PLAN AND AGREEMENT OF MERGER
OF
BMB HOLDING, INC.
(A Delaware Corporation)
INTO
INTERUNION FINANCIAL CORPORATION
(A Delaware Corporation)
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called the "Agreement" or the
"Agreement of Merger"), by and between BMB HOLDING, INC., a corporation
organized and existing under the laws of the State of Delaware (hereinafter
sometimes referred to as "BMB") and INTERUNION FINANCIAL CORPORATION, a
corporation organized and existing under the laws of the State of Delaware
(hereinafter sometimes referred to as "InterUnion"). These two parties are
herein sometimes referred to collectively as the "Merging Corporations" and
InterUnion is designated as and shall be the surviving corporation.
WHEREAS a majority of the shareholders of each of BMB and InterUnion have
authorized their respective Boards of Directors to enter into this Agreement;
AND WHEREAS the Board of Directors of each of BMB and InterUnion, by the
execution of this Plan and Agreement of Merger, do approve this said Plan and
Agreement of Merger and do hereby declare its advisability; and
WHEREAS the Delaware General Corporation Law, Section 251, does authorize this
merger of domestic corporations pursuant to its terms and conditions.
NOW THEREFORE, the Merging Corporations have agreed, and do hereby agree, each
with the other in consideration of the premises and the mutual agreements,
provisions, covenants and grants herein contained and in accordance with the
laws of the State of Delaware that BMB and InterUnion be merged (the "Merger")
into a single corporation and that InterUnion shall be the continuing and
surviving corporation and do hereby agree upon and prescribe that the terms and
conditions of the Merger hereby agreed upon and the mode of carrying the same
into effect and the manner of converting the presently outstanding shares of BMB
into shares of InterUnion are and shall be hereinafter set forth:
ARTICLE I
INTERPRETATION
--------------
1.1 Definitions. In this Agreement, unless the context otherwise requires,
the terms set forth in Schedule 1 shall have the meanings set forth therein.
1.2 Entire Agreement. This Agreement together with the agreements and other
documents to be delivered pursuant to this Agreement, constitute the entire
agreement between the Parties pertaining to the Merger and supersedes all prior
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agreements, understandings, negotiations and discussions, whether oral or
written, including the letter of intent dated August, 7, 2003 (the "Letter of
Intent"), and there are no warranties, representations or other agreements
between the Parties in connection with the subject matter hereof except as
specifically set forth in this Agreement or any other agreement or document to
be delivered pursuant to this Agreement.
1.3 Extended Meaning. In this Agreement, words importing the singular
number include the plural and vice versa; words importing the masculine gender
include the feminine and neuter genders.
1.4 Headings. The division of this Agreement into articles, sections,
subsections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement.
1.5 References. References to an article, section, subsection, paragraph,
schedule or exhibit shall be construed as references to an article, section,
subsection, paragraph, schedule or exhibit to this Agreement, unless the context
otherwise requires.
1.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware.
1.7 Currency. Unless otherwise specified, the word "dollar", or the symbol
"$" refers to the lawful currency of the United States of America.
1.8 Schedules. The following is a list of schedules attached to and
incorporated into this Agreement by reference and deemed as part of this
Agreement.
SCHEDULE DESCRIPTION
-------- -----------
1 Definitions
2 BMB Holding, Inc. Financial Statements
3 InterUnion Financial Statements
4 InterUnion Management Information Circular
5 BMB Shareholdings
6 Agency Agreement
1.9 Recitals. The parties agree that the foregoing recitals are true and
correct and incorporated by this reference.
ARTICLE II
MANNER AND TERMS OF CONVERSION OF SHARES
----------------------------------------
2.1 Conversion and Exchange of Shares. On the date of the Merger, each and
every holder of certificates for common stock of BMB (the "BMB Shareholders")
shall surrender them to InterUnion or its duly appointed agent in the manner
that InterUnion shall reasonably require, it being mutually agreed upon that
such certificates of BMB shall total One Thousand (1,000) shares (the "BMB
Securities"). On receipt of the BMB Securities, InterUnion shall issue, an
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aggregate of One Hundred Forty Eight Million Five Hundred Seventy One Thousand
Four Hundred Twenty Nine shares (148,571,429) shares (the "InterUnion Shares")
of its common stock to the BMB Shareholders in accordance with Schedule "5"
hereof. Such aggregate number of InterUnion Shares are inclusive of 5,714,216
shares (at $0.35 per share) to be issued on Closing in respect of the conversion
of an aggregate of Two Million ($2,000,000) of debt held by two (2) BMB
Shareholders as more particularly described in Schedule "5" attached hereto. BMB
represents herein that the shares being surrendered pursuant to this Paragraph
2.1 represent all of the issued and outstanding stock of BMB.
2.2 Amendment to Certificate of Incorporation. The Parties hereby agree
that, after the completion of the Merger, InterUnion, as the surviving
corporation shall adopt the name "BMB Munai, Inc." or such other similar name as
may be agreed and approved by Governmental Authorities having jurisdiction, by
amendment to its Certificate of Incorporation.
2.3 Directors. The Parties hereby agree that, upon the completion of the
Merger, the shareholders of InterUnion by approval of this Merger do further
agree, approve of and elect the following named individuals to serve as the
board of directors as of the Closing of the Merger: Boris Cherdabayev, Chairman,
Georges Benarroch, Alexandre Agaian, Bakhytbek Basiseitov and Mirgali Kunayev.
All directors of InterUnion, with the exception of Georges Benarroch, shall
immediately resign upon completion of the Merger.
2.4 Nature of Issued Shares. BMB and the BMB Shareholders acknowledge that
the common shares issued by InterUnion pursuant to this Agreement are being
issued pursuant to a claim of one or more exemptions from registration and
prospectus requirements, as contained within U.S. federal securities laws. All
shares as issued by InterUnion shall bear the following restrictive legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"ACT"). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT WITH RESPECT TO SUCH SHARES, OR AN
OPINION OF THE ISSUER'S COUNSEL TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED UNDER THE ACT."
It is further understood that InterUnion, as issuer, shall issue such stop
transfer instructions to its transfer agent as it may deem necessary.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BMB SHAREHOLDERS
------------------------------------------------------
3.1 Representations and Warranties of the BMB Shareholders. The BMB
Shareholders represent and warrant to InterUnion as follows and acknowledge that
InterUnion is relying on these representations and warranties in connection with
the completion of the Merger:
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(a) Capacity to own BMB Securities - The BMB Shareholders have all
necessary power, authority and capacity to own the BMB Securities.
(b) Capacity to Enter Agreement - The BMB Shareholders have full power,
right and authority to enter into this Agreement and to perform their
obligations under it and to authorize BMB to enter into this Agreement
and to perform its obligations under it.
(c) Binding Obligation - This Agreement constitutes a valid and binding
obligation of the BMB Shareholders, which BMB Shareholders have
approved and authorized the entering into of this Agreement.
(d) Absence of Conflict - The BMB Shareholders are not a party to, bound or
affected by any agreement which would be violated, breached or
terminated by, or which would result in creation or imposition of any
Encumbrance upon any of the BMB Securities, as a consequence of the
execution and delivery of this Agreement or the consummation of the
transactions contemplated in this Agreement.
(e) Title to BMB Securities - The BMB Shareholders are the legal owners of
the BMB Securities with good and marketable title, free and clear of
any Encumbrances.
(f) No Bankruptcy - No proceedings have been taken or authorized by any BMB
Shareholders or by any other person in respect of the bankruptcy,
insolvency, liquidation, dissolution or winding up as applicable, of
any BMB Shareholders.
(g) Disclosure - The representations and warranties of the BMB Shareholders
in this Agreement are true, correct and do not contain any untrue or
misleading statement of a material fact or omit to state a material
fact necessary to make such representations and warranties not
misleading to InterUnion.
(h) Non-Violation - The entering into of this Agreement and the
consummation of transactions contemplated herein do not and will not
conflict with, or result in a breach of, or constitute a default under
the terms or conditions of any constating document of BMB, any by-laws,
any court or administrative order or process, any agreement or
instrument to which BMB or the BMB Shareholders are party or by which
it is bound.
ARTICLE IV
REPRESENTATION AND WARRANTIES OF BMB
------------------------------------
4.1 Representations and Warranties of BMB. BMB represents and warrants to
InterUnion as follows and acknowledges that InterUnion is relying on these
representations and warranties in connection with the Merger:
(a) Due Incorporation - BMB is a corporation duly incorporated and validly
existing under the laws of the State of Delaware.
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(b) Capacity to Enter Agreement - BMB has full corporate power and
authority to enter into this Agreement and to perform its obligations
under it.
(c) Due Authorization - The executing and delivery of this Agreement and
the consummation of the transactions contemplated under it have been
duly authorized by all necessary corporate action on the part of BMB.
(d) Binding Obligation - This Agreement has been duly executed and
delivered by BMB and constitutes a valid and binding obligation of it.
(e) Absence of Conflict - Other than those disclosed in the financial
statements of BMB, BMB is not a party to, bound or affected by any
agreement which would be violated, breached or terminated by, or which
would result in the creation or imposition of any Encumbrance upon any
of the BMB Securities as a consequence of the execution and delivery of
this Agreement or the consummation of the transactions contemplated in
this Agreement.
(f) Regulatory Approvals - Except for Shareholder Approval and Regulatory
Approval, no governmental or regulatory authorization, approval, order,
consent or filing is required on the part of BMB, in connection with
the execution, delivery and performance of this Agreement and the
performance of BMB's obligations under this Agreement.
(g) No Bankruptcy - No proceedings have been taken, are pending or
authorized by BMB or by any other person in respect of the bankruptcy,
insolvency, liquidation, dissolution or winding up of BMB.
(h) Authorized and Issued Capital - The authorized capital stock of BMB
consists of One Thousand (1,000) common shares, of which One Thousand
(1,000) of such shares are issued and outstanding as fully paid and
non-assessable shares of BMB. There are no warrants, options or other
rights of any kind in existence, authorized or agreed to, which could
result in any further shares or other securities of BMB being allotted
or issued or becoming outstanding.
(i) Minute Books - The minute books of BMB contain accurate and complete
minutes of all meetings and resolutions of the directors and the
shareholders of BMB held or passed by signature in writing,
respectively, since the date of its incorporation. All such meetings
have been duly called and held. The share and warrant certificate books
and share registers of BMB are complete and accurate.
(j) BMB's Capacity and Power - BMB has full corporate right, power and
authority to own or lease its assets as now owned or leased and to
carry on the BMB Business.
(k) BMB Financial Statements - BMB Financial Statements attached hereto as
Schedule 2 have been prepared in accordance with US generally accepted
accounting principles applied on a consistent basis throughout the
periods indicated, and fairly and accurately present, subject to
immaterial variation, the financial position, assets and liabilities
(whether absolute, contingent, accrued or otherwise) of BMB on the
dates thereof and the financial results of BMB for the periods referred
to in the BMB Financial Statements.
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(l) Subsidiary -- Emir Oil, LLC, a company existing under the laws of
Kazakhstan, is a 70%-owned subsidiary of BMB.
(m) No Guarantees etc. -- Other than as disclosed in the financial
statements of BMB, BMB is not a party to or bound by any agreement of
guarantee, indemnification, assumption or endorsement or any like
commitment of the obligations, liabilities (contingent or otherwise) or
indebtedness of any Person.
(n) Records
(i) The BMB Records are true and correct and present fairly and
disclose in all material respects the actual results of the BMB
Business.
(ii) To the best of the knowledge of the Board of Directors of BMB,
all material financial transactions of BMB have been accurately
recorded in the BMB Records. The BMB Records (of a financial
nature) have been prepared in accordance with US generally
accepted accounting principles consistently applied.
(iii) The files, documentation and information in writing provided by
BMB to InterUnion in connection with the negotiation and
completion of the transactions contemplated in this Agreement are
true and correct in all material respects.
(o) Litigation - There are no judgments, decrees, injunctions, ruling or
orders of any court, Governmental Authority or arbitration panel, or
any actions, suits, or proceedings, (whether or not on behalf of BMB)
and, to the best of the knowledge of the Board of Directors of BMB, are
pending or threatened or involving BMB, or the BMB Business which may
materially adversely affect the BMB Business or BMB's assets.
(p) Securities Documents - The InterUnion Information Circular appended
hereto as Schedule 4 (to the extent that it sets forth facts or
information about BMB, which facts or information was provided or
reviewed by BMB) does not contain, to the best of the knowledge and
belief of the Board of Directors of BMB, any untrue statement of a
material fact or omit to state a material fact that is required to be
stated or omit to state a material fact that is necessary to be stated
in order to make a statement contained in those documents not
misleading in light of the circumstances in which it was made.
(q) Disclosure - To the best of the knowledge of the Board of Directors of
BMB, the representation and warranties of the BMB Shareholders in this
Agreement are true, complete and correct and do not contain any untrue
or misleading statement of a material fact.
(r) Non-Violation - The entering into of this Agreement and the
consummation of transactions contemplated herein do not and will not
conflict with, or result in a breach of, or constitute a default under
the terms or conditions of any constating document of BMB, any by-laws,
any court or administrative order or process, any agreement or
instrument to which BMB is party or by which it is bound.
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(s) Conversion of Debt - It is acknowledged that the issuance to the BMB
shareholders of an aggregate of 148,571,429 shares as specified in
ARTICLE II, Paragraph 2.1, represents, in part, the consideration paid
to certain shareholders of BMB who, prior to this Closing, were owed
Two Million ($2,000,000) Dollars as a result of loans to BMB and who
have agreed to accept shares in InterUnion as full payment of the
loans.
ARTICLE V
EFFECT OF MERGER
----------------
5.1 Operating Effect of Merger. When this Merger is completed the Merging
Corporations shall be a single corporation to be known as BMB Munai, Inc. or a
similar name if that name shall not be available under Delaware law. The
separate existence of BMB HOLDING, INC. shall cease.
5.2 Rights and Privileges. InterUnion shall thereupon and thereafter
possess all rights, privileges, immunities and franchises of a public as well as
a private nature of each of the Merging Corporations and all property, real,
personal, tangible and intangible and all debt due, if any, on whatever account,
and all and every other interest of and belonging to or due to each of the
merging corporations shall be taken and deemed to be transferred to and vested
in InterUnion without further act or deed.
5.3 Liabilities and Obligations. InterUnion shall thenceforth be
responsible and liable for all of the liabilities and obligations of each of the
Merging Corporations and any claim existing or action or proceeding pending by
or against either of the Merging Corporations may be prosecuted to judgment as
if such Merger had not taken place, or InterUnion may be substituted in its
place. Neither the rights of creditors nor any liens upon the property of either
of the merging corporations shall be impaired by reason of the Merger.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF INTERUNION
--------------------------------------------
6.1 Representations and Warranties of InterUnion. InterUnion hereby
represents and warrants to BMB and to the BMB Shareholders as follows and
acknowledges that BMB, and the BMB Shareholders are relying on those
representations and warranties in connection with the Merger:
(a) Due Incorporation - InterUnion is a corporation duly incorporated and
validly existing under the federal laws of the State of Delaware
(b) Capacity to Enter Agreement - InterUnion has full power, right and
authority to enter into this Agreement and to perform the obligations
under it.
(c) Due Corporate Authorization - The execution and delivery of this
Agreement and the consummation of the transactions contemplated under
it have been duly authorized by all necessary corporate action on the
part of InterUnion.
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(d) Binding Obligation - This Agreement has been duly executed and
delivered by InterUnion and constitutes a valid and binding obligation
of InterUnion.
(e) Absence of Conflict - InterUnion is not a party to, bound or affected
by or subject to any agreement which would be violated, breached or
terminated by, or which would result in the creation or imposition of
any Encumbrance upon any of the InterUnion Shares as a consequence of,
the execution and delivery of this Agreement or the consummation of the
transactions contemplated in this Agreement.
(f) Approval - Except for Shareholders Approval, no governmental
authorization approval, order, consent or filing is required on the
part of InterUnion, in connection with the execution, delivery and
performance of this Agreement and the performance of InterUnion's
obligations under this Agreement.
(g) No Bankruptcy - No proceedings have been taken, are pending or
authorized by InterUnion or by any other person in respect of the
bankruptcy, insolvency, liquidation, dissolution or winding up of
InterUnion.
(h) Authorized and Issued Capital - On the date of execution of this
Agreement, the authorized capital of InterUnion consists of 500,000,000
common voting shares, of which 4,916,549 common shares are issued and
outstanding. In addition, InterUnion is authorized to issue 1,500,000
shares of Class A preferred stock, 1,000 shares of Class B preferred
stock and 1,000 shares of Class C preferred stock, of which no
preferred shares of any class are issued or outstanding. After issuing
an aggregate of 148,571,429 common shares to BMB Shareholders as
provided herein, and after issuing a further 500,000 common shares to
the shareholders of InterUnion as a stock dividend, the InterUnion
shares issued and outstanding at Closing shall total 153,987,987 common
shares, all of which such shares shall be fully paid and
non-assessable. There shall also be 3,428,571 InterUnion options
outstanding. There shall also be an InterUnion stock purchase warrant
issued in favor of Credifinance Securities Limited which is to receive
a further ten per cent (10%) of the number of InterUnion shares sold in
the financing undertaken by it and on behalf of and for the benefit of
InterUnion, at the issue price of the shares sold, such warrant to
exist for an eighteen (18) month period from the date of November 25,
2003. There are no other rights of any kind in existence, authorized or
agreed to which could result in any further shares or the securities of
InterUnion being allotted or issued or becoming outstanding.
(i) Minute Books - Minute books of InterUnion contain accurate and complete
minutes of all meetings and resolutions of the directors and the
shareholders of InterUnion held or passed by signature in writing,
respectively, since the date of its incorporation. All such meetings
have been duly called and held.
(j) Subsidiary - InterUnion owns 100% of InterUnion Merchant Group, a
company incorporated in the British Virgin Islands. InterUnion has no
other business affiliations with other entities of any kind whatsoever.
(k) Reporting Issuer - InterUnion is a reporting issuer in the United
States and is not in default of any reporting requirement.
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(i) InterUnion has timely filed (taking into account all available
extensions) all reports, forms and other filings required to be
filed by applicable Law with the SEC and other applicable federal
and State agencies ("Filing(s)"), and have paid all amounts due
in respect of the above filings, if any; all such filings are
true, correct and complete in all material respects and
accurately set forth all items to the extent required to be
reflected or included in such Filings by applicable Law.
(ii) as of the date hereof, InterUnion has not executed any
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
Filings.
(iii) no examination or audit of any Filing filed by InterUnion
pursuant to the Laws of any jurisdiction has been made by any
appropriate Governmental Authority during the preceding three
years or is in progress, and InterUnion has not received any
notice (official or unofficial) of any such examination, audit,
investigation or other proceeding.
(iv) InterUnion has maintained the books and records required to be
maintained pursuant to the Laws of the applicable jurisdiction in
reference to all Filings.
(1) Compliance with Laws - InterUnion is in compliance with all applicable
laws, rules, regulations, notices, approvals and orders. For greater
certainty, InterUnion confirms that it has at present, no active
business undertakings.
(m) Absence of Material Changes - Since March 31, 2003 and to the date of
execution of this Agreement, and except as set out herein:
(i) no changes have been made in the accounting methods, practices,
or policies followed by InterUnion;
(ii) InterUnion has not increased, incurred or guaranteed any debt,
obligation, or liability (whether absolute or contingent and
whether or not currently due and payable);
(iii) there has been no damage, destruction or loss, labor trouble, or
other event, development or condition of any character (whether
or not covered by insurance) which adversely affects, or, may
adversely affect, the properties or prospects of InterUnion; and
(iv) InterUnion has not paid any amount or dividend, or otherwise made
any distribution or the payment of any kind or nature whatsoever
to any non-arm's length Person.
(v) InterUnion Liabilities - As of the Closing, InterUnion shall have
no outstanding liabilities, other than those incurred in the
normal course of business and except as set out herein and in the
financial statements of InterUnion.
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(n) InterUnion Financial Statement - The InterUnion Financial Statements
attached hereto as Schedule 3:
(i) have been prepared in accordance with U.S. generally accepted
accounting principles; and
(ii) fairly and accurately present the financial position, assets and
liabilities (whether absolute, contingent, accrued or otherwise)
of InterUnion on the dates thereof the financial results of
InterUnion for the periods referred to in the InterUnion
Financial Statements, which financial position, assets and
liabilities, shall not have materially changed other than as so
contemplated in this agreement.
(o) No Guarantees etc. - InterUnion is not a party to or bound by any
agreement of guarantee, indemnification, assumption or endorsement or
any like commitment of the obligations, liabilities (contingent or
otherwise) or indebtedness of any Person.
(p) Title to and Condition of Assets - As of the date hereof, InterUnion
has no tangible assets of any kind.
(q) Employees - As of the Closing, InterUnion does not employ or engage any
employees.
(r) Litigation - There are no judgments, decrees, injunctions, ruling or
orders of any court, Governmental Authority or arbitration, or any
actions, suits, grievances or proceedings (whether or not on behalf of
InterUnion) pending or threatened or involving InterUnion.
(s) Disclosure - The representations and warranties of InterUnion in this
Agreement are true, complete and correct and do not contain any untrue
or misleading statement of a material fact or omit to state a material
fact necessary to make such representations and warranties not
misleading to the BMB Shareholders. There are no liabilities,
contingent or otherwise, or indemnity responsibilities of InterUnion
that are not disclosed herein.
(t) Environmental - To the knowledge and belief of the Board of Directors
of InterUnion all premises used by InterUnion to carry on its business
comply and have at all times complied with, and InterUnion is not in
violation of and has not violated, in connection with its ownership of
such property or conduct of its business, any applicable laws,
regulations or orders of any governmental authorities relating to
environmental matters;
(u) Tax Liabilities - InterUnion has no outstanding tax liabilities
presently due and owing or expected to come due and owing, to any
taxation authority in the USA or elsewhere.
(i) InterUnion has timely filed (taking into account all available
extensions) all Tax returns required to be filed by applicable
Law and have paid all amounts due in respect of Taxes (whether or
not assessed or actually shown on such Tax returns); all such Tax
returns are true, correct and complete in all material respects
and accurately set forth all items to the extent required to be
reflected or included in such Tax returns by applicable Law;
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(ii) as of the date hereof, InterUnion has not executed any
outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any
material Taxes or Tax returns; no requests for any such
agreements are pending; and the period during which any
assessment may be made by any appropriate Governmental Authority
has expired without waiver or extension of any such period for
each such authority;
(iii) no claim has ever been made by any authority in a jurisdiction
where InterUnion does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction; and
(iv) as of the date hereof, there are no Liens with respect to any
material Taxes upon any of the assets and properties of the
Company.
(b) No examination or audit of income and other Tax Returns filed by
InterUnion pursuant to the Laws of any Tax authority has been
made by any appropriate Governmental Authority during the
preceding three years or is in progress, and InterUnion has not
received any notice (official or unofficial) of any Tax
examination, audit, investigation or other proceeding for the
assessment or proposed assessment or collection of any Taxes.
Except for Taxes payable with Tax Returns not yet due and filed,
there are no grounds for any further Tax Liability, beyond
amounts accrued with respect to the years that have not been
examined or audited.
(c) InterUnion has maintained the books and records required to be
maintained pursuant to the Laws of the states and localities
wherein it is required to file Tax Returns and other reports
relating to Taxes.
(d) BMB has been provided with true and correct copies of the
original and amended tax returns of the Company for all the years
of its existence.
(u) Agency Agreement - The Agency Agreement in the form attached hereto as
Schedule "6", when executed, will not result in InterUnion being in
breach of any representations and warranties contained thereunder.
ARTICLE VII
NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
-----------------------------------------------------
7.1 Subject to section 7.2, all representations and warranties contained in
this Agreement on the part of each of the parties shall survive the Closing for
a period of three (3) years from the Closing Date, after which time, if no claim
shall have been made against a Party with respect to any incorrectness or in
breach of any representation or warranty, that Party shall have no further
liability under this Agreement with respect to the representation or warranty.
7.2 The representations, warranties, covenants and indemnities of the
Parties relating to the tax liability of InterUnion and BMB shall:
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(a) unless resulting from any misrepresentation made or fraud committed in
filing a return or supplying information for the purposes of the
federal Internal Revenue Code ("IRC"), applicable state corporation tax
legislation or any other legislation imposing tax on InterUnion and
BMB, terminate at the expiration of the last of the limitation periods
contained in the IRC, applicable state corporation tax legislation or
any other legislation imposing tax on InterUnion and BMB, subsequent to
the expiration of which an assessment, reassessment, or other form of
recognized document assessing liability for its year ended immediately
prior to the Closing Date; and
(b) if based upon misrepresentation made or fraud committed in filing a
return or in supplying information for the purpose of the IRC,
applicable state corporation tax legislation or any other legislation
imposing tax on InterUnion and BMB, survive without limit as to time.
7.3 All statements contained in any certificate or any instrument delivered
by or on behalf of a Party pursuant to or in connection with the transactions
contemplated by this Agreement shall be deemed to be made by such Party under
this Agreement.
ARTICLE VIII
COVENANTS
---------
8.1 Conduct of BMB Business Prior to Closing. During the Interim Period,
BMB shall:
(a) Conduct Business in Ordinary Course - except as otherwise contemplated
or permitted by this Agreement, conduct the BMB Business diligently and
prudently, and in the normal course;
(b) Continue Insurance - continue in full force all existing insurance
policies;
(c) Comply with Laws - comply with all laws applicable to the BMB Business;
(d) Maintain Permits - apply for, maintain in good standing and renew all
Permits, licenses, and registrations necessary to enable it to carry on
the BMB Business as now conducted;
(e) Issue Securities, etc. - not issue any securities, including debt,
except in the ordinary course of business, as contemplated herein or
with the prior written consent of InterUnion;
(f) Dividends - not declare or pay any dividends or distribute any of its
properties or assets to shareholders or any non-arm's length Person
without the prior written consent of InterUnion;
(g) Agreements - not enter into any contracts, except in the ordinary
course of business or with the prior written consent of InterUnion;
(h) Articles and Bylaws - not alter or amend its articles or bylaws, except
as contemplated herein or with the prior written consent of InterUnion;
(i) Business Activity - not engage in any business enterprise or
other activity different from its current activities to date
except those specifically expressed herein or with the prior
written consent of InterUnion;
8.2 Conduct of InterUnion Prior to Closing - During the Interim Period,
InterUnion shall:
(a) Conduct Business in Ordinary Course - except as otherwise contemplated
or permitted by this Agreement, conduct its business diligently and
prudently, and in the normal course;
(b) Continue Insurance - continue in full force all existing insurance
policies;
(c) Comply with Laws - comply with all laws applicable to its business;
(d) Maintain Permits - apply for, maintain in good standing and renew all
permits, licenses, and registrations necessary to enable it to carry on
its business as now conducted;
(e) Issue Securities, etc. - not issue any securities, including debt,
except in the ordinary course of business, as contemplated herein or
with the prior written consent of BMB;
(f) Dividends - not declare or pay any dividends or distribute any of its
properties or assets to shareholders or any non-arm's length Person
other than as provided for herein without the prior written consent of
BMB;
(g) Agreements - not enter into any contracts, except in the ordinary
course of business or with the prior written consent of BMB;
(h) Articles and Bylaws - not alter or amend its articles or bylaws, except
as contemplated herein or with the prior written consent of BMB;
(i) Business Activity - not engage in any business enterprise or other
activity different from its current activities to date except those
specifically expressed herein or with the prior written consent of BMB.
(j) Minimum Subscriptions at Closing - Credifinance Securities Limited,
acting on behalf of InterUnion will have secured in completed form at
least $3,000,000 held in escrow pursuant to subscriptions for common
stock of InterUnion.
8.3 Access for Investigation.
(a) InterUnion and BMB shall permit the other Party and its Authorized
Representatives, until the Closing Date, to have reasonable access
during normal business hours to their respective premises and their
respective Records to enable confirmation of the accuracy of the
Records and the matters represented and warranted in Articles III, IV,
and VI.
13
Until the Closing Date and, in the event the termination of this
Agreement without the completion of the transactions contemplated
hereby, each of the Parties shall thereafter, subject to subsection
8.3(b), use its best efforts to keep confidential and not use for its
own purpose (other than as contemplated by this Agreement) any
information obtained from any other Party with respect to the other
Party's affairs. If this Agreement is terminated, all documents,
working papers and other written material obtained by the Party from
the other party in connection with this Agreement and not previously
made public (and all copies thereof) shall be returned to the other
Party promptly after such termination.
(b) The obligation of each of the Parties under subsection 8.3(a) to keep
confidential and not use any information shall not apply to information
which:
(i) becomes generally available to the public other than as a result
of a disclosure by the Party or its representatives in violation
of this Agreement;
(ii) was available to the Party on a non-confidential basis prior to
its disclosure by the other party or their representatives;
(iii) becomes available to the party on a non-confidential basis from a
source other than the other Party or its representatives,
provided that such source is not bound by a confidentiality
agreement with the other Party; or
(iv) the Party is required by law to disclose.
8.4 Closing Documents. The Ancillary Agreements and the Conveyance
Documents shall be executed and delivered by the Parties thereto at the Closing
Time.
8.5 Corporate Proceedings. On or before the Closing Date, each of the
Merging Corporations shall provide to the other certified copies of all
necessary proceedings and resolutions, corporate or otherwise, and all other
necessary actions, corporate or otherwise, authorizing the execution and
delivery of this Agreement and the matters contemplated in it.
8.6 Actions to Satisfy Closing Conditions. Each Party shall take all such
actions as are within its power to control, and shall use its best efforts to
cause other actions to be taken which are not within its power to control, so as
to ensure compliance with any conditions set forth in this Agreement that are
for the benefit of itself or any other Party.
8.7 InterUnion Corporate Proceedings. InterUnion shall have obtained or
effected prior to the Closing:
(i) Shareholder Approval; and
(ii) Amendment of the Certificate of Incorporation of InterUnion to
increase its authorized capital to common shares to 500,000,000,
subsequent to Closing.
14
ARTICLE IX
CONDITIONS OF CLOSING
---------------------
9.1 Conditions for InterUnion's Benefit. InterUnion shall not be obliged to
complete the Merger unless, on the Closing Date, each of the following
conditions shall have been satisfied:
(a) Accuracy of Representations -- The representations and warranties of
the BMB Shareholders and of BMB, as set forth in Articles III and IV,
respectively, shall be true and correct at the Closing Date, except as
those representations and warranties may be affected by the occurrence
of events or transactions expressly contemplated and permitted by this
Agreement, including, without limitation, those in the ordinary course
of business, and InterUnion shall have received a certificate from the
BMB Shareholders, and BMB confirming the foregoing.
(b) Performance of Obligations - BMB and the BMB Shareholders shall have
performed all of the obligations hereunder to be performed by them at
or prior to the Closing. BMB and the BMB Shareholders shall not be in
breach of any agreement on their part contained herein;
(c) Deliveries - BMB and the BMB Shareholders shall have delivered or
caused to be delivered to BMB the Conveyance Documents, and shall
deliver up to InterUnion possession of the BMB Securities, free and
clear of any Encumbrances:
(d) Shareholder Approval and Regulatory Approval - On or before Closing
Time, all items listed in the sub-articles of section 8.7 herein shall
have been approved by the shareholders of InterUnion;
(e) Completion of Investigations - The investigations and assessments
contemplated in section 8.3 shall have been completed and InterUnion
shall be satisfied with the result of such investigations and
assessments including, without limitation, the accuracy of the BMB
Records and Subsidiary Records and matters represented and warranted in
Articles III and IV;
(f) Consents, Authorizations and Registrations - All consents, approvals,
orders and authorizations of, from or notifications to any persons or
Governmental Authorities required in connection with the completion of
any of the transactions contemplated by this Agreement, the execution
of this Agreement, the Closing or the performance of any of the terms
and conditions of this Agreement shall have been obtained on or before
the Closing Date.
There shall be no injunction or order issued preventing, and no pending
or threatened claim, action, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Governmental
Authority or Person for the purpose of enjoining or preventing the
consummation of this Agreement, or otherwise claiming that this
Agreement or the consummation thereof is improper or would give rise to
proceedings under any statute or rule of law;
15
(g) No Loss - During the Interim Period, there shall have been no material
damage to the assets of BMB or the BMB Business by fire or other peril,
whether or not such damage is covered by insurance; and
(h) No Material Changes - There shall have been no material adverse changes
in the BMB Business, assets or financial condition of BMB during the
Interim Period. For the purposes of this subsection, the term "material
adverse change" shall mean any change in the assets, liabilities or
financial condition of BMB or the BMB Business that may involve
material reduction, damage, risk to or destruction of the assets,
whether or not the change is covered by insurance.
(i) Acknowledgment re Conversion of Certain Debt - Each of BMB Munai, LLC
and Alexander Agaian, both of whom are BMB Shareholders, shall have
agreed to convert $1,800,000 and $200,000, respectively, in
indebtedness owed to them by BMB for InterUnion Shares, as provided for
in this Agreement. In addition, such parties shall be required to
deliver, on or before Closing, a Release, satisfactory to InterUnion
confirming such debt has been released.
If any one or more of the foregoing conditions shall not have been fulfilled on
or before the Closing Date, InterUnion may terminate this Agreement by notice in
writing to the other Parties in which event InterUnion shall be released from
all obligations under this Agreement and (InterUnion can show that the condition
relied upon could reasonably have been performed by the other parties) the other
Parties shall also be released from all obligations hereunder; provided,
however, that InterUnion shall be entitled to waive compliance with any one or
more of such conditions in whole or in part if it shall see fit to do so,
without prejudice to its rights of termination in the event of the
non-fulfillment of any other condition in whole or in part.
9.2 Conditions for the Benefit of BMB and the BMB Shareholders. BMB and the
BMB Shareholders shall not be obliged to complete the Merger unless, on the
Closing Date, each of the following conditions shall have been satisfied:
(a) Accuracy of Representations - The representations and warranties of
InterUnion set forth in Article VI shall be true and correct at the
Closing Date, except as those representations and warranties may be
affected by the occurrence of events or transactions expressly
contemplated and permitted by this Agreement, and the BMB Shareholders
shall have received a certificate from InterUnion confirming the
foregoing.
(b) Performance of Obligations - InterUnion shall have performed all of the
obligations hereunder to be performed by it at or prior to the Closing
and InterUnion shall not be in breach of any agreement on its part
contained herein.
(c) Deliveries - InterUnion shall have delivered or caused to be delivered
to the BMB Shareholders, or as they may direct in writing, possession
of an aggregate 148,571,429 InterUnion Shares, free and clear of any
Encumbrances.
(d) Shareholders Approval - The Shareholders Approval, the approval of this
Agreement and the transactions contemplated herein by the BMB
Shareholders and the matters contemplated in section 8.7 shall have
been obtained, completed or given, as the case may be, on or before the
Closing Time.
16
(e) Completion of Investigations - Based in the documents provided by
InterUnion, the investigations and assessments contemplated in section
8.3 shall have been completed and BMB and the BMB Shareholders shall be
satisfied with the results of such investigations and assessments
including, without limitation, the accuracy of the InterUnion Records
and matters represented and warranted in Article VI.
(f) Consents, Authorizations and Registrations - All consents, approvals,
orders and authorizations of, from or notifications to any Persons or
Governmental Authorities required in connection with the completion of
any of the transactions contemplated by this Agreement, the execution
of this Agreement, the Closing or the performance of any of the terms
and conditions of this Agreement shall have been obtained on or before
the Closing Date.
There shall be no injunction or order issued preventing, and no pending
or threatened claim, action, litigation or proceeding, judicial or
administrative, or investigation against any Party by any Governmental
Authority or Person for the purpose of enjoining or preventing the
consummation of this agreement, or otherwise claiming that this
Agreement or the consummation thereof is improper or would give rise to
proceedings under any statute or rule of law.
(g) No Material Changes - Based in the documents provided by InterUnion,
there shall have been, in the reasonable opinion of BMB and the BMB
Shareholders, no material adverse changes in the assets or financial
condition of InterUnion during the Interim Period. For the purposes of
this subsection, the term "material adverse change" shall mean any
change in the assets, liabilities or financial condition of InterUnion
that may, in the reasonable opinion of BMB and the BMB Shareholders
involve material reduction, damage, risk to or destruction of the
assets whether or not the change is covered by insurance.
(h) InterUnion Debt - As of the Closing, InterUnion shall have no
outstanding debt.
If any one or more of the foregoing conditions shall not have been fulfilled on
or before the Closing Date, BMB and the BMB Shareholders may terminate this
Agreement by notice in writing to InterUnion in which event BMB and the BMB
Shareholders shall be released from all obligations under this Agreement and
(unless BMB and the BMB Shareholders can show that the condition relied upon
could reasonably have been performed by InterUnion) InterUnion shall also be
released from all obligations hereunder; provided, however, that BMB and the BMB
Shareholders shall be entitled to waive compliance with any one or more of such
conditions in whole or in part if they shall see fit to do so, without prejudice
to their rights to termination in the event of the non-fulfilment of any other
condition in whole or in part.
17
ARTICLE X
INDEMNIFICATION
---------------
10.1 Mutual Indemnification's for Breaches of Warranty, etc. Subject to
section 10.3, InterUnion hereby covenants and agrees with BMB, and BMB covenants
and agrees severally with InterUnion (the parties covenanting and agreeing to
indemnify another party under this Article X are hereinafter individually
referred to as "Indemnifying Party" and the parties that are being indemnified
by another Party under this Article X are hereinafter individually referred to
as the "Indemnified Party") to indemnify and save harmless the Indemnified
Party, effective as and from the Closing Time, from and against any Claims which
may be made or brought against the Indemnified Party and/or which it may suffer
or incur as a result of, or arising out of any non-fulfillment of any covenant
or agreement on the part of the Indemnifying Party under this Agreement or any
Ancillary Agreement or any incorrectness in or breach of any representation or
warranty of the Indemnifying Party contained in this Agreement or any Ancillary
Agreement.
10.2 Undisclosed Liabilities Indemnity - Notwithstanding section 10.1 and
without limiting the generality of section 10.1:
(a) BMB shall indemnify InterUnion from all Claims arising from liabilities
or obligations to Persons that arise from the act or failure to act of
BMB prior to the Closing Date that are not disclosed to InterUnion
pursuant to Article 1V;
(c) InterUnion shall indemnify BMB, and the BMB Shareholders from all
Claims arising from liabilities or obligations to Persons that arise
from the act or failure to act of InterUnion prior to the Closing Date
that are not disclosed to BMB and the BMB Shareholders pursuant to
Article VI.
10.3 Limit on Mutual Indemnification. Indemnification obligations of each of
the Parties pursuant to section 10.1 and 10.2 shall be subject to the following:
(a) the applicable limitation mentioned in Article VII respecting the
survival of the representations and warranties of the Parties;
(b) the indemnity obligations under section 10.2 shall survive for a period
of three (3) years from the Closing Date;
(c) there shall be no limit as to amount in respect of breaches of the
representations and warranties of the Parties other than as
specifically limited by the provisions of the section; and
(d) an Indemnifying Party shall not be required to indemnify an Indemnified
Party until the aggregate Claims sustained by the Indemnified Party
exceeds a value of $5,000, in which case the Indemnifying Party shall
be obligated to the Indemnified party for all Claims without limit as
to amount.
10.4 Procedure for Indemnification. The following provisions shall apply to
any Claims for which an Indemnifying Party may be obligated to indemnify an
Indemnified Party pursuant to this Agreement:
18
(i) upon receipt from a third party by the Indemnified Party of
notice of a Claim or the Indemnified party becoming aware of a
Claim in respect of which the Indemnified Party proposes to
demand indemnification from the Indemnifying Party, the
Indemnified Party shall give notice to that effect to the
Indemnifying Party with reasonable promptness, provided that
failure to give such notice shall not relieve an Indemnifying
Party from any liability it may have to the Indemnified Party
except to the extent that the Indemnifying Party is prejudiced
thereby;
(ii) in the case of Claims arising from third parties, the
Indemnifying Party shall have the right by notice to the
Indemnified party not later than thirty (30) days after receipt
of the notice described in paragraph (i) above to assume the
control of the defense, compromise or settlement of the Claims,
provided that such assumption shall, by its terms, be without
costs to the Indemnified Party and the Indemnifying Party shall
at the Indemnified Party's request furnish it with reasonable
security against any costs or other liabilities to which it may
be or become exposed by reason of such defense, compromise or
settlement;
(iii) upon the assumption of control by the Indemnifying Party as
aforesaid, the Indemnifying Party shall diligently proceed with
the defense, compromise or settlement of the Claims at its sole
expense, including employment of counsel reasonably satisfactory
to the Indemnified Party and, in connection therewith, the
Indemnified Party shall co-operate fully, but at the expense of
the Indemnifying Party, to make available to the Indemnifying
Party all pertinent information and witnesses under the
Indemnified Party's control, make such assignments and take such
other steps as in the opinion of counsel for the Indemnifying
Party are necessary to enable the Indemnifying Party to conduct
such defense; provided always that the Indemnified Party shall be
entitled to reasonable security from the Indemnifying Party for
the expense, costs of other liabilities to which it may be or may
become exposed by reason of such co-operation;
(iv) the final determination of any such Claims arising from third
parties, including all related costs and expenses, will be
binding and conclusive upon the Parties as to the validity or
invalidity, as the case may be of such Claims against the
Indemnifying Party hereunder; and
(v) should the Indemnifying Party fail to give notice to the
Indemnified Party as provided in paragraph (ii) above, the
Indemnified Party shall be entitled to make such settlement of
the Claims as in its sole discretion may appear advisable, and
such settlement or any other final determination of the Claims
shall be binding upon the Indemnifying Party.
19
ARTICLE XI
CLOSING ARRANGEMENTS
--------------------
11.1 Closing. The Closing shall take place at the offices of Aird & Berlis
LLP, Barristers and Solicitors, 181 Bay Street, Suite 1800, BCE Place, Toronto,
M5J 2T9, Ontario, Canada at the Closing Time on the Closing Date, which such
date shall be November 25, 2003 at 4.00 p.m. or on such date and at such time as
the Parties may mutually agree and in no event later than January 30, 2004.
11.2 Closing Procedures. At the Closing Time:
(a) InterUnion shall issue and deliver to the BMB Shareholders possession
of an aggregate of 148,571,429 InterUnion Shares;
(b) the BMB Shareholders shall deliver up to InterUnion 1,000 shares of
BMB.
(c) BMB Munai LLC and Alexandre Agaian have shall have signed a release re
indebtedness (as specified in section 9.1(i) of this Agreement.
(d) BMB shall provide to InterUnion a certified copy of a unanimous
resolution of the shareholders of BMB approving the Share Exchange;
(e) Counsel for BMB shall deliver a legal opinion, addressed to InterUnion
and counsel for InterUnion, in a form satisfactory to counsel for
InterUnion, concerning the status and standing of BMB and other various
material issues addressed herein concerning BMB and the BMB Shareholder
including various matters addressed in Articles III and IV herein;
(f) Counsel for InterUnion shall deliver a legal opinion, addressed to BMB
and the BMB Shareholders and counsel for BMB and the BMB Shareholders,
in a form satisfactory to counsel for BMB and the BMB Shareholders,
concerning the status and standing of InterUnion and other various
material issues addressed herein concerning InterUnion including
various matters addressed in Article VI herein;
(g) The current directors of InterUnion who have not been invited to join
the board of directors of BMB shall resign in seriatim from the board
of InterUnion in favor of the nominees of BMB; and
(h) The Parties shall take or shall have taken, as the case may be, the
other actions contemplated to be taken by them at or before the Closing
contemplated in this Agreement.
11.3 Non-Waiver. No investigations made by or on behalf of InterUnion, BMB
and the BMB Shareholders at any time shall have the effect of waiving or
diminishing the scope of or otherwise affecting any representation, warranty or
indemnity made by or imposed upon the Parties pursuant to this Agreement.
20
11.4 Merger Advisor Fee. At or before Closing, BMB shall pay to Credifinance
Securities Limited a merger advisory fee of $150,000.
ARTICLE XII
GENERAL
-------
12.1 Termination
(a) This Agreement may be terminated at any time prior to the Closing:
(i) by the mutual agreement of the Parties;
(ii) by the Parties if:
(I) the Merger shall not have been completed by January 30, 2004
(or such other date, if any, as the Parties shall have
agreed in writing), if the failure to complete such purchase
and sale on or before such date is not caused by any breach
of this Agreement by the Party electing to terminate; or
(II) the Merger would violate any non-appealable final order,
decree or judgment of any court or governmental body having
competent jurisdiction.
(b) If this Agreement is terminated by a Party under subsection 11.1(a),
such termination shall be without liability of either Party to the
other parties, or to any of their shareholders, directors, officers,
employees, agents, consultants or representatives provided that if such
termination shall result from the willful failure of the Party to
fulfill a condition to the performance of the other Parties or to
perform a covenant of this agreement or from a willful breach by the
party to this Agreement, the Party shall be fully liable for any and
all damages, costs and expenses (including, but not limited to,
reasonable counsel fees and disbursements) sustained or incurred by the
other Parties.
12.2 Expenses. All costs and expenses (including the fees and disbursements
of accountants and legal counsel) incurred in connection with this Agreement and
completion of the transactions contemplated by this Agreement shall be paid by
each Party whether or not the Merger is completed.
12.3 Notices. Any notice or other communication which is required or
permitted to be given or made by one Party to the others hereunder shall be in
writing and shall be either:
(1) personally delivered to such Parties; or (2) sent by facsimile.
Any notice shall be sent to the intended recipient at its address as follows:
21
(a) to InterUnion:
1232 North Ocean Way
Palm Beach FL 33480
Attention: Georges Benarroch
Facsimile: (561) 877-0517
(b) to BMB and/or the BMB Shareholders at:
245 East 93rd Street Suite 22E
New York NY 10128
Attention : Alexandre Agaian
Facsimile : (212) 534-6712
or at such other address as any Party may from time to time advise the others by
notice in writing. Any notice given by personal delivery shall be deemed to be
received on the date of delivery. Any notice sent by facsimile or similar method
of recorded communication shall be deemed to have been received on the next
Business Day following the date of its transmission.
12.4 Further Assurances. The Parties shall with reasonable diligence do all
things and provide all reasonable assurances as may be required to complete the
transactions contemplated by this Agreement, and each Party shall provide such
further documents or instruments required by any other Party as may be
reasonably necessary or desirable to give effect to this Agreement and carry out
its provisions, whether before or after the Closing.
12.5 Public Notice. All public notices to third parties and all other
publicity concerning the transactions contemplated by this Agreement shall be
jointly planned and co-coordinated by the Parties and no Party shall act
unilaterally in this regard without the prior written approval of the other
Parties, such approval not to be unreasonably withheld.
12.6 Amendment and Waiver. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound. No waiver of any of the Provisions of this Agreement shall
constitute a waiver of any other provision (whether or not similar) nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.
12.7 Assignment. This Agreement and the rights or obligations hereunder or
thereunder are not assignable by any Party without the prior written consent of
the other Parties, which consent shall not be unreasonably withheld. This
Agreement shall ensure to the benefit of and be binding upon the Parties and
their respective successors and permitted assigns.
12.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
hereof. Any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
22
12.9 Independent Legal Advice. The Parties hereby acknowledge that each has
been advised to seek independent legal counsel in respect of the Agreement and
the matters contemplated herein. To the extent that a Party declines to receive
independent legal counsel in respect of the Agreement, that Party waives the
right, should a dispute later develop, to rely on its lack of independent legal
counsel to avoid its obligations, to seek indulgences from the other Parties or
to otherwise attack the integrity of the Agreement and the provisions thereof,
in whole or in part.
12.10 Counterparts. This agreement may be executed by the Parties in one or
more counterparts by original or facsimile signature, each of which when so
executed and delivered shall be an original and such counterparts shall together
constitute one and the same instrument.
(Executions on next page)
23
IN WITNESS WHEREOF this agreement has been executed by the Parties each
as of the day and year first before written.
THIS AGREEMENT IS HEREBY EXECUTED on the date set forth above.
INTERUNION FINANCIAL CORP.
Per: /s/ Georges Benarroch
----------------------------------------
Authorized Signing Officer
I have authority to bind the company
BMB HOLDING, INC.
Per: /s/ Alexandre Agaian
----------------------------------------
Authorized Signing Officer
I have authority to bind the company
24
SCHEDULE 1
DEFINITIONS
"Affiliate and Associate" means an "affiliate" and "associate", respectively, as
those terms redefined in the Securities Act of 1933, as amended on the date
hereof.
"Agreement" means this Plan and Agreement of Merger and any instrument
supplemental or ancillary to it.
"Ancillary Agreements" means all documents, agreements, certificates and
instruments to be executed or delivered by any Person under this Agreement
including the Conveyance Documents.
"Authorized Representatives" means employees, agents, counsel, accountants and
other representatives.
"BMB's Business" means BMB's business, and headquartered in New York City, NY.
BMB is a company engaged in the development and production of oil and gas in the
Republic of Kazakhstan through its 70% interest in Emir Oil, LLC.
"BMB Records" means BMB's books, records, files, including business and
financial records, documentation and information (other than the BMB Financial
Statements), whether in writing or stored in any retrieval system or data base.
"BMB Securities" means all the issued and outstanding securities of BMB, being
one thousand (1,000) common shares.
"BMB Shareholders" means the registered shareholders of BMB, respectively, as of
the day this Agreement was executed.
"Business Day" means any day other than a Saturday, Sunday or statutory holiday
in the State of Delaware.
"Claims" means claims, demands, actions, causes of action, damages, losses,
costs, fines, penalties, interest, liabilities and expenses, including, without
limitation, reasonable legal fees.
"Closing" means the completion of the Merger of InterUnion and BMB pursuant to
this Agreement.
"Closing Date" means November 25, 2003, or such other later date as may be
agreed to by the Parties.
"Closing Time" means 4:00 p.m. (Toronto time) on the Closing Date or such other
time on the Closing Date as may be agreed to by the Parties.
25
"Consolidation" means the consolidation of the outstanding common shares of
InterUnion on a 1 for 10 basis as provided herein.
"Conveyance Documents" means all bills of sale, assignments, instruments of
transfer, assurances, consents, and other documents as shall be necessary to
effectively transfer to InterUnion the BMB Securities
"Encumbrances" means any mortgage, charge, pledge, hypothecate, lien,
encumbrance, restriction, option, right of others or security interest of any
kind.
"Governmental Authorities" means any applicable United States or non-US federal,
state and municipal agency, ministry, department, inspector and official.
"Interim Period" means the period commencing on the date of this Agreement and
ending immediately before the opening of business on the Closing Date.
"InterUnion Financial Statements" means the financial statements of InterUnion
attached Schedule 3.
InterUnion Information Circular" means the draft management information circular
of InterUnion appended hereto as Schedule 4, to be used at the annual and
special meeting of the shareholders of the Corporation relating to, amongst
other things, the Share Exchange.
"InterUnion Options" means the outstanding options to acquire InterUnion common
shares as of the date of this Agreement.
"InterUnion Records" means InterUnion books, records, files including business
and financial records, documentation and information (other than the InterUnion
Financial Statements), whether in writing or stored in any retrieval system or
data base.
"InterUnion Shares" means an aggregate of 148,571,429, the common shares of
InterUnion to be issued to the BMB Shareholders, or as they may direct, under
the terms of this Agreement of Merger.
"InterUnion Warrants" means the outstanding warrants to acquire common shares of
InterUnion as of the date of this Agreement.
"Law" means any law, rule or regulation of any Governmental Authority.
"Letter of Intent" means the letter of intent dated August 7, 2003 between
InterUnion and BMB which is superseded by this Agreement.
"Parties" means the parties to the Agreement and "Party" means any one of them.
"Permits" means authorizations, registrations, permits, approvals or licenses
that can be issued or granted by Governmental Authorities.
26
"Person" means an individual, body corporate, partnership, trustee, trust,
unincorporated association, executor, administrator or legal representative.
"Records" means the BMB Records, InterUnion Records and Subsidiary Records.
"Regulatory Approval" means the approvals and consents of applicable regulatory
authorities in the United States, which are required to complete the Share
Exchange.
"SEC" means the United States Securities and Exchange Commission.
"Shareholder Approval" means approval by a majority of the holders of the common
shares in InterUnion Financial Corporation or BMB Holding, Inc as the case may
be, in respect to the Merger and any action requiring approval of the InterUnion
shareholders.
"Tax" and "Taxes" shall mean all taxes and similar governmental charges,
imposts, levies, duties, fees and assessments, however denominated, including
any interest, penalties, fines or additions to tax that may become payable in
respect thereof, imposed by any federal, state or local government or any agency
or political subdivision thereof or therein, whether arising before, on or after
the Closing Date.
27
SCHEDULE 2
FINANCIAL STATEMENTS OF BMB HOLDING, INC.
[to be provided at a later date via amendment]
29
SCHEDULE 3
FINANCIAL STATEMENTS OF INTERUNION FINANCIAL CORPORATION
[to be provided at a later date via amendment]
29
SCHEDULE 4
INTERUNION FINANCIAL CORPORATION
MANAGEMENT INFORMATION CIRCULAR
[to be provided at a later date via amendment]
30
SCHEDULE 5
BMB SHAREHOLDINGS
- ---------- -------------------------------------------- ------------------------- ---------------------------
No. Name and Address of BMB SHAREHOLDERS Number of BMB Number of InterUnion Shaes
Shares Owned to be Issued to
BMB Shareholders
- ---------- -------------------------------------------- ------------------------- ---------------------------
1 BMB Munai, LLC, 500 76,571,429 (1)
59A Kabanbai Batyr St.,
Almaty, Kazakhstan
- ---------- -------------------------------------------- ------------------------- ---------------------------
2 Boris T. Cherdabayev, 220 31,428,572
162 Kunayeva Street, Apt 51
Almaty, Kazakhstan
- ---------- -------------------------------------------- ------------------------- ---------------------------
3 Bakhtybek R. Baiseitov 120 17,142,857
c/o Alexandre Agaian
245 East 93rd Street, Apt. 22E
New York, New York 10128
- ---------- -------------------------------------------- ------------------------- ---------------------------
4 Caspian Services Group Limited 10 1,428,571
c/o Alexandre Agaian
245 East 93rd Street, Apt. 22E
New York, New York 10128
- ---------- -------------------------------------------- ------------------------- ---------------------------
5 Alexandre Agaian 30 4,857,143 (2)
245 East 93rd Street, Apt. 22E
New York, New York 10128
- ---------- -------------------------------------------- ------------------------- ---------------------------
6 Anuar R. Kulmagambetov 20 2,857,143
c/o Alexandre Agaian
245 East 93rd Street, Apt. 22E
New York, New York 10128
- ---------- -------------------------------------------- ------------------------- ---------------------------
7 Mirgali S. Kunayev 100 14,285,714
58 Zenkova Street, Apt. 52
Almaty Kazakhstan 480100
- ---------- -------------------------------------------- ------------------------- ---------------------------
TOTAL 1,000 148,571,429
- ---------- -------------------------------------------- ------------------------- ---------------------------
(1) Such number of shares includes 5,142,857 in respect of conversion of
$1,800,000 of indebtedness owed by BMB Holding, Inc.
(2) Such number of shares includes 571,429 in respect of conversion of
$200, 00.00 of indebtedness owed by BMB Holding, Inc.
31
SCHEDULE 6
AGENCY AGREEMENT
[Attached as Exhibit 10.1]
32