Scovel Corporation SEC. File No.0-29195
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
March 9, 2000
Date of Report
(Date of Earliest Event Reported)
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
NEW MILLENNIUM MEDIA
INTERNATIONAL INC.
Suite 305 101 Philippe Pkwy.
Safety Harbor, Florida 34695
(Address of principal executive offices)
727-797-6664
727-797-7770 Fax.
Registrant's telephone number
SCOVEL CORPORATION 128 April Rd.
Port Moody, B.C.
Canada V3H-3M5
(Former name and former address)
Colorado 0-29195 84-1463284
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Merger (the "Merger Agreement") dated
as of March 9, 2000 between Scovel Corporation, a Delaware corporation
("Scovel"), and New Millennium Media International, Inc., a Colorado corporation
("New Millennium"), Gerald Ghini as owner of all the outstanding shares of
common stock of Scovel within two weeks from the date hereof will exchange all
the outstanding shares of common stock of Scovel for 500,000 shares of
restricted common stock of New Millenium in a transaction in which New
Millennium will be the surviving company. New Millennium will issue the 500,000
New Millennium restricted shares to Gerald Ghini.
The Merger Agreement was adopted by the unanimous consent of the Board of
Directors of Scovel and approved by the unanimous consent of the shareholders of
Scovel on March 9, 2000. The Merger Agreement was adopted by the unanimous
consent of the Board of Directors of New Millennium on March 9, 2000.
Prior to the merger, Scovel had 5,000,000 shares of common stock
outstanding which shares will be exchanged for 500,000 shares of restricted
common stock of New Millennium. By virtue of the merger, New Millennium will
acquire 100% of the issued and outstanding common stock of Scovel.
The officers of New Millennium will continue as officers of the successor
issuer. See "Management" below. The officers, directors and by-laws of New
Millennium will continue without change as the officers, directors and by- laws
of the successor issuer.
A copy of the Merger Agreement is filed as an exhibit to this Form 8-K and
is incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) The following table contains information regarding the shareholdings of
New Millennium's current directors and executive officers and those persons or
entities who beneficially own more than 5% of its common stock (giving effect to
the exercise of the warrants held by each such person or entity):
Amount of Common Percent of
Stock Beneficially Common Stock
Name Owned Beneficially
Owned (1)
John Thatch 2,500,000 10%
President & Ceo.
Gerald Parker 5,000,000 20%
Chairman
Andy Badolato 5,000,000 20%
Director & Vice
President of Finance
Tony Gomes 1,000,000 * 4%
Director & Vice
President of
Corporate Marketing
Troy Lowrie 2,250,000 9%
(Resigned) (2)
Less than 5%
(1) Based upon 24,500,000 outstanding shares of common stock (subsequent to the
effectiveness of the merger.
(2) Mr. Troy Lowrie was the past president and director of PMC which was merged
into New Millennium.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Merger Agreement was
negotiated between Scovel and New Millennium
In evaluating New Millennium as a candidate for the proposed merger, Scovel
used criteria such as the value of the assets of New Millennium and its
subsidiaries, the anticipated operations and acquisitions, material contracts,
business name and reputation, quality of management, and current and anticipated
operations. Scovel determined that the consideration for the merger was
reasonable.
History
New Millennium Media International, Inc. is a Colorado corporation organized on
April 21, 1998. New Millennium's principal place of business is located at l60l
West Evans Avenue, Denver, CO 80223. New Millennium is the successor to
Progressive Mailer Corp. ("PMC"), a corporation organized in Florida on February
5, l997. In February, l998, PMC's sole officer and director resigned and sold
all of her share ownership in PMC, which represented 95% of the issued and
outstanding shares of PMC, to Troy Lowrie and Mr. Lowrie was elected the
President and Director of PMC. In connection with the transaction, the principal
offices of PMC were relocated to Denver, Colorado. Effective April 30, l998, PMC
was merged into New Millennium in order to effect a change in domicile of PMC
from Florida to Colorado and the separate existence of PMC terminated pursuant
to the merger agreement. In connection with the merger, each share of PMC
outstanding on April 30, l998 was exchanged for a like number of shares of New
Millennium.
On November 3, l997, the PMC received clearance from the NASD to have its common
stock listed on the OTC Bulletin Board pursuant to PMC's application submitted
to the NASD pursuant to NASD Rule 6740 and Rule 15c2-11 under the Securities
Exchange Act of l934. The current trading symbol on the OTC Bulletin Board for
New Millennium's common stock is NMMI.
In March 1997 and April 1998, PMC conducted offerings of its common stock
pursuant to the exemption from registration afforded by Rule 504 FO Regulation D
promulgated under the Securities Act of l933, as amended. As a result of these
offerings, there are presently 2,055,000 unrestricted shares of common stock of
New Millennium issued and outstanding.
Effective, April 14, l998 PMC exerted into an Asset Purchase Agreement with Loam
Technologies, Inc, a California corporation, in exchange for the issuance of
shares of PMC's common stock to Loam. Pursuant to the terms of the Asset
Purchase Agreement, PMC acquired the exclusive rights to the IllumiSign
EyeCatcher display system, a special advertising display machine. New Millennium
intends to market and sell these machines.
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Business
New Millennium Media International
The outdoor advertising business reported earnings of 2.330 billion in 1998, an
increase of 9.1% over the previous year. The first quarter of 1999 revenues were
up 7.5% over the same period in 1998, according to the Outdoor Advertising
Association of America, Inc. This continued growth reflects the popularity and
effectiveness of outdoor and indoor advertising from both existing and new
advertisers. New Millennium Media International, Inc. intends to capitalize on
the demand for display advertising in two ways. New Millennium will install LED
outdoor displays in high traffic areas, and form joint ventures with strategic
partners to place a large number of indoor "patented" Eye Catcher boards. New
Millennium intends to provide the most highly visible sites throughout the world
and superior service within the industry. The Out of Home advertising industry
has continually grown year after year and shows no signs of waning. The new
millennium will demand the highest digital quality and the most cost efficient
LED advertising boards available. We believe New Millennium already has the
product available and subject to available financing we are ready to introduce
the product. New Millennium (Nasdaq Bulletin Board trading symbol: "NMMI") has a
unique opportunity to become an industry leader in the indoor and outdoor
advertising industry. We intend to change the way the industry markets and
generates ad revenues by setting a whole new standard of doing business. New
Millennium has the exclusive U.S. rights to an indoor advertising board called
the Illumisign EyeCatcher Display. This is a "patented" product, which ranges in
size from 11"x17" to 48"x72". These signs can display up to 24 advertisements on
a rotating basis. Each rotation runs two minutes. Illumisigns can generate
revenues up to $5,000 a month per display.
New Millennium has another product from a manufacturer of LED boards. New
Millennium has teamed up with E-Vision, a U.S. based company who's Korean based
affiliate manufactures one of the highest quality LED displays in the world.
E-Vision will sell us the LED boards at manufacturer's cost and will be a
limited partner in the revenues that the boards produce. This allows New
Millennium to purchase the highest quality product at a greatly reduced cost.
This business arrangement should also enable us to deploy approximately 2 1/2
times the number of boards that we would otherwise have. We also have teamed up
with E Vision one of the largest Media buyers in the country. This enables us to
sell advertisements on a national level that will benefit us in placing boards
throughout the U.S.
E-Vision has the capability to distribute any size board including boards for
Sport Arena's. These LED boards can run any commercial format on any sized
board. This give E-Vision displays a strong competitive advantage over other
display boards for which the commercial must be reformatted. Formatting often
takes weeks. E-Vision LED displays will run any format on any size board with
consistent color quality and clarity. Color quality and clarity are very
important to a national advertiser who wants their colors and logos the same on
all boards. E-Vision will assist New Millennium with training and support from
the first board and will provide New Millennium with ongoing assistance in all
aspects of programming, technical and software support. As a manufacturing
partner, E-Vision and its Korean affiliate will supply New Millennium, free of
charge software upgrades as they become available. New Millennium also has an
agreement for the U.S. distribution rights from Multiadd, an English based
company. Multiadd manufactures a patented indoor IllumiSign, which is called the
"Eyecatcher" board. This board is steel incased, front lighted, and displays
poster type ads. The "Eyecatcher" is capable of displaying up to 24
advertisements from size 11"x17" to 48"x72." Each advertisement has the ability
to rotate in cycles of 3 seconds to 24 hours. This is a significant advantage
over other indoor boards, as the competitive boards only display one to three
poster ads at a time.
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Capital Requirements
New Millennium, with minimal overhead and revenues needs to raise the following
capital to fulfill its business plan.
Working capitol. $ 500,000.
Purchase of LED Displays $ 3,000,000.
Purchase of "Eyecatcher" Displays $ 500,000.
TOTAL CAPITAL $ 4,000,000
We have teamed up with a select group of strategic partners that will enable New
Millennium to achieve its goals. We have a commitment from Investment Management
of America, Inc., a leading venture capital firm based in Clearwater, Florida.
IMA provides funding and business development services and support for companies
like New Millennium. Its principals have founded companies such as Inktomi,
Milcom, Consortio, LiquidGolf.com, ByeByeNow.com, PublicAccess.com and several
others.
Management
John "JT" Thatch Age 37
John "JT" Thatch serves as Director, CEO and President of New Millennium Media
Inc. He brings to the company over 15 years of entrepreneurial experience. He
has successfully founded, operated and managed his own businesses, and limited
partnerships. He brings experience in the areas of management, retail sales and
financing. J.T. has strong ties in the business community and brings solid
leadership and integrity to the New Millennium. His experience and enthusiasm
will provide us with the ability to expand our growth within the outdoor/indoor
advertising arena.
Gerald Parker Age 55
Gerald Parker serves as Chairman of the Board. He has founded several companies,
and was one of the five original founders of Inktomi Corporation (Nasdaq NMS
trading symbol: "INKT"). Gerry also serves as the President of Investment
Management of America (IMA). IMA is a leading venture capital firm that provides
funding and business strategies to growing companies. He has been instrumental
in raising over $300 million of venture capital for companies. These companies
have a combined market valuation of over $7.5 billion. Mr. Parker's experience
will bring knowledge and stability to enable us the achieve to goals set forward
in this business plan.
Andy Badolato Age 39
Andy Badolato serves as a Director and Vice President of Corporate Finance. He
has successfully managed the mergers of several public companies as CEO and
founder of Investment Management of America (IMA). Mr. Badolato is an NASD
registered representative and a registered principal. He holds series 7, 24 and
63 license classifications, which currently are in inactive status.
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Tony Gomes Age 37
Tony Gomes serves as a Director and Vice President of Corporate Marketing. Mr.
Gomes has over 12 years of corporate marketing experience with fortune 100
companies. He was the Director of Marketing at Tropicana and managed the $1.6
billion Dole juice, twister beverage and Tropicana Orange Juice accounts. His
vision turned around the Twister Juice franchise where sales increased 40% with
profits increasing 112%. Prior to Tropicana Mr. Gomes was the Brand Manager of
Gatorade and was instrumental in signing Michael Jordan as their national
spokesman. Tony will be very instrumental in our national marketing strategies.
DESCRIPTION OF SECURITIES
New Millennium has an authorized capitalization of 35,000,000 shares of common
stock, $.001 par value per share of which 24,000,000 shares are issued and
outstanding and 10,000,000 shares of preferred stock, $.001 par value per share,
of which no shares have been designated or issued.
CURRENT TRADING MARKET FOR THE NEW MILLENNIUM'S SECURITIES.
New Millennium's common stock was traded on the OTC Bulletin Board operated by
Nasdaq under the symbol New Millennium. New Millennium did not file a
registration statement with the Securities and Exchange Commission and has not
been a reporting company under the Securities Exchange Act of 1934. The Nasdaq
Stock Market has implemented a change in its rules requiring all companies
trading securities on the OTC Bulletin Board to be registered as a reporting
company. New Millennium was required to become a reporting company by the close
of business on February 25, 2000. New Millennium has effected the merger with
Scovel and has become a successor issuer thereto in order to comply with the
reporting company requirements implemented by the Nasdaq Stock Market.
PENNY STOCK REGULATION. New Millennium's common stock may be deemed a penny
stock. Penny stocks generally are equity securities with a price of less than
$5.00 per share other than securities registered on certain national securities
exchanges or quoted on the Nasdaq Stock Market, provided that current price and
volume information with respect to transactions in such securities is provided
by the exchange or system. New Millennium's securities may be subject to "penny
stock rules" that impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and accredited investors (generally those with assets in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 together with their
spouse). For transactions covered by these rules, the broker-dealer must make a
special suitability determination for the purchase of such securities and have
received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the "penny stock rules" require the delivery, prior to the transaction,
of a disclosure schedule prescribed by the Commission relating to the penny
stock market. The broker-dealer also must disclose the commissions payable to
both the broker-dealer and the registered representative and current quotations
for the securities. Finally, monthly statements must be sent disclosing recent
price information on the limited market in penny stocks. Consequently, the
"penny stock rules" may restrict the ability of broker-dealers to sell New
Millennium's securities. The foregoing required penny stock restrictions will
not apply to New Millennium's securities if such securities maintain a market
price of $5.00 or greater. As of the date of this report, the trading price of
New Millennium's common stock is in excess of $5.00 per share, although there
can be no assurance that the price of New Millennium's securities will maintain
such a level.
BANKRUPTCY OR RECEIVERSHIP
Not applicable.
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Upon effectiveness of the merger, pursuant to Rule 12g-3(a) of the General
Rules and Regulations of the Securities and Exchange Commission, New Millennium
became the successor issuer to Scovel Management Inc. for reporting purposes
under the Securities Exchange Act of 1934 and elects to reports under the Act
effective February 28, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The President and sole director of Scovel Management Inc., Gerald Ghini,
resigned such offices as a result of the merger with New Millennium. The
officers and directors of New Millennium will continue as the officers and
directors of the successor issuer.
ITEM 7. FINANCIAL STATEMENTS
No financial statements are filed herewith. The Registrant shall file
financial statements by amendment hereto not later than 60 days after the date
that this Current Report on Form 8-K must be filed.
ITEM 8. CHANGE IN FISCAL YEAR
New Millennium has a December 31 year-end.
Exchange Act of 1934.
New Millennium was required to become a reporting company by the close of
business on March 9, 2000. New Millennium has effected the merger with Scovel
and has become a successor issuer thereto in order to comply with the reporting
company requirements implemented by the Nasdaq Stock Market.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
NEW MILLENNIUM MEDIA INTERNATIONAL INC.
By /s/
---------------------------
John Thatch
President and
Chief Executive Officer
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER between SCOVEL CORPORATION, a Delaware
corporation ("Scovel"), and NEW MILLENNIUM MEDIA INTERNATIONAL, INC., a Colorado
corporation ("New Millennium"), Scovel and New Millennium being sometimes
referred to herein as the "Constituent Corporations."
WHEREAS, the board of directors of each Constituent Corporation deems it
advisable that the Constituent Corporations merge into a single corporation in a
transaction intended to qualify as a reorganization within the meaning of
Section 368 (a)(1)(A) of the Internal Revenue Code of 1986, as amended ("the
Merger");
NOW, THEREFORE, in consideration of the premises and the respective mutual
covenants, representations and warranties herein contained, the parties agree as
follows:
1. SURVIVING CORPORATION. Scovel shall be merged with and into New
Millennium, which shall be the surviving corporation in accordance with the
applicable laws of its state of incorporation.
2. MERGER DATE. The Merger shall become effective (the" Merger Date") upon
the completion of:
2.1. Adoption of this agreement by Scovel pursuant to the General
Corporation Law of Delaware and by New Millennium pursuant to Colorado Revised
Statutes and the Colorado General Corporation Law.
2.2. Execution and filing by New Millennium of Articles of Merger with the
Department of State of the State of Colorado in accordance with the Colorado
Revised Statutes.
2.3. Execution and filing by Scovel of a Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the General
Corporation Law of Delaware.
3. TIME OF FILINGS. The Articles of Merger shall be filed with the
Department of State of the State of Colorado and the Certificate of Merger shall
be filed with the Secretary of State of Delaware upon the approval, as required
by law, of this agreement by the Constituent Corporations and the fulfillment or
waiver of the terms and conditions herein. These filings will be completed
within two weeks from the execution of this Agreement.
4. GOVERNING LAW. The surviving corporation shall be governed by the laws
of the State of incorporation of New Millennium.
5. CERTIFICATE OF INCORPORATION. The Articles of Incorporation of New
Millennium shall be the Articles of Incorporation of the surviving corporation
from and after the Merger Date, subject to the right of New Millennium to amend
its Articles of Incorporation in accordance with the laws of the State of its
incorporation.
6. BYLAWS. The Bylaws of the surviving corporation shall be the Bylaws of
New Millennium as in effect on the date of this agreement.
7. BOARD OF DIRECTORS AND OFFICERS. The officers and directors of New
Millennium, or such other persons as shall be selected by it, shall be the
officers and directors of the surviving corporation following the Merger Date.
8. NAME OF SURVIVING CORPORATION. The name of the surviving corporation
will continue as "New Millennium Media International, Inc." unless changed by
New Millennium.
9. CONVERSION. The mode of carrying the Merger into effect and the manner
and basis of converting the shares of Scovel into shares of New Millennium are
as follows:
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9.1. The aggregate number of shares of Scovel Common Stock issued and
outstanding on the Merger Date shall, by virtue of the Merger and without any
action on the part of the holders thereof, be converted into an aggregate of
500,000 shares of New Millennium Common Stock adjusted by any increase for
fractional shares and reduced by any Dissenting Shares (defined below).
The New Millennium Common Stock to be issued hereunder ("the New Millennium
Shares") will be issued pursuant to Rule 506 of the General Rules and
Regulations of the Securities and Exchange Commission, will be restricted as to
transferability pursuant to Rule 144 thereof, and will bear substantially the
following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "ACT") AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT.
THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY
OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
9.2. Upon completion of the Merger, there shall be 24,500,000 shares of New
Millennium Common Stock issued and outstanding, subject to such adjustments,
held as follows: 500,000 common shares held by Gerald Ghini and 24,000,000
common shares held by the other shareholders of New Millennium. The management
of New Millennium will not consolidate, reverse split or rollback the common
shares of New Millennium during the one-year period in which Gerald Ghini is
restricted from selling the 500,000 shares of New Millennium stock. Such
dilution would have an adverse effect on the amount and value of shares issued
to Gerald Ghini by New Millennium.
9.3. All outstanding Common or Preferred Stock of Scovel and all warrants,
options or other rights to its Common or Preferred Stock shall be retired and
canceled as of the Merger Date.
9.4. Each share of Scovel Common Stock that is owned by Scovel as treasury
stock shall, by virtue of the Merger and without any action on the part of
Scovel, be retired and canceled as of the Merger Date.
9.5. Each certificate evidencing ownership of shares of New Millennium
Common Stock issued and outstanding on the Merger Date or held by New Millennium
in its treasury shall continue to evidence ownership of the same number of
shares of New Millennium Common Stock.
9.6. New Millennium Common Stock shall be issued to the holders of Scovel
Common Stock in exchange for their shares on a prorata bases in accordance with
each holder's relative ownership of the Scovel Common Stock that is being
exchanged.
9.7. The shares of New Millennium Common Stock to be issued in exchange for
Scovel Common Stock hereunder shall be proportionately reduced by any shares
owned by Scovel shareholders who shall have timely objected to the Merger (the"
Dissenting Shares") in accordance with the provisions of the General Corporation
Law of Delaware, as provided therein.
10. EXCHANGE OF CERTIFICATES. As promptly as practicable after the Merger
Date, each holder of an outstanding certificate or certificates theretofore
representing shares of Scovel Common Stock (other than certificates representing
Dissenting Shares) shall surrender such certificate(s) for cancellation to the
party designated herein to handle such exchange (the "Exchange Agent"), and
shall receive in exchange a certificate or certificates representing the number
of full shares of New Millennium Common Stock into which the shares of Scovel
Common Stock represented by the certificate or certificates so surrendered shall
have been converted. Any exchange of fractional shares will be rounded up to the
next highest number of full shares. New Millennium may, in its discretion,
require a bond in customary form before issuing any share certificate where a
corresponding share certificate has not been delivered by a shareholder of
Scovel because of loss or other reason.
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11. UNEXCHANGED CERTIFICATES. Until surrendered, each outstanding
certificate that prior to the Merger Date represented Scovel Common Stock (other
than certificates representing Dissenting Shares) shall be deemed for all
purposes, other than the payment of dividends or other distributions, to
evidence ownership of the number of shares of New Millennium Common Stock into
which it was converted. No dividend or other distribution payable to holders of
New Millennium Common Stock as of any date subsequent to the Merger Date shall
be paid to the holders of outstanding certificates of Scovel Common Stock;
provided, however, that upon surrender and exchange of such outstanding
certificates (other than certificates representing Dissenting Shares), there
shall be paid to the record holders of the certificates issued in exchange
therefore the amount, without interest thereon, of dividends and other
distributions that would have been payable subsequent to the Merger Date with
respect to the shares of New Millennium Common Stock represented thereby.
12. EFFECT OF THE MERGER. On the Merger Date, the separate existence of
Scovel shall cease (except insofar as continued by statute), and it shall be
merged with and into New Millennium. All the property, real, personal and mixed,
of each of the Constituent Corporations, and all debts due to either of them,
shall be transferred to and vested in New Millennium, without further act or
deed. New Millennium shall thenceforth be responsible and liable for all the
liabilities and obligations, including liabilities to holders of Dissenting
Shares, of each of the Constituent Corporations, and any claim or judgment
against either of the Constituent Corporations maybe enforced against New
Millennium.
13. REPRESENTATIONS AND WARRANTIES OF SCOVEL. Scovel represents and
warrants that:
13.1. CORPORATE ORGANIZATION AND GOOD STANDING. Scovel is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware, and is qualified to do business as a foreign corporation in
each jurisdiction, if any, in which its property or business requires such
qualification.
13.2. REPORTING COMPANY STATUS. Scovel has filed with the Securities and
Exchange Commission a registration statement in form 10-SB, which became
effective pursuant to the Securities Exchange Act of 1934 on February 9, 2000
and is a reporting company pursuant to Section (g) thereunder.
13.3. REPORTING COMPANY FILINGS. Scovel has timely filed and is current on
all reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934.
13.4. CAPITALIZATION. Scovel's authorized capital stock consists of
100,000,000 shares of Common Stock, $.0001 par value, of which 5,000,000 shares
are issued and outstanding.
13.5. ISSUED STOCK. All the outstanding shares of its Common Stock are duly
authorized and validly issued, fully paid and non-assessable.
13.6. STOCK RIGHTS. Except as set out by attached schedule, there are no
stock grants, options, rights, warrants or other rights to purchase or obtain
Scovel Common or Preferred Stock issued or committed to be issued.
13.7. CORPORATE AUTHORITY. Scovel has all requisite corporate power and
authority to own, operate and lease its properties, to carry on its business as
it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this agreement and all other agreements and
instruments related to this agreement
13.8 COMPLIANCE WITH RULE 12g-3. As a result of the merger and in
accordance with Rule 12g-3, NEW MILLENNIUM will be the successor company and the
common stock will be deemed qualified for listing on the Bulletin Board.
13.9. FINANCIAL STATEMENTS. Scovel's financial statements dated January 21,
2000, copies of which will have been delivered by Scovel to New Millennium prior
to the Merger Date (the "Scovel Financial Statements"), fairly present the
financial condition of Scovel as of the date therein and the results of its
operations for the periods then ended in conformity with generally accepted
accounting principles consistently applied.
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13.10 ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent reflected or
reserved against in the Scovel Financial Statements, Scovel did not have at that
date any liabilities or obligations (secured, unsecured, contingent, or
otherwise) of a nature customarily reflected in a corporate balance sheet
prepared in accordance with generally accepted accounting principles.
13.11. NO MATERIAL CHANGES. There has been no material adverse change in
the business, properties or financial condition of Scovel since the date of the
Scovel Financial Statements.
13.12. LITIGATION. There is not, to the knowledge of Scovel, any pending,
threatened, or existing litigation, bankruptcy, criminal, civil, or regulatory
proceeding or investigation, threatened or contemplated against Scovel or
against any of its officers.
13.13. CONTRACTS. Scovel is not a party to any material contract not in the
ordinary course of business that is to be performed in whole or in part at or
after the date of this agreement.
13.14. TITLE. Scovel has good and marketable title tall the real property
and good and valid title to all other property included in the Scovel Financial
Statements. The properties of Scovel are not subject to any mortgage,
encumbrance or lien of any kind except minor encumbrances that do not materially
interfere with the use of the property in the conduct of the business of Scovel.
13.15. TAX RETURNS. All required tax returns for federal, state, county,
municipal, local, foreign and other taxes and assessments have been properly
prepared and filed by Scovel for all years for which such returns are due unless
an extension for filing any such return has been filed. Any and all federal,
state, county, municipal, local, foreign and other taxes and assessments,
including any and all interest, penalties and additions imposed with respect to
such amounts have been paid or provided for. The provisions for federal and
state taxes reflected in the Scovel Financial Statements are adequate to cover
any such taxes that may be assessed against Scovel in respect of its business
and its operations during the periods covered by the Scovel Financial Statements
and all prior periods.
13.16. NO VIOLATION. Consummation of the Merger will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of Scovel is subject or by which Scovel is
bound.
14. REPRESENTATIONS AND WARRANTIES OF NEW MILLENNIUM. New Millennium
represents and warrants that:
14.1. CORPORATE ORGANIZATION AND GOOD STANDING. New Millennium is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Colorado and is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property or business
requires such qualification.
14.2. CAPITALIZATION. New Millennium's authorized capital stock consists of
35,000,000 shares of Common Stock, $.001 par value, of which 24,000,000 shares
are issued and outstanding, and 10,000,000 shares of preferred stock, of which
none are issued and outstanding.
14.3. ISSUED STOCK. All the outstanding shares of its Common Stock are duly
authorized and validly issued fully paid and nonassessable.
14.4. STOCK RIGHTS. There are no stock grants, options, rights, warrants or
other rights to purchase or obtain New Millennium Common or Preferred Stock
issued or committed to be issued.
14.5 CORPORATE AUTHORITY. New Millennium has all Requisite corporate power
and authority to own, operate and lease its properties, to carry on its business
as it is now being conducted and to execute, deliver, perform and conclude the
transactions contemplated by this Agreement and all other agreements and
instruments related to this agreement.
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14.6. SUBSIDIARIES. Except as set out in Disclosure Schedule 14.6, New
Millennium has no subsidiaries.
14.7. FINANCIAL STATEMENTS. New Millennium's Financial Statements fairly
present the financial condition of New Millennium as of the date therein and the
results of its operations for the periods then ended in conformity with
generally accepted accounting principles consistently applied.
14.8. ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent reflected or
reserved against in the New Millennium Financial Statements, New Millennium did
not have at that date any liabilities or obligations (secured, unsecured,
contingent, or otherwise) of nature customarily reflected in a corporate balance
sheet prepared in accordance with generally accepted accounting principles.
14.9. NO MATERIAL CHANGES. There has been no material adverse change in the
business, properties or financial condition of New Millennium since the date of
the New Millennium Financial Statements.
14.10. LITIGATION. Except as set out in Disclosure Schedule 14.10, there is
not, to the knowledge of New Millennium, any pending, threatened, or existing
litigation, bankruptcy, criminal, civil, or regulatory proceeding or
investigation, threatened or contemplated against New Millennium or against any
of its officers.
14.11. CONTRACTS. New Millennium is not a party to any material contract
not in the ordinary course of business or in the course of its proposed
acquisitions that is to be performed in whole or in part at or after the date of
this Agreement.
14.12. TITLE. New Millennium has good and marketable title to all the real
property and good and valid title to all other property included in the New
Millennium Financial Statements. The properties of New Millennium are not
subject to any mortgage, encumbrance or lien of any kind except minor
encumbrances that do not materially interfere with the use of the property in
the conduct of the business of New Millennium.
14.13. TAX RETURNS. All required tax returns for federal, state, county,
municipal, local, foreign and other taxes and assessments have been properly
prepared and filed by New Millennium for all years for which such returns are
due unless an extension for filing any such return has been filed. Any and all
federal, state, county, municipal, local, foreign and other taxes and
assessments, including any and all interest, penalties and additions imposed
with respect to such amounts have been paid or provided for. The provisions for
federal and state taxes reflected in the New Millennium Financial Statements are
adequate to cover any such taxes that maybe assessed against New Millennium in
respect of its business and its operations during the periods covered by the New
Millennium Financial Statements and all prior periods.
14.14. NO VIOLATION. Consummation of the Merger will not constitute or
result in a breach or default under any provision of any charter, bylaw,
indenture, mortgage, lease, or agreement, or any order, judgment, decree, law,
or regulation to which any property of New Millennium is subject or by which New
Millennium is bound.
15. CONDUCT OF SCOVEL PENDING THE MERGER DATE. Scovel covenants that
between the date of this Agreement and the Merger Date:
15.1. No change will be made in Scovel's Articles of Incorporation or
bylaws.
15.2. Scovel will not make any change in its authorized or issued capital
stock, declare or pay any dividend or other distribution or issue, encumber,
purchase, or otherwise acquire any of its capital stock other than as provided
herein.
15.3. Scovel will use its best efforts to maintain and preserve its
business organization, employee relationships and goodwill intact, and will not
enter into any material commitment except in the ordinary course of business.
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16 CONDUCT OF NEW MILLENNIUM PENDING THE MERGER DATE. New Millennium
covenants that between the date of this Agreement and the Merger Date:
16.1. No change will be made in New Millennium's Articles of incorporation
or bylaws.
16.2. New Millennium will not make any change in its authorized or issued
capital stock, declare or pay any dividend or other distribution or issue,
encumber, purchase, or otherwise acquire any of its capital stock otherwise than
as provided herein.
16.3. New Millennium will use its best efforts to maintain and preserve its
business organization, employee relationships and goodwill intact, and will not
enter into any material commitment except in the ordinary course of business.
17. CONDITIONS PRECEDENT TO OBLIGATION OF NEW MILLENNIUM. New Millennium's
obligation to consummate the Merger shall be subject to fulfillment on or before
the Merger Date of each of the following conditions, unless waived in writing by
Scovel:
17.1. NEW MILLENNIUM'S REPRESENTATIONS AND WARRANTIES. The representations
and warranties of New Millennium set forth herein shall be true and correct at
the Merger Date as though made at and as of that date, except as affected by
transactions contemplated hereby.
17.2. NEW MILLENNIUM'S COVENANTS. New Millennium shall have performed all
covenants required by this agreement to be performed by it on or before the
Merger Date.
17.3. APPROVAL. New Millennium shall have approved this agreement in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders.
17.4. SUPPORTING DOCUMENTS OF NEW MILLENNIUM. New Millennium shall have
delivered to Scovel supporting documents in form and substance satisfactory to
Scovel to the effect that:
(i) New Millennium is a corporation duly organized, validly existing, and
in good standing.
(ii) New Millennium's authorized and issued capital stock is asset forth
herein.
(iii) The execution and adoption of this agreement have been duly
authorized by New Millennium in such manner as is required bylaw including all
appropriate action by directors and, if required, by shareholders.
18. CONDITIONS PRECEDENT TO OBLIGATION OF NEW MILLENNIUM. New Millennium's
obligation to consummate the Merger shall be subject to fulfillment by Scovel on
or before the Merger Date of each of the following conditions, unless waived in
writing by New Millennium:
18.1. SCOVEL'S REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Scovel set forth herein shall be true and correct at the Merger
Date as though made at and as of that date, except as affected by transactions
contemplated hereby.
18.2. SCOVEL'S COVENANTS. Scovel shall have performed all covenants
required by this agreement to be performed by it on or before the Merger Date.
18.3. APPROVAL. Scovel shall have approved this Agreement in such manner as
is required by law including all appropriate action by directors and, if
required, by shareholders.
18.4. SUPPORTING DOCUMENTS OF SCOVEL. Scovel shall have delivered to New
Millennium supporting documents in form and substance satisfactory to New
Millennium to the effect that:
(i) Scovel is a corporation duly organized, validly existing, and in good
standing.
(ii) Scovel's authorized and issued capital stock is as set forth herein.
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(iii) The execution and adoption of this Agreement have been duly
authorized by Scovel in such manner as is required bylaw including all
appropriate action by directors and, if required, by shareholders.
19. ACCESS. From the date hereof to the Merger Date, New Millennium and
Scovel shall provide each other with such information and permit each other's
officers and representatives such access to its properties and books and records
as the other may from time to time reasonably request. If the Merger is not
consummated with the intended results as defined hereafter, all documents and
consideration received in connection with this agreement shall be returned to
the party furnishing such documents and consideration, and all information so
received shall be treated as confidential. The results intended from this merger
are that NEW MILLENNIUM will emerge with fully reporting status.
20. CLOSING.
20.1. The transfers and deliveries to be made pursuant to this agreement
(the "Closing") shall be made by and take place at the offices of the Exchange
Agent or other location designated by the Constituent Corporations without
requiring the meeting of the parties hereof. All proceedings to be taken and all
documents to be executed at the Closing shall be deemed to have been taken,
delivered and executed simultaneously, and no proceeding shall be deemed taken
nor documents deemed executed or delivered until all have been taken, delivered
and executed.
20.2. Any copy, facsimile telecommunication or other reliable reproduction
of the writing or transmission required by this agreement or any signature
required thereon may be used in lieu of an original writing or transmission or
signature for any and all purposes for which the original could be used,
provided that such copy, facsimile telecommunication or other reproduction shall
be complete reproduction of the entire original writing or transmission or
original signature.
20.3. At the Closing, Scovel shall deliver to the Exchange Agent in
satisfactory form, if not already delivered to New Millennium:
(i) A list of the holders of record of the shares of Scovel Common Stock
being exchanged, with an itemization of the number of shares held by each, the
address of each holder, and the aggregate number of shares of New Millennium
Common Stock to be issued to each holder;
(ii) Evidence of the execution and adoption of this Agreement in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders;
(iii) Certificate of the Secretary of State of Delaware as of a recent date
as to the good standing of Scovel;
(iv) Certified copies of the resolutions of the board of directors of
Scovel authorizing the execution of this agreement and the consummation of the
Merger;
(v) The Scovel Financial Statements;
(vi) Secretary's certificate of incumbency of the officers and directors of
Scovel;
(vii) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein; and
(viii) The share certificates for the outstanding Common Stock of Scovel to
be exchanged hereunder or, where any such certificate is not delivered, an
affidavit of lost certificate or other reason for non-delivery.
20.4. At the Closing, New Millennium shall deliver to the Exchange Agent in
satisfactory form, if not already delivered to Scovel:
(i) A list of its shareholders of record;
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(ii) Evidence of the execution and adoption of this Agreement in such
manner as is required by law including all appropriate action by directors and,
if required, by shareholders;
(iii) Certificate of the Secretary of State of its state of incorporation
as of a recent date as to the good standing of New Millennium;
(iv) Certified copies of the resolutions of the board of directors of New
Millennium authorizing the execution of this agreement and the consummation of
the Merger;
(v) The New Millennium Financial Statements;
(vi) Secretary's certificate of incumbency of the officers and directors of
New Millennium;
(vii) Any document as may be specified herein or required to satisfy the
conditions, representations and warranties enumerated elsewhere herein; and
(viii) The share certificates of New Millennium to be delivered to the
shareholders of Scovel hereunder, in proper names and amounts, and bearing
legends, if any, required and appropriate under applicable securities laws.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Constituent Corporations setout herein shall survive the
Merger Date.
22. ARBITRATION.
22.1. SCOPE. The parties hereby agree that any and all claims (except only
for requests for injunctive or other equitable relief) whether existing now, in
the past or in the future as to which the parties or any affiliates may be
adverse parties, and whether arising out of this agreement or from any other
cause, will be resolved by arbitration before the American Arbitration
Association within the state of Florida.
22.2. CONSENT TO JURISDICTION, SITUS AND JUDGMENT. The parties hereby
irrevocably consent to the jurisdiction of the American Arbitration Association
and the situs of the arbitration (and any requests for injunctive or other
equitable relief) within the state of Florida. Any award in arbitration may be
entered in any domestic or foreign court having jurisdiction over the
enforcement of such awards.
22.3. APPLICABLE LAW. The law applicable to the arbitration and this
agreement shall be that of the State of Colorado, determined without regard to
its provisions, which would otherwise apply to question of conflict of laws.
22.4. DISCLOSURE AND DISCOVERY. The arbitrator may, in its discretion,
allow the parties to make reasonable disclosure and discovery in regard to any
matters which are the subject of the Arbitration and to compel compliance with
such disclosure and discovery order. The arbitrator may order the parties to
comply with all or any of the disclosure and discovery provisions of the Federal
Rules of Civil Procedure, as they then exist, as may be modified by the
arbitrator consistent with the desire to simplify the conduct and minimize the
expense of the arbitration.
22.5. RULES OF LAW. Regardless of any practices of arbitration to the
contrary, the arbitrator will apply the rules of contract and other law of the
jurisdiction whose law applies to the arbitration so that the decision of the
arbitrator will be, as much as possible, the same as if the dispute had been
determined by a court of competent jurisdiction.
22.6. FINALITY AND FEES. Any award or decision by the American Arbitration
Association shall be final, binding and non-appealable except as to errors of
law or the failure of the arbitrator to adhere to the arbitration provisions
contained in this agreement. Each party to the arbitration shall pay its own
costs and counsel fees except as specifically provided otherwise in this
agreement.
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22.7. MEASURE OF DAMAGES. In any adverse action, the parties shall restrict
themselves to claims for compensatory damages and\or securities issued or to be
issued and no claims shall be made by any party or affiliate for lost profits,
punitive or multiple damages.
22.8. COVENANT NOT TO SUE. The parties covenant that under no conditions
will any party or any affiliate file any action against the other (except only
requests for injunctive or other equitable relief) in any forum other than
before the American Arbitration Association, and the parties agree that any such
action, if filed, shall be dismissed upon application and shall be referred for
arbitration hereunder with costs and attorney's fees to the prevailing party.
22.9. INTENTION. It is the intention of the parties and their affiliates
that all disputes of any nature between them, whenever arising, whether in
regard to this Agreement or any other matter, from whatever cause, based on
whatever law, rule or regulation, whether statutory or common law, and however
characterized, be decided by arbitration as provided herein and that no party or
affiliate be required to litigate in any other forum any disputes or other
matters except for requests for injunctive or equitable relief. This Agreement
shall be interpreted in conformance with this stated intent of the parties and
their affiliates.
22.10. SURVIVAL. The provisions for arbitration contained herein shall
survive the termination of this agreement for any reason.
23. FAILURE TO MAINTAIN BULLETIN BOARD LISTING. If as a result of the
merger described herein New Millennium shall fail to be deemed a successor
issuer and its securities shall not continue to be listed on the Bulletin Board,
the merger transaction shall be unwound and all shares issued to each party
shall be cancelled.
24. GENERAL PROVISIONS.
23.1. FURTHER ASSURANCES. From time to time, each party will execute such
additional instruments and take such actions as may be reasonably required to
carry out the intent and purposes of this agreement.
23.2. WAIVER. Any failure on the part of either party hereto to comply with
any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
23.3. BROKERS. Each party agrees to indemnify and hold harmless the other
party against any fee, loss or expense arising out of claims by brokers or
finders employed or alleged to have been employed by the indemnifying party.
23.4. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered in person or sent by
prepaid first-class certified mail, return receipt requested, or recognized
commercial courier service, as follows:
If to Scovel, to:
Scovel Corporation
128 April Rd.
Port Moody, B.C.
Canada V3H-3M5
If to New Millennium, to:
New Millennium Media International, Inc.
101 Philippe Parkway, Suite 305
Safety Harbor, Florida 34695
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24. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.
25. ASSIGNMENT. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns; provided,
however, that any assignment by either party of its rights under this agreement
without the written consent of the other party shall be void.
26. COUNTERPARTS. 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. Signatures sent by
facsimile transmission shall be deemed to be evidence of the original execution
thereof.
27. EXCHANGE AGENT AND CLOSING DATE. The Exchange Agent shall be Raymond
Rayder, Safety Harbor, Florida. The Closing shall take place upon the
fulfillment by each party of all the conditions of Closing required herein, but
not later than 15 days following execution of this Agreement unless extended by
mutual consent of the parties.
28. REVIEW OF AGREEMENT. Each party acknowledges that it has had time to
review this Agreement and, as desired, consult with counsel. In the
interpretation of this agreement, no adverse presumption shall be made against
any party on the basis that it has prepared, or participated in the preparation
of, this Agreement.
29 SCHEDULES. All schedules attached hereto, if any, shall be acknowledged
by each party by signature or initials thereon.
30. EFFECTIVE DATE. The effective date of this agreement shall be March 9,
2000.
IN WITNESS WHEREOF, the parties have executed this Agreement.
SCOVEL CORPORATION
__/s/___________________________________ This 9th day of March 2000
By: Gerald Ghini
President
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
___/s/__________________________________ This 9th day of March 2000
By: John Thatch,
President & CEO.
EXCHANGE AGENT
___/s/___________________________________ This 8th day of March 2000
By: Raymond Rayder, Esq.
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