
British Columbia, Canada V1Y 2E6
<PAGE>
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
Section 7.4 Attorneys' Fees. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
non-breaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section 7.6 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's Schedules delivered
pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries. This contract is solely among
RRUN and UM and, except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this Agreement.
Section 7.8 Entire Agreement This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There
<PAGE>
are no other courses of dealing, understandings, agreements, representations or
warranties, written or oral, except as set forth herein. This Agreement may not
be amended or modified, except by a written agreement signed by all parties
hereto.
Section 7.9 Survival; Termination. Except as otherwise provided herein,
the representations, warranties and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated.
Section 7.10 Counterparts Facsimile Execution. For purposes of this
Agreement, a document (or signature page thereto) signed and transmitted by
facsimile machine or telecopier is to be treated as an original document. The
signature of any party thereon, for purposes hereof, is to be considered as an
original signature, and the document transmitted is to be considered to have the
same binding effect as an original signature on an original document. At the
request of any party, a facsimile or telecopy document is to be re-executed in
original form by the parties who executed the facsimile or telecopy document. No
party may raise the use of a facsimile machine or telecopier machine as a
defense to the enforcement of the Agreement or any amendment or other document
executed in compliance with this Section.
Section 7.11 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
Section 7.12 Incorporation of Recitals. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
Section 7.13 Expenses. Each party herein shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation therefore.
<PAGE>
Section 7.14 Headings; Context. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section 7.15 Benefit. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
Section 7.16 Public Announcements. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section 7.17 Severability. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
Section 7.18 Failure of Conditions; Termination. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
Section 7.19 No Strict Construction. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof
Section 7.20 Execution Knowing and Voluntary. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprised by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof;
<PAGE>
and (c) is executing this Agreement voluntarily, free from any influence,
coercion or duress of any kind.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers, hereunto duly authorized, and entered
into as of the date first above written.
United Management, Inc., a Nevada RRUN Ventures Inc., a Nevada
corporation corporation
/s/ Christine Cerisse /s/ Ray Hawkins
--------------------------------- ----------------------------------
Christine Cerisse Ray Hawkins
Its: President Its: President
<PAGE>
EXHIBIT "A"
----------------------
FORM OF INVESTMENT LETTERS
--------------------
<PAGE>
EXHIBIT "A"
INVESTMENT LETTER
____________, 2000
United Management, Inc.
Gentlemen:
The undersigned herewith deposits certificate(s) for shares of common stock of
RRUN Ventures Inc., a Nevada corporation, ("RRUN"), as described below
(endorsed, or having executed stock powers attached) in acceptance of and
subject to the terms and conditions of that certain Agreement and Plan of
Reorganization (the "Agreement"), between United Management, Inc., a Nevada
corporation ("UM" or the "Company") and RRUN, dated December 18, 2000, receipt
of which is hereby acknowledged, in exchange for shares of Common Stock of UM
(the "Exchange Shares"). If any condition precedent to the Agreement is not
satisfied within the relevant time parameters established in Agreement (or any
extension thereof), the certificate(s) are to be returned to the undersigned.
The undersigned hereby represents, warrants, covenants and agrees with you that,
in connection with the undersigned's acceptance of the Exchange Shares and as of
the date of this letter:
1. The undersigned is aware that his, her or its acceptance of the
Exchange Shares is irrevocable, absent an extension of the Expiration Date of
any material change to any of the terms and conditions of the Agreement.
2. The undersigned warrants full authority to deposit all shares
referred to above and UM will acquire a good and unencumbered title thereto.
3. The undersigned has full power and authority to enter into this
Agreement and that this Agreement constitutes a valid and leg ally binding
obligation of the undersigned.
<PAGE>
4. By execution hereof, the undersigned hereby confirms that the UM
common stock to be received in exchange for RRUN common stock (the
"Securities"), will be acquired for investment for the undersigned's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the undersigned has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By execution hereof, the undersigned further represents the
undersigned does not have any
<PAGE>
--------------
___________, 2000
Page 2
contract, undertaking, agreement or arrangement with any third party, with
respect to any of the Securities.
5. The undersigned understands that the Securities are being issued
pursuant to available exemption thereto and have not been registered under the
Securities Act of 1933, as amended (the "1933 Act"), or under any state
securities laws. The undersigned understands that no registration statement has
been filed with the United States Securities and Exchange Commission nor with
any other regulatory authority and that, as a result, any benefit which might
normally accrue to a holder such as the undersigned by an impartial review of
such a registration statement by the Securities and Exchange Commission or other
regulatory authority will not be forthcoming. The undersigned understands that
he/she/it cannot sell the Securities unless such sale is registered under the
1933 Act and applicable state securities laws or exemptions from such
registration become available, In this connection the undersigned understands
that the Company has advised the Transfer Agent for the Common Shares to be
issued to US residents that the Securities are "restricted securities" under the
1933 Act and that they may not be transferred by the undersigned to an person
without the prior consent of the Company, which consent of the Company will
require an opinion of counsel to the effect that, in the event the Securities
are not registered under the 1933 Act, any transfer as may be proposed by the
undersigned must be entitled to an exemption from the registration provisions of
the 1933 Act. To this end, the undersigned acknowledges that a legend to the
following effect will be placed upon the certificate representing the Securities
and that the Transfer Agent has been advised of such facts:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, ANT) MAY BE OFFERED AND SOLD ONLY IF
REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN
EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE, THE
AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION
OF THE COMPANY.
<PAGE>
The undersigned understands that the foregoing legend on his/her its
certificate for the Common Shares limits their value, including their value as
collateral.
(The Balance of this Page Intentionally Left Blank)
<PAGE>
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______________, 2000
Page 3
In Witness Whereof, the undersigned has duly executed this Investment
Letter as of the date indicated hereon.
Dated: ______________, 2000
Very truly yours,
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(signature)
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(print name in full)
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(street address)
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(city, state, zip)
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(social security number or
employer identification number)
