SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of Earliest event reported): May 15, 1997
MOUNTAIN STATES RESOURCES CORPORATION
(Exact Name of Registrant as Specified in Charter)
Utah 0-8146 87-0280886
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
57 West 200 South, Suite 310, Salt Lake City, Utah 84101
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (801) 359-9309
1935 East Vine Street, Salt Lake City, Utah 84121
(Former Name or Former Address, if Changed Since Last Report)
Item 1. Changes in Control of Registrant
(b) On May 15, 1997, the Registrant entered into an Agreement and Plan of
Reorganization (the "Agreement") with Micro-Media Solutions, Inc., a Texas
corporation ("Micro-Media"). The Agreement provides for the issuance of
9,310,000 shares of the Registrant for all of the outstanding shares of Micro-
Media, such that upon closing the shareholders of Micro-Media would own
approximately 86.48% of the outstanding common stock of the Registrant. Micro-
Media would become a wholly owned subsidiary of the Registrant. In addition,
the current management of the Registrant would resign and persons selected by
Micro-Media would be appointed. It is also anticipated that Howard M. Oveson,
an officer and director of the Registrant, and a shareholder owning in excess of
5% of the outstanding shares of the Registrant, would sell all of its shares of
common stock of the Registrant owned by him to a party affiliated with Micro-
Media. Closing is scheduled to take place not later than June 16, 1997.
Item 5. Other Events
On May 15, 1997, the Board of Directors of the Registrant amended the
Bylaws of the Registrant to provide that the provisions of Chapter 6 of Title 61
of Utah Law (Sections 61-6-1 et seq. Utah Code Annotated) shall not apply to
control share acquisitions of shares of the Registrant.
Item 7. Exhibits
(c) The following exhibits are attached hereto and incorporated herein:
Exhibit No. Description
2.1 Agreement and Plan of Reorganization dated May 15, 1997
3(ii) Amendment to Bylaws
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mountain States Resources Corporation
Date: June 9, 1997 By /s/ Kip Eardley
Kip Eardley, President and Principal Financial
Officer
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement"), entered into
this15th day of May, 1997, by, between, and among Mountain States Resources
Corporation, a publicly held Utah corporation (hereinafter the "Purchaser"),
Micro-Media Solutions, Inc., a privately-held Texas corporation (hereinafter the
"Private Company"), and the shareholders of the Private Company whose names and
signatures are set forth upon the signature page of this Agreement (the "Share-
holders").
RECITALS:
WHEREAS, the Purchaser wishes to acquire, and the Shareholders are willing
to sell, all of the outstanding stock of the Private Company in exchange solely
for a part of the voting stock of the Purchaser whereby the Shareholders would
acquire a controlling interest of the Purchaser; and
WHEREAS, the parties hereto intend to qualify such transaction as a tax-
free exchange pursuant to Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended;
NOW, THEREFORE, based upon the stated premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Purchaser, the Private Company, and the
Shareholders approve and adopt this Agreement and Plan of Reorganization and
mutually covenant and agree with each other as follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the closing date the Shareholders shall transfer to the
Purchaser certificates for the number of shares of the common stock of the
Private Company described in Schedule "A," attached hereto and incorporated
herein, which in the aggregate shall represent all of the issued and outstanding
shares of the common stock of the Private Company.
1.2 In exchange for the transfer of the common stock of the Private
Company pursuant to subsection 1.1. hereof, the Purchaser shall on the closing
date, and contemporaneously with such transfer of the common stock of the
Private Company to it by the Shareholders, issue and deliver to the Shareholders
the number of shares of common stock of the Purchaser specified on Schedule "A"
hereof such that the Shareholders shall own approximately 86.48% of the
outstanding common stock of the Purchaser.
2. Representations and Warranties of the Shareholders. Each of the
Shareholders, for himself, herself, or itself, and not for any other
Shareholder, represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
2.1 Ownership of Stock.
a. Each of the Shareholders is the record and beneficial owner
and holder of the number of fully paid and nonassessable shares of the common
stock of the Private Company listed in Schedule "A" hereto as of the date hereof
and will continue to own such shares of the common stock of the Private Company
until the delivery thereof to the Purchaser on the closing date and all such
shares of common stock are or will be on the closing date owned free and clear
of all liens, encumbrances, charges and assessments of every nature and subject
to no restrictions with respect to transferability. Each of the Shareholders
currently has, and will have at closing, full power and authority to dispose,
assign, and transfer his, her, or its shares of the Private Company in
accordance with the terms hereof. Each of the Shareholders currently has, and
will have at closing, full power and authority to vote his, her, or its shares
of the Private Company, without restriction of any kind.
b. Except for this Agreement, there are no outstanding options,
contracts, calls, commitments, agreements or demands of any character relating
to the common stock of the Private Company listed in Schedule "A" and owned by
each of the Shareholders.
2.2 Accuracy of All Statements Made by the Shareholders. No
representation or warranty by the Shareholders in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by or on behalf of the Shareholders pursuant to this Agreement, nor any document
or certificate delivered to the Purchaser by the Shareholders pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a material
fact necessary to make the statement contained therein not misleading.
3. Representations and Warranties of the Private Company. The Private
Company represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
3.1 Organization and Authority. The Private Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Texas with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
3.2 Capitalization. As of the date of the closing, the Private
Company will have a total of no more than 1,000 shares of common stock issued
and outstanding. All of the shares will have been duly authorized and validly
issued and will be fully paid and nonassessable. There are no options,
warrants, conversion privileges, or other rights presently outstanding for the
purchase of any authorized but unissued stock of the Private Company.
3.3 Performance of This Agreement. The execution and performance of
this Agreement and the transfer of stock contemplated hereby have been
authorized by the board of directors of the Private Company.
3.4 Financials. The financial statements of the Private Company for
the period ended March 31, 1997, copies of which have been furnished to the
Purchaser, are true and correct in all material respects. The Private Company
is capable of providing the financial statements and pro forma financial
information required by Item 7 of Form 8-K promulgated by the Securities and
Exchange Commission.
3.5 Liabilities. There are no material liabilities of the Private
Company, whether accrued, absolute, contingent or otherwise, which arose or
relate to any transaction of the Private Company, its agents or servants
occurring prior to March 31, 1997, which are not disclosed by or reflected in
said financial statements. As of the date hereof, there are no known
circumstances, conditions, happenings, events or arrangements, contractual or
otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of the Purchaser.
3.6 Absence of Certain Changes or Events. Except as set forth in
this Agreement, since March 31, 1997, there has not been (i) any material
adverse change in the business, operations, properties, level of inventory,
assets, or condition of the Private Company, or (ii) any damage, destruction, or
loss to the Private Company (whether or not covered by insurance) materially and
adversely affecting the business, operations, properties, assets, or conditions
of the Private Company.
3.7 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving the Private Company or its subsidiaries, if
any, or their assets, properties, or business, nor does the Private Company or
its subsidiaries know, or have reasonable grounds to know, of any basis for any
such proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions. In addition, there are no
material proceedings existing, pending or reasonably contemplated to which any
officer, director, or affiliate of the Private Company or as to which and of
the Shareholders is a party adverse to the Private Company or any of its
subsidiaries or has a material interest adverse to the Private Company or any of
its subsidiaries.
3.8 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Private Company, and there are no unpaid taxes which are, or
could become a lien on the properties and assets of the Private Company, except
as provided for in the financial statements of the Private Company, or have been
incurred in the normal course of business of the Private Company since that
date. All tax returns of any kind required to be filed have been filed and the
taxes paid or accrued.
3.9 Business Plan. All of the information contained in the business
plan of the Private Company dated March 20, 1997, a copy of which has been
furnished to the Purchaser, is true and correct in all material respects and
does not contain any untrue statement of material fact or omit a material fact
necessary to make the statement contained therein not misleading.
3.10 Accuracy of All Statements Made by the Private Company. No
representation or warranty by the Private Company in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by or on behalf of the Private Company pursuant to this Agreement, nor any
document or certificate delivered to the Purchaser by the Private Company
pursuant to this Agreement or in connection with actions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits or
shall omit a material fact necessary to make the statement contained therein not
misleading.
4. Representations and Warranties of the Purchaser. The Purchaser
represents and warrants to the Private Company and to the Shareholders as set
forth below. These representations and warranties are made as an inducement for
the Private Company and the Shareholders to enter into this Agreement and, but
for the making of such representations and warranties and their accuracy, the
Private Company and the Shareholders would not be parties hereto.
4.1 Organization and Good Standing. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Utah with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
4.2 Capitalization. As of the date of the closing, the Purchaser
will have a total of no more than 1,454,733 shares of common stock issued and
outstanding, and no shares of preferred stock issued or outstanding. All of the
outstanding common shares will have been duly authorized and validly issued and
will be fully paid and nonassessable. Except for the Purchaser's obligations
hereunder with respect to the shares to be issued pursuant to subsection 1.2
hereof, there are no options, warrants, conversion privileges, or other rights
presently outstanding for the purchase of any authorized but unissued stock of
the Purchaser. As of the closing, the Articles of Incorporation, as amended, of
the Purchaser (the "Purchser Articles") and as currently in effect shall provide
among other things for two authorized classes of stock, namely fifty million
(50,000,000) shares of the common stock, par value $0.10, and ten million
(10,000,000) shares of preferred stock, par value $2.00 per share. The rights,
preferences, and privileges of the common stock shall be as set forth in the
Purchaser Articles.
4.3 Performance of This Agreement. The execution and performance of
this Agreement and the issuance of stock contemplated hereby have been
authorized by the board of directors of the Purchaser.
4.4 Financials. True copies of the financial statements of the
Purchaser consisting of the balance sheet as of the fiscal year ended March 31,
1996, and statements of income, cash flow and changes in stockholder's equity
for each of the fiscal years ended March 31, 1996 and 1995, have been delivered
by the Purchaser to the Private Company. These statements have been examined
and certified by Jones, Jensen & Company, Certified Public Accountant. In
addition, the Purchaser has furnished to the Private Company unaudited financial
statements for the period ended December 31, 1996. Said financial statements
are true and correct in all material respects and present an accurate and
complete disclosure of the financial condition of the Purchaser as of December
31, 1996, and the earnings for the periods covered, in accordance with generally
accepted accounting principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Purchaser,
whether accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Purchaser, its agents or servants which are not disclosed by
or reflected in said financial statements. As of the date hereof, there are no
known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may hereafter give rise to liabilities, except in the normal
course of business of the Purchaser.
4.6 Litigation. There are no legal, administrative or other
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, either threatened, pending, or
outstanding against or involving the Purchaser or its subsidiaries, if any, or
their assets, properties, or business, nor does the Purchaser or its
subsidiaries know, or have reasonable grounds to know, of any basis for any such
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions. In addition, there are no material
proceedings existing, pending or reasonably contemplated to which any officer,
director, or affiliate of the Purchaser is a party adverse to the Purchaser or
any of its subsidiaries or has a material interest adverse to the Purchaser or
any of its subsidiaries.
4.7 Taxes. All federal, state, foreign, county and local income,
profits, franchise, occupation, property, sales, use, gross receipts and other
taxes (including any interest or penalties relating thereto) and assessments
which are due and payable have been duly reported, fully paid and discharged as
reported by the Purchaser, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Purchaser, except as provided
for in the financial statements of the Purchaser, or have been incurred in the
normal course of business of the Purchaser since that date. All tax returns of
any kind required to be filed have been filed and the taxes paid or accrued.
4.8 Legality of Shares to be Issued. The shares of common stock of
the Purchaser to be issued by the Purchaser pursuant to this Agreement, when so
issued and delivered, will have been duly and validly authorized and issued by
the Purchaser and will be fully paid and nonassessable.
4.9 Accuracy of All Statements Made by the Purchaser. No
representation or warranty by the Purchaser in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be furnished
by the Purchaser pursuant to this Agreement, nor any document or certificate
delivered to the Private Company or the Shareholders pursuant to this Agreement
or in connection with actions contemplated hereby, contains or shall contain any
untrue statement of material fact or omits to state or shall omit to state a
material fact necessary to make the statement contained therein not misleading.
5. Covenants of the Parties.
5.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by the
Private Company, such entity shall deliver to the Purchaser copies of the
articles of incorporation, as amended, and the current bylaws of the Private
Company, and copies of the resolutions duly adopted by the board of directors of
the Private Company approving this Agreement and the transactions herein
contemplated.
b. Simultaneous with the execution of this Agreement by the
Purchaser, such entity shall deliver to the Private Company copies of the
articles of incorporation, as amended, and the current bylaws of the Purchaser,
and copies of the resolutions duly adopted by the board of directors of the
Purchaser approving this Agreement and the transactions herein contemplated.
5.2 Access to Information.
a. The Purchaser and its authorized representatives shall have
full access during normal business hours to all properties, books, records,
contracts, and documents of the Private Company, and the Private Company shall
furnish or cause to be furnished to the Purchaser and its authorized
representatives all information with respect to its affairs and business as the
Purchaser may reasonably request. The Purchaser shall hold, and shall cause its
representatives to hold confidential, all such information and documents, other
than information that (i) is in the public domain at the time of its disclosure
to the Purchaser; (ii) becomes part of the public domain after disclosure
through no fault of the Purchaser; (iii) is known to the Purchaser or any of its
officers or directors prior to disclosure; or (iv) is disclosed in accordance
with the written consent of the Private Company. In the event this Agreement is
terminated prior to closing, the Purchaser shall, upon the written request of
the Private Company, promptly return all copies of all documentation and
information provided by the Private Company hereunder.
b. The Private Company and its authorized representatives shall
have full access during normal business hours to all properties, books, records,
contracts, and documents of the Purchaser, and the Purchaser shall furnish or
cause to be furnished to the Private Company and its authorized representatives
all information with respect to its affairs and business the Private Company may
reasonably request. The Private Company shall hold, and shall cause its
representatives to hold confidential, all such information and documents, other
than information that (i) is in the public domain at the time of its disclosure
to the Private Company; (ii) becomes part of the public domain after disclosure
through no fault of the Private Company; (iii) is known to the Private Company
or any of its officers or directors prior to disclosure; or (iv) is disclosed in
accordance with the written consent of the Purchaser. In the event this
Agreement is terminated prior to closing, the Private Company shall, upon the
written request of the Purchaser, promptly return all copies of all
documentation and information provided by the Purchaser hereunder.
5.3 Actions Prior to Closing. From and after the date of this
Agreement and until the closing date:
a. The Purchaser and the Private Company shall each carry on
its business diligently and substantially in the same manner as heretofore, and
neither party shall make or institute any unusual or novel methods of purchase,
sale, management, accounting or operation.
b. Neither the Purchaser nor the Private Company shall enter
into any contract or commitment, or engage in any transaction not in the usual
and ordinary course of business and consistent with its business practices.
c. Neither the Purchaser nor the Private Company shall amend
its articles of incorporation or bylaws or make any changes in authorized or
issued capital stock, except as provided in this Agreement.
d. The Purchaser and the Private Company shall each use its
best efforts (without making any commitments on behalf of the company) to
preserve its business organization intact.
e. Neither the Purchaser nor the Private Company shall do any
act or omit to do any act, or permit any act or omission to act, which will
cause a material breach of any material contract, commitment, or obligation of
such party.
f. The Purchaser and the Private Company shall each duly comply
with all applicable laws as may be required for the valid and effective issuance
or transfer of stock contemplated by this Agreement.
g. Neither the Purchaser nor the Private Company shall sell or
dispose of any property or assets, except products sold in the ordinary course
of business.
h. The Purchaser and the Private Company shall each promptly
notify the other of any lawsuits, claims, proceedings, or investigations that
may be threatened, brought, asserted, or commenced against it, its officers or
directors involving in any way the business, properties, or assets of such
party.
5.4 Shareholders' Meeting. The Purchaser shall promptly submit this
Agreement and the transactions contemplated hereby for the approval of its
stockholders at a meeting of stockholders and, subject to the fiduciary duties
of the Board of directors of the Purchaser under applicable law, shall use its
best efforts to obtain stockholder approval and adoption of this Agreement and
the transactions contemplated hereby. In connection with such meeting of
stockholders, the Purchaser shall prepare a proxy or information statement to be
furnished to the shareholders of the Purchaser setting forth information about
this Agreement and the transactions contemplated hereby. The Private Party
shall promptly furnish to the Purchaser all information, and take such other
actions, as may reasonably be requested in connection with any action to be
taken by the Purchaser in connection with the immediately preceding sentence.
The Private Company shall have the right to review and provide comments to the
proxy or information statement prior to mailing to the shareholders of the
Purchaser.
5.5 No Covenant as to Tax or Accounting Consequences. It is
expressly understood and agreed that neither the Purchaser nor its officers or
agents has made any warranty or agreement, expressed or implied, as to the tax
or accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
5.6 Indemnification. The Private Company and the Shareholders,
severally and not jointly, shall indemnify Purchaser for any loss, cost,
expense, or other damage (including, without limitation, attorneys' fees and
expenses) suffered by Purchaser resulting from, arising out of, or incurred with
respect to the falsity or the breach of any representation, warranty, or
covenant made by the Private Company or the Shareholders herein, and any claims
arising from the operations of the Private Company prior to the closing date.
Purchaser shall indemnify and hold the Private Company and the Shareholders
harmless from and against any loss, cost, expense, or other damage (including,
without limitation, attorneys' fees and expenses) resulting from, arising out
of, or incurred with respect to, or alleged to result from, arise out of or have
been incurred with respect to, the falsity or the breach of any representation,
covenant, warranty, or agreement made by Purchaser herein, and any claims
arising from the operations of Purchaser prior to the closing date. The
indemnity agreement contained herein shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any party
and shall survive the consummation of the transactions contemplated by this
Agreement.
5.7 Publicity. The parties agree that no publicity, release, or
other public announcement concerning this Agreement or the transactions
contemplated by this Agreement shall be issued by any party hereto without the
advance approval of both the form and substance of the same by the other parties
and their counsel, which approval, in the case of any publicity, release, or
other public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
5.8 Expenses. Except as otherwise expressly provided herein, each
party to this Agreement shall bear its own respective expenses incurred in
connection with the negotiation and preparation of this Agreement, in the
consummation of the transactions contemplated hereby, and in connection with all
duties and obligations required to be performed by each of them under this
Agreement. The Private Company shall pay the legal expenses of the preparation
of this Agreement, which legal expenses shall not exceed $20,000.
5.9 Further Actions. Each of the parties hereto shall take all such
further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the closing date shall be subject
to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Private Company and the Shareholders in this Agreement or
given on their behalf hereunder shall be substantially accurate in all material
respects on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the closing
date.
6.2 Performance of Obligations and Covenants. The Private Company
and the Shareholders shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by them
prior to or at the closing.
6.3 Officer's Certificate. The Purchaser shall have been furnished
with a certificate (dated as of the closing date and in form and substance
reasonably satisfactory to the Purchaser), executed by an executive officer of
the Private Company, certifying to the fulfillment of the conditions specified
in subsections 6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Private Company to conduct its business or
the earning power thereof on the same basis as in the past.
6.6 Shareholders' Execution of Agreement. This Agreement shall have
been duly executed and delivered by each of the parties owning in the aggregate
all of the outstanding stock of the Private Company as of the closing date.
6.7 Accountant's Letter. At closing the Private Company shall
deliver to the Public Company a letter from an accountant reasonably acceptable
to the Public Company opining that the Private Company is capable of providing
the financial statements and pro forma financial information required to comply
with the provisions of Item 7 of Form 8-K promulgated by the Securities and
Exchange Commission.
7. Conditions Precedent to Obligations of the Private Company and the
Shareholders. Each and every obligation of the Private Company and the
Shareholders to be performed on the closing date shall be subject to the
satisfaction prior thereto of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties made by the Purchaser in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as of
the closing date with the same effect as though such representations and
warranties had been made or given on and as of the closing date.
7.2 Performance of Obligations and Covenants. The Purchaser shall
have performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the closing.
7.3 Officer's Certificate. The Private Company shall have been
furnished with a certificate (dated as of the closing date and in form and
substance reasonably satisfactory to the Private Company), executed by an
executive officer of the Purchaser, certifying to the fulfillment of the
conditions specified in subsections 7.1 and 7.2 hereof.
7.4 No Litigation or Proceedings. There shall be no litigation or
any proceeding by or before any governmental agency or instrumentality pending
or threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated by
this Agreement or which seeks substantial damages in respect thereof.
7.5 No Material Adverse Change. As of the closing date there shall
not have occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Purchaser to conduct its business.
7.6 No Liabilities of Purchaser. As of the closing date the
Purchaser shall have no liabilities which in the aggregate exceed $1,000.
8. Securities Law Provisions.
8.1 Restricted Securities. Each of the parties hereto, severally and
not jointly, represents that he, she, or it is aware that the shares issued or
transferred to him, her, or it will not have been registered pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), or any state securities
act, and thus will be restricted securities as defined in Rule 144 promulgated
by the Securities and Exchange Commission (the "SEC"). Therefore, under current
interpretations and applicable rules, he, she, or it will probably have to
retain such shares for a period of at least one year and at the expiration of
such one year period his, her, or its sales may be confined to brokerage
transactions of limited amounts requiring certain notification filings with the
SEC and such disposition may be available only if the issuer is current in its
filings with the SEC under the Securities Exchange Act of 1934, as amended, or
other public disclosure requirements.
8.2 Non-distributive Intent. Each of the parties hereto, severally
and not jointly, covenants and warrants that the shares received are acquired
for his, her, or its own account and not with the present view towards the
distribution thereof and he, she, or it will not dispose of such shares except
(i) pursuant to an effective registration statement under the 1933 Act, or (ii)
in any other transaction which, in the opinion of counsel acceptable to the
issuer, is exempt from registration under the 1933 Act, or the rules and
regulations of the SEC thereunder. In order to effectuate the covenants of this
subsection 8.2, an appropriate legend will be placed upon each of the
certificates of common stock of issued or transferred pursuant to this
Agreement, and stop transfer instructions shall be placed with the transfer
agent for the securities.
8.3 Evidence of Compliance with Private Offering Exemption. Each of
the parties hereto, severally and not jointly, hereby represents and warrants
that he, she, or it, either individually or together with his, her, or its
representative, has such knowledge and experience in business and financial
matters that he, she, or it is capable of evaluating the risks of this Agreement
and the transactions contemplated hereby, and that the financial capacity of
such party is of such proportion that the total cost of such person's commitment
in the shares would not be material when compared with his, her, or its total
financial capacity. Upon the written request of the issuer of the securities
issued or transferred pursuant to this Agreement, any party hereto shall provide
such issuer with evidence of compliance with the requirements of any federal or
state exemption from registration. The Purchaser and the Private Company shall
each file, with the assistance of the other and its respective legal counsel,
such notices, applications, reports, or other instruments as may be deemed by
each of them to be necessary or appropriate in an effort to document reliance on
such exemptions, unless an exemption requiring no filing is available in the
particular jurisdiction, all to the extent and in the manner as may be deemed by
such parties to be appropriate.
9. Change of Management. Upon and as a condition of closing this
Agreement:
9.1 Prior to closing the Purchaser will approve the appointment of
Jose Chavez, Mitchell Kettrick, and one other person designated by the Private
Company as directors of the Purchaser effective immediately following the
closing of this Agreement. Prior to closing the Private Company will furnish
material information of Jose Chavez and Mitchell Kettrick, as well as such third
person, as nominees to be appointed by the board of directors of the Purchaser.
Purchaser reserves the right to refuse to cause the nomination of any or all
such persons as directors of Purchaser if, after review of the foregoing
information concerning said persons, it is the opinion of Purchaser that the
election of such persons would not be in the best interests of Purchaser.
9.2 The Private Company reserves the right to terminate this
Agreement if nominees selected by it are not elected or appointed as set forth
above.
10. Closing.
10.1 Time and Place. The closing of this transaction ("closing")
shall take place at 501 Waller, Austin, Texas, 78702, at 10:00 a.m., the 2nd day
of June, 1997, or at such other time and place as the parties hereto shall agree
upon. Such date is referred to in this Agreement as the "closing date."
10.2 Documents To Be Delivered by the Private Company and the
Shareholders. At the closing the Private Company and the Shareholders shall
deliver to the Purchaser the following documents:
a. Certificates for the number of shares of common stock of the
Private Company in the manner and form required by subsection 1.1 hereof.
b. The certificate required pursuant to subsection 6.3 hereof.
c. The letter from the accountant pursuant to subsection 6.7
hereof.
d. Such other documents of transfer, certificates of authority,
and other documents as the Purchaser may reasonably request.
10.3 Documents To Be Delivered by the Purchaser. At the closing the
Purchaser shall deliver to the Private Company and the Shareholders the
following documents:
a. Certificates for the number of shares of common stock of the
Purchaser as determined in sub-section 1.2 hereof.
b. The certificate required pursuant to subsection 7.3 hereof.
c. Such other documents of transfer, certificates of authority,
and other documents as the Private Company and the Shareholders may reasonably
request.
11. Termination. This Agreement (i) may be terminated by the Purchaser or
the Private Company by notice to the other if, at any time prior to the closing
date any event shall have occurred or any state of facts shall exist that
renders any of the conditions to its or their obligations to consummate the
transactions contemplated by this Agreement incapable of fulfillment, or (ii)
shall be terminated automatically if closing shall not have occurred within
thirty (30) days following the date of this Agreement. Following termination of
this Agreement no party shall have liability to another party relating to such
termination, other than any liability resulting from the breach of this
Agreement by a party prior to the date of termination.
12. Miscellaneous.
12.1 Finders' Fees. The Private Company shall be responsible for the
payment of any finders' fees in connection with this transaction.
12.2 Notices. All communications provided for herein shall be in
writing and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
Purchaser: Kip Eardley
57 West 200 South
Suite 310
Salt Lake City, UT 84101
Private Company: Jose Chavez
501 Waller
Austin, TX 78702
Shareholders: Jose Chavez
501 Waller
Austin, TX 78702
12.3 Default. Should any party to this Agreement default in any of
the covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Utah
12.4 Assignment. This Agreement may not be assigned in whole or in
part by the parties hereto without the prior written consent of the other party
or parties, which consent shall not be unreasonably withheld.
12.5 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
12.6 Partial Invalidity. If any term, covenant, condition, or
provision of this Agreement or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Agreement or application of such term or provision to persons or
circumstances other than those as to which it is held to be invalid or
unenforceable shall not be affected thereby and each term, covenant, condition,
or provision of this Agreement shall be valid and shall be enforceable to the
fullest extent permitted by law.
12.7 Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all negotiations, representations, prior discussions, and
preliminary agreements between the parties hereto relating to the subject matter
of this Agreement.
12.8 Interpretation of Agreement. This Agreement shall be interpreted
and construed as if equally drafted by all parties hereto.
12.9 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall remain
in full force and effect until the obligations of such party hereunder have been
fully satisfied.
12.10 Further Action. The parties hereto agree to execute and
deliver such additional documents and to take such other and further action as
may be required to carry out fully the transactions contemplated herein.
12.11 Amendment. This Agreement or any provision hereof may not
be changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom enforcement
of the change, waiver, termination, or discharge is sought.
12.12 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms and
conditions of this Agreement, that each party has had the benefit of counsel, or
has been advised to obtain counsel, and that each party has freely agreed to be
bound by the terms and conditions of this Agreement.
12.13 Headings. The descriptive headings of the various sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
12.14 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement and
Plan of Reorganization as of the day and year first above written.
PURCHASER: Mountain States Resources Corporation
By /s/ Kip Eardley
Kip Eardley, President
SHAREHOLDERS: /s/ Jose Chavez
Jose Chavez, Individually
/s/ Andrew Ramirez
Andrew Ramirez, Individually
/s/ Mitchell Kettnick
Mitchell Kettrick, Individually
/s/ George Villalva
George Villalva, Individually
PRIVATE COMPANY: Micro-Media Solutions, Inc.
By /s/ Jose Chavez
Jose Chavez, President
SCHEDULE "A"
TO THE
AGREEMENT AND PLAN OF REORGANIZATION
NO. OF SHARES OF NO. OF SHARES OF
NAME OF THE PRIVATE COMPANY THE PURCHASER
SHAREHOLDER TO BE TRANSFERRED TO BE ISSUED
Jose Chavez 765 7,125,000
Andrew Ramirez 31 285,000
Mitchell Kettrick 153 1,425,000
George Villalva 51 475,000
TOTALS 1,000 9,310,000
CERTIFICATE OF THE SECRETARY
OF
MOUNTAIN STATES RESOURCES CORPORATION
The undersigned, being the duly appointed and acting Secretary of Mountain
States Resources Corporation, a Utah corporation (the "Company"), hereby
certifies that the following amendment to the Bylaws of the Company was adopted
on May 15, 1997, by unanimous consent of all of the directors of the Company:
RESOLVED, that the Bylaws of the Company be and hereby are amended to
provide that provisions of Chapter 6 of Title 61 of Utah Law (Sections 61-6-1 et
seq. Utah Code Annotated) shall not apply to control share acquisitions of
shares of the Company.
IN WITNESS WHEREOF, the undersigned has executed this document on the 15th
day of May 1997.
/s/ Howard M. Oveson
Howard M. Oveson, Secretary
