Agreement and Plan of Reorganization between United Management, Inc. and RRUN Ventures Inc. (December 18, 2000)

Summary

This agreement is between United Management, Inc. and RRUN Ventures Inc., both Nevada corporations, to merge RRUN into United Management. The surviving company will be renamed RRUN Ventures Inc. and RRUN shareholders will exchange their shares for shares in United Management. The purpose is to create a single entity through a tax-free reorganization under the Internal Revenue Code. The agreement outlines the representations, warranties, and obligations of both parties to complete the merger, subject to certain conditions and approvals.

EX-2.1 3 pdm111b.txt AGREEMENT/PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION by and among United Management, Inc. a Nevada corporation and RRUN Ventures Inc. a Nevada corporation Effective as of December 18, 2000 AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and entered into this 18th day of December, 2000, by and between United Management, Inc., a Nevada corporation ("UM"), and RRUN Ventures Inc., a Nevada corporation, ("RRUN"). Premises A. This Agreement provides for the reorganization of RRUN with and into UM, with the surviving entity adopting the name RRUN Ventures Inc., and in connection therewith, the exchange of the outstanding common stock of RRUN for shares of common voting stock of UM, all for the purpose of effecting a tax-free reorganization pursuant to sections 354 and 368(a) of the Internal Revenue Code of 1986, as amended. The boards of directors of UM and RRUN have determined, subject to the terms and conditions set forth in this Agreement, that the exchange contemplated hereby, as a result of which UM and RRUN will become one entity, is desirable and in the best interests of their stockholders. This Agreement is being entered into for the purpose of setting forth the terms and conditions of the proposed exchange. Agreement NOW, THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the parties to be derived herefrom, it is hereby agreed as follows: ARTICLE I REPRESENTATIONS, COVENANTS AND WARRANTIES OF RRUN As an inducement to and to obtain the reliance of UM, RRUN represents and warrants as follows: Section 1.1 Organization. RRUN is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it is now being conducted, including qualification to do business as a foreign corporation in the jurisdiction in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the RRUN Schedules (as hereinafter defined) are complete and correct copies of the articles of incorporation, bylaws and amendments thereto of RRUN as in effect on the date hereof. The execution and delivery of this Agreement do not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not violate any provision of RRUN's articles of incorporation or bylaws. RRUN has full power, authority and legal right and has taken all action required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution and delivery of this Agreement. Section 1.2 Capitalization. The authorized capitalization of RRUN consists of 25,000,000 common shares, par value $0.001 per share. All issued and outstanding shares are legally issued, fully paid and nonassessable and are not issued in violation of the preemptive or other rights of any person. RRUN has no other securities, warrants or options authorized or issued other than as set forth in the RRUN Schedules. Section 1.3 Subsidiaries and Predecessor Corporations. Except as otherwise set forth in the RRUN Schedules or as previously provided to UM, RRUN does not have any other subsidiaries and does not own, beneficially or of record, any shares of any other corporation. Section 1.4 Financial Statements. Included in the RRUN Schedules is RRUN's audited financial statements (including any predecessor companies) including a balance sheet, statement of operations, shareholder equity and cash flows and notes thereto, dated as of November 15, 2000. Relevant thereto: (a) the RRUN balance sheet presents fairly as of its date the financial condition of RRUN and RRUN does not have, as of the date of such balance sheet, except as noted and to the extent reflected or reserved against therein, any liabilities or obligations (absolute or contingent) which should be reflected in a balance sheet or the notes thereto and all material assets reflected therein are properly reported and present fairly the value of the assets of RRUN, in accordance with generally accepted accounting principles; (b) RRUN has no material liabilities with respect to the payment of any provincial, federal, state, county, local or other taxes (including any deficiencies, interest or penalties), except for taxes accrued but not yet due and payable; (c) RRUN has filed all, state, federal and local income tax returns required to be filed by it from inception to the date hereof, if any; (d) the books and records, financial and others, of RRUN are in all material respects complete and correct and have been maintained in accordance with good business accounting practices; and (e) except as and to the extent disclosed in the most recent RRUN balance sheet and the RRUN Schedules, RRUN has no material contingent liabilities, direct or indirect, matured or unmatured. Section 1.5 Information. The information concerning RRUN set forth in this Agreement and in the RRUN Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. Section 1.6 Options and Warrants. Except as set forth in the RRUN Schedules, there are no existing options, warrants, calls or commitments of any character to which RRUN is a party and by which it is bound. Section 1.7 Absence of Certain Changes or Events. Except as set forth in this Agreement, the RRUN Schedules, or as otherwise disclosed to UM: (a) there has not been: (i) any material adverse change in the business, operations, properties, assets or condition of RRUN; or (ii) any damage, destruction or loss to RRUN (whether or not covered by insurance) materially and adversely affecting the business, operations, properties, assets or condition of RRUN; (b) RRUN has not: (i) amended its articles of incorporation or bylaws; (ii) declared or made, or agreed to declare or make, any payment of dividends or distributions of any assets of any kind whatsoever to stockholders or purchased or redeemed or agreed to purchase or redeem any of its capital stock; (iii) waived any rights of value which in the aggregate are extraordinary or material considering the business of RRUN; (iv) made any material change in its method of management, operation or accounting; (v) entered into any other material transaction; (vi) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee; (vii) increased the rate of compensation payable or to become payable by it to any of its officers or directors or any of its employees whose monthly compensation exceeds $5,000; or (viii) made any increase in any profit sharing, bonus, deferred compensation, insurance, pension, retirement or other employee benefit plan, payment or arrangement made to, for, or with its officers, directors or employees; (c) RRUN has not: (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof; (ii) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; (iii) paid any material obligation or liability (absolute or contingent) other than current liabilities reflected in or shown on the most recent RRUN balance sheet and current liabilities incurred since that date in the ordinary course of business; (iv) sold or transferred, or agreed to sell or transfer, any of its assets, properties or rights (except assets, properties or rights not used or useful in its business which, in the aggregate have a value of less than $10,000); (v) made or permitted any amendment or termination of any contract, agreement or license to which it is a party if such amendment or termination is material, considering the business of RRUN; or (vi) issued, delivered or agreed to issue or deliver any stock, bonds or other corporate securities, including debentures (whether authorized and unissued or held as treasury stock); and (d) to the best knowledge of RRUN, it has not become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of RRUN. Section 1.8 Title and Related Matters. RRUN has good and marketable title to and is the sole and exclusive owner of all of its properties, inventory, interests in properties and assets, real and personal (collectively, the "Assets") which are reflected in the RRUN audited balance sheet and the RRUN Schedules or acquired after that date (except properties, interests in properties and assets sold or otherwise disposed of since such date in the ordinary course of business), free and clear of all liens, pledges, charges or encumbrances except: (a) statutory liens or claims not yet delinquent; (b) such imperfections of title and easements as do not and will not, materially detract from or interfere with the present or proposed use of the properties subject thereto or affected thereby or otherwise materially impair present business operations on such properties; and (c) as described in the RRUN Schedules. Except as set forth in the RRUN Schedules, RRUN owns free and clear of any liens, claims, encumbrances, royalty interests or other restrictions or limitations of any nature whatsoever any and all procedures, techniques, marketing plans, business plans, methods of management or other information utilized in connection with RRUN's business. Except as set forth in the RRUN Schedules, no third party has any right to, and RRUN has not received any notice of infringement of or conflict with asserted rights of others with respect to any product, technology, data, trade secrets, know-how, proprietary techniques, trademarks, service marks, trade names or copyrights which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a materially adverse effect on the business, operations, financial conditions or income of RRUN or any material portion of its properties, assets or rights. Section 1.9 Litigation and Proceedings. To the best of RRUN's knowledge and belief, there are no actions, suits, proceedings or investigations pending or threatened by or against RRUN or affecting RRUN or its properties, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign or before any arbitrator of any kind that would have a material adverse effect on the business, operations, financial condition or income of RRUN. RRUN does not have any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality or of any circumstances which, after reasonable investigation, would result in the discovery of such a default. Section 1.10 Contracts. (a) Except as included or described in the RRUN Schedules, there are no material contracts, agreements, franchises, license agreements or other commitments to which RRUN is a party or by which it or any of its assets, products, technology or properties are bound; (b) except as included or described in the RRUN Schedules or reflected in the most recent RRUN balance sheet, RRUN is not a party to any oral or written: (i) contract for the employment of any officer or employee which is not terminable on thirty (30) days or less notice; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money; (iv) guaranty of any obligation, other than one on which RRUN is a primary obligor, for collection and other guaranties of obligations, which, in the aggregate do not exceed more than one year or providing for payments in excess of $10,000 in the aggregate; (v) consulting or other similar contracts with an unexpired term of more than one year or providing for payments in excess of $10,000 in the aggregate; (vi) collective bargaining agreements; (vii) agreement with any present or former officer or director of RRUN; or (viii) contract, agreement or other commitment involving payments by it of more than $10,000 in the aggregate; and (c) to RRUN's knowledge, all contracts, agreements, franchises, license agreements and other commitments to which RRUN is a party or by which its properties are bound and which are material to the operations of RRUN taken as a whole, are valid and enforceable by RRUN in all respects, except as limited by bankruptcy and insolvency laws and by other laws affecting the rights of creditors generally. Section 1.11 Material Contract Defaults. Except as set forth in the RRUN Schedules, to the best of RRUN's knowledge and belief, RRUN is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of RRUN, and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which RRUN has not taken adequate steps to prevent such a default from occurring. Section 1.12 No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which RRUN is a party or to which any of its properties or operations are subject. Section 1.13 Governmental Authorizations. To the best of RRUN's knowledge, RRUN has all licenses, franchises, permits or other governmental authorizations legally required to enable RRUN to conduct its business in all material respects as conducted on the date hereof. Except for compliance with provincial, federal and state securities and corporation laws, as hereinafter provided, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by RRUN of this Agreement and the consummation by RRUN of the transactions contemplated hereby. Section 1.14 Compliance With Laws and Regulations. To the best of RRUN's knowledge, except as disclosed in the RRUN Schedules, RRUN has complied with all applicable statutes and regulations of any provincial, federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of RRUN or would not result in RRUN's incurring any material liability. Section 1.15 Insurance. All of the insurable properties owned either directly or indirectly by RRUN are insured for RRUN's benefit in accordance with the insurance policies disclosed in the RRUN Schedules under valid and enforceable policies issued by insurers of recognized responsibility. Such policy or policies containing substantially equivalent coverage will be outstanding and in full force at the Closing Date. Section 1.16 Approval of Agreement The board of directors and shareholders of RRUN have authorized the execution and delivery of this Agreement by RRUN and have approved the transactions contemplated hereby. Section 1.17 Material Transactions or Affiliations. Except as disclosed herein and in the RRUN Schedules, there exists no material contract, agreement or arrangement between RRUN and any predecessor and any person who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by RRUN to own beneficially, ten percent (10%) or more of the issued and outstanding Common Shares of RRUN and which is to be performed in whole or in part after the date hereof. In all of such transactions, the amount paid or received, whether in cash, in services or in kind, has been during the full term thereof, and is required to be during the unexpired portion of the term thereof, no less favorable to RRUN than terms available from otherwise unrelated parties in arms-length transactions. There are no commitments by RRUN, whether written or oral, to lend any funds to, borrow any money from or enter into any other material transactions with, any such affiliated person. Section 1.18 Labor Relations. RRUN has never had a work stoppage resulting from labor problems. To the best knowledge of RRUN, no union or other collective bargaining organization is organizing or attempting to organize any employee of RRUN. Section 1.19 Previous Sales of Securities. Since inception, RRUN has sold 6,108,780 Common Shares to investors in reliance upon applicable exemptions from the registration requirements under the laws of the United States and any applicable state laws and in accordance with the laws of said jurisdictions. Section 1.20 RRUN Schedules. Upon execution hereof, RRUN will deliver to UM the following schedules, which are collectively referred to as the "RRUN Schedules" and which consist of separate schedules dated as of the date of this Agreement and instruments and data as of such date, all certified by the chief executive officer of RRUN as complete, true and correct in all material respects: (a) copies of the articles of incorporation, bylaws and all minutes of shareholders' and directors' meetings of RRUN or such other corporate documentation and records required to maintain RRUN in good standing in the State of Nevada; (b) the financial statements of RRUN referenced hereinabove in Section 1.4; (c) a list indicating the names and addresses of the stockholders of RRUN, together with the number of shares owned by them; (d) copies of all licenses, permits and other governmental authorizations, requests or applications therefore, pursuant to which RRUN carries on or proposes to carry on its business (except those which in the aggregate, are immaterial to the present or proposed business of RRUN); (e) a list of every debt, mortgage, security interest, pledge, lien, encumbrance or claim of any nature whatsoever in excess of $10,000 as may affect RRUN, its properties or assets; (f) a list of all executive employees of RRUN, including current compensation, with notation as to job description and whether or not such employee is subject to a written contract; (g) a description of all real and personal property owned by RRUN, together with a description of every mortgage, deed of trust, pledge, lien, agreement, encumbrance, claim or equity interest of any nature whatsoever in such real and personal property; (h) copies of all material contracts, leases, agreements or other instruments to which RRUN is a party or by which it or its properties are bound; (i) the name and location of each bank or other institution with which RRUN has an account or safety deposit box and the names of all persons authorized to draw thereon or having access thereto; (j) a copy of all material documentation relating to the sale of Common Shares provided by RRUN to its present stockholders including a copy of the Stock Option Plan adopted by the shareholders of RRUN (the "RRUN Stock Option Plan") and copies of all Stock Option Agreements (the "RRUN Stock Option Agreements") entered into pursuant to the RRUN Stock Option Plan; (k) a list of insurance policies referred to in Section 1.15; (l) a description of any material adverse change in the business operations, property, inventory, assets or condition of RRUN since the most recent RRUN balance sheet required to be provided pursuant to Section 1.4; and (m) any other information, together with any required copies of documents required to be disclosed in the RRUN Schedules by Sections 1.1 through 1.19. RRUN shall cause the RRUN Schedules and the instruments and data delivered to UM hereunder to be updated after the date hereof up to and including the Closing Date, as hereinafter defined. ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES OF UM As an inducement to, and to obtain the reliance of RRUN, UM represents and warrants as follows: Section 2.1 Organization. UM is a corporation duly organized, validly existing and in good standing under the laws of the state of Nevada and has the corporate power and is duly authorized, qualified, franchised and licensed under all applicable laws, regulations, ordinances and orders of public authorities to own all of its properties and assets and to carry on its business in all material respects as it are now being conducted, including qualification to do business as a foreign corporation in the states in which the character and location of the assets owned by it or the nature of the business transacted by it requires qualification. Included in the UM Schedules (as hereinafter defined) are complete and correct copies of the articles of incorporation and bylaws of UM as in effect on the date hereof. The execution and delivery of this Agreement does not and the consummation of the transactions contemplated by this Agreement in accordance with the terms hereof will not, violate any provision of UM's articles of incorporation or bylaws. UM has taken all action required by law, its articles of incorporation, its bylaws or otherwise to authorize the execution and delivery of this Agreement. UM has full power, authority and legal right and has taken all action required by law, its articles of incorporation, bylaws or otherwise to consummate the transactions herein contemplated. Section 2.2 Capitalization. The authorized capitalization of UM consists of 100,000,000 shares of Common Stock, par value $0.0001 per share. As of the date hereof there are 500,000 restricted Common Shares of UM issued and outstanding which will be cancelled prior to the Closing Date (as defined herein). Section 2.3 Subsidiaries. UM has no subsidiary companies. Section 2.4 Financial Statements. (a) Included in the UM Schedules are the audited balance sheet of UM for the fiscal years ended June 30, 2000 and 1999, and the related statements of operations, stockholders' equity and cash flows for the years then ended, and the unaudited balance sheet and related statement of operations, stockholders' equity and cash flow for the three month period ended September 30, 2000, which are included in the schedules identified in Section 2.19(b). (b) All such financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The UM balance sheets present fairly as of their respective dates the financial condition of UM. UM did not have as of the date of any of such UM balance sheets, any liabilities or obligations (absolute or contingent) which should be reflected in a balance sheet or the notes thereto prepared in accordance with generally accepted accounting principles, and all assets reflected therein are properly reported and present fairly the value of the assets of UM, in accordance with generally accepted accounting principles. The statements of operations, stockholders' equity and changes in financial position reflect fairly the information required to be set forth therein by generally accepted accounting principles. (c) The books and records, financial and others, of UM are in all material respects complete and correct and have been maintained in accordance with good business accounting practices. (d) UM has no liabilities with respect to the payment of any federal, state, county, local or other taxes (including any deficiencies, interest or penalties). (e) As of the Closing Date, as defined herein, the UM balance sheets and the notes thereto, shall reflect that UM has: (i) no receivables; (ii) no accounts payable; and (iii) no contingent liabilities, direct or indirect, matured or unmatured. Section 2.5 Information. The information concerning UM as set forth in this Agreement and in the UM Schedules is complete and accurate in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to make the statements made, in light of the circumstances under which they were made, not misleading. Section 2.6 Options and Warrants. Other than as previously disclosed by UM to RRUN and as otherwise included in the UM Schedules, there are no existing options, warrants, calls or commitments of any character to which UM is a party and by which it is bound. Section 2.7 Absence of Certain Changes or Events. Except as described herein or in the UM Schedules: (a) UM has not: (i) amended its articles of incorporation or bylaws; (ii) waived any rights of value which in the aggregate are extraordinary or material considering the business of UM; (iii) made any material change in its method of management, operation or accounting; or (iv) made any accrual or arrangement for or payment of bonuses or special compensation of any kind or any severance or termination pay to any present or former officer or employee; (b) UM has not: (i) granted or agreed to grant any options, warrants or other rights for its stocks, bonds or other corporate securities calling for the issuance thereof, which option, warrant or other right has not been cancelled as of the Closing Date; or (ii) borrowed or agreed to borrow any funds or incurred or become subject to, any material obligation or liability (absolute or contingent) except liabilities incurred in the ordinary course of business; and (c) to the best knowledge of UM, it has not become subject to any law or regulation which materially and adversely affects, or in the future may adversely affect, the business, operations, properties, assets or condition of UM. Section 2.8 Title and Related Matters. As of the Closing Date, UM will own no real, personal or intangible property. Section 2.9 Litigation and Proceedings. There are no actions, suits or proceedings pending or, to the best of UM's knowledge and belief, threatened by or against or affecting UM, at law or in equity, before any court or other governmental agency or instrumentality, domestic or foreign, or before any arbitrator of any kind that would have a material adverse effect on the business, operations, financial condition, income or business prospects of UM. UM does not have any knowledge of any default on its part with respect to any judgment, order, writ, injunction, decree, award, rule or regulation of any court, arbitrator or governmental agency or instrumentality. Section 2.10 Contracts. On the Closing Date: (a) there are no material contracts, agreements, franchises, license agreements, or other commitments to which UM is a party or by which it or any of its properties are bound. (b) UM is not a party to any contract, agreement, commitment or instrument or subject to any charter or other corporate restriction or any judgment, order, writ, injunction, decree or award which materially and adversely affects, or in the future may (as far as UM can now foresee) materially and adversely affect, the business, operations, properties, assets or conditions of UM; and (c) UM is not a party to any material oral or written: (i) contract for the employment of any officer or employee; (ii) profit sharing, bonus, deferred compensation, stock option, severance pay, pension, benefit or retirement plan, agreement or arrangement covered by Title IV of the Employee Retirement Income Security Act, as amended; (iii) agreement, contract or indenture relating to the borrowing of money; (iv) guaranty of any obligation for the borrowing of money or otherwise, excluding endorsements made for collection and other guaranties of obligations, which, in the aggregate exceeds $1,000; (v) consulting or other similar contract with an unexpired term of more than one year or providing for payments in excess of $1,000 in the aggregate; (vi) collective bargaining agreement; (vii) agreement with any present or former officer or director of UM; or (viii) contract, agreement, or other commitment involving payments by it of more than $1,000 in the aggregate. Section 2.11 No Conflict With Other Instruments. The execution of this Agreement and the consummation of the transactions contemplated by this Agreement will not result in the breach of any term or provision of, or constitute an event of default under, any material indenture, mortgage, deed of trust or other material contract, agreement or instrument to which UM is a party or to which any of its properties or operations are subject. Section 2.12 Material Contract Defaults. To the best of UM's knowledge and belief, UM is not in default in any material respect under the terms of any outstanding contract, agreement, lease or other commitment which is material to the business, operations, properties, assets or condition of UM, and there is no event of default in any material respect under any such contract, agreement, lease or other commitment in respect of which UM has not taken adequate steps to prevent such a default from occurring. Section 2.13 Governmental Authorizations. To the best of UM's knowledge, UM has all licenses, franchises, permits and other governmental authorizations that are legally required to enable it to conduct its business operations in all material respects as conducted on the date hereof. Except for compliance with federal and state securities or corporation laws, no authorization, approval, consent or order of, or registration, declaration or filing with, any court or other governmental body is required in connection with the execution and delivery by UM of the transactions contemplated hereby. Section 2.14 Compliance With Laws and Regulations. To the best of UM's knowledge and belief, UM has complied with all applicable statutes and regulations of any federal, state or other governmental entity or agency thereof, except to the extent that noncompliance would not materially and adversely affect the business, operations, properties, assets or condition of UM or would not result in UM's incurring any material liability. Further, UM is, as of the date of this Agreement, a "reporting company" under Section 12 of the Securities Exchange Act of 1934, as amended, and is current in filing all reports required to be filed pursuant to said Act. Section 2.15 Insurance. UM has no insurable properties and no insurance policies will be in effect at the Closing Date, as hereinafter defined. Section 2.16 Approval of Agreement The board of directors and shareholders of UM have authorized the execution and delivery of this Agreement by UM and have approved the transactions contemplated hereby. Section 2.17 Material Transactions or Affiliations. As of the Closing Date, there will exist no material contract, agreement or arrangement between UM and any person who was at the time of such contract, agreement or arrangement an officer, director or person owning of record, or known by UM to own beneficially, ten percent (10%) or more of the issued and outstanding common stock of UM and which is to be performed in whole or in part after the date hereof. UM has no commitment, whether written or oral, to lend any funds to, borrow any money from or enter into any other material transactions with, any such affiliated person. Section 2.18 Labor Relations. UM has never had a work stoppage resulting from labor problems. UM has no employees other than its officers and directors. Section 2.19 Previous Sales of Securities. Since inception, UM has sold 500,000 Common Shares to investors in reliance upon applicable exemptions from the registration requirements under the laws of the State of Nevada, the United States and Canada and all such sales were made in accordance with the laws of said jurisdictions. Section 2.20 UM Schedules. Upon execution hereof, UM shall deliver to RRUN the following schedules, which are collectively referred to as the "UM Schedules" which are dated the date of this Agreement, all certified by an officer of UM to be complete, true and accurate: (a) complete and correct copies of the articles of incorporation and bylaws of Nevada as in effect as of the date of this Agreement; (b) copies of all financial statements of UM identified in Section 2.4(a); (c) a list indicating the names and addresses of the stockholders of UM, together with the number of shares owned by them; (d) the description of any material adverse change in the business, operations, property, assets, or condition of UM since September 30, 2000, required to be provided pursuant to Section 2.7; (e) a list of all executive employees of UM, including current compensation, with notation as to job description and whether or not such employee is subject to a written contract; and (f) any other information, together with any required copies of documents, required to be disclosed in the UM Schedules by Sections 2.1 through 2.20. UM shall cause the UM Schedules and the instruments to be delivered to RRUN hereunder to be updated after the date hereof up to and including the Closing Date. It is specifically acknowledged by UM that it has no licenses, permits or other governmental authorizations relevant to its business. ARTICLE III EXCHANGE PROCEDURE Section 3.1 Share Exchange/Delivery of RRUN Securities. On the Closing Date, the holders of the RRUN Common Shares shall deliver to UM (i) certificates or other documents evidencing all of the issued and outstanding RRUN Common Shares, duly endorsed in blank or with executed stock power attached thereto in transferable form; and (ii) investment letters, the form of which is attached hereto as Exhibit "A". On the Closing Date, all previously issued and outstanding shares of common stock of RRUN shall be canceled and all rights in respect thereof shall cease. Section 3.2 Issuance of UM Common Shares. In exchange for all of the RRUN Common Shares tendered pursuant to Section 3.1, UM shall issue an aggregate of 305,439 "restricted" UM Common Shares to the RRUN shareholders on a pro rata basis to their existing ownership in RRUN. The calculation of the number of UM common shares issued to each RRUN shareholder shall be rounded down to the nearest whole share. Following the exchange of shares as set forth in Section 3.1 above and in this Section 3.2, UM and RRUN shall be merged pursuant to Chapter 92A of the Nevada Revised Statutes with UM being the surviving entity. Section 3.3 Survival of Options. (a) It is specifically understood and agreed that options for the acquisition of RRUN common shares issued under the RRUN Stock Option Plan prior to the merger of RRUN and UM shall survive the merger and shall become options for the purchase of UM common shares. By entering into this Agreement, UM elects to assume such treatment of all RRUN options as set forth in subsection 7(m) of the RRUN Stock Option Plan. The number of UM common shares an option holder shall be entitled to purchase and the exercise price per share shall be as adjusted pursuant to subsection 4(b) of the RRUN Stock Option Agreements. (b) Upon execution hereof or as soon thereafter as practical, all the current shareholders of UM shall tender their share certificates, along with a duly executed stock power or power of attorney, to UM for cancellation. Section 3.4 Events Prior to Closing. (a) Upon execution hereof or as soon thereafter as practical, management of RRUN and UM shall execute, acknowledge and deliver (or shall cause to be executed, acknowledged and delivered) any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered, together with such other items as may be reasonably requested by the parties hereto and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby, subject only to the conditions to Closing referenced hereinbelow. (b) Upon execution hereof or as soon thereafter as practical, all the current shareholders of RRUN shall tender their share certificates, along with a duly executed stock power, to UM for cancellation. Section 3.5 Closing. The closing of the transaction contemplated by this Agreement shall be as of the date in which (i) each party hereto has executed this Agreement; and (ii) all of the shareholders of RRUN have approved the terms of this Agreement; and (iii) all conditions to Closing referenced hereinabove, as well as in Articles V and VI below, have been satisfied or waived by the appropriate party and all documentation referenced herein is delivered to the respective party herein, unless a different date is mutually agreed to in writing by the parties hereto (the "Closing Date"). Section 3.6 Termination. (a) This Agreement may be terminated by the board of directors of either RRUN or UM at any time prior to the Closing Date if: (i) there shall be any action or proceeding before any court or any governmental body which shall seek to restrain, prohibit or invalidate the transactions contemplated by this Agreement and which, in the judgment of such board of directors, made in good faith and based on the advice of its legal counsel, makes it inadvisable to proceed with the exchange contemplated by this Agreement; or (ii) any of the transactions contemplated hereby are disapproved by any regulatory authority whose approval is required to consummate such transactions; or (iii) the conditions described in Articles V or VI, below, as applicable, have not been satisfied in full. In the event of termination pursuant to this subparagraph (a) of this Section 3.6, no obligation, right, or liability shall arise hereunder and each party shall bear all of the expenses incurred by it in connection with the negotiation, drafting and execution of this Agreement and the transactions herein contemplated. (b) This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of UM if RRUN shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of RRUN contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days' written notice thereof is given to RRUN. If this Agreement is terminated pursuant to this subparagraph (b) of this Section 3.6, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder. (c) This Agreement may be terminated at any time prior to the Closing Date by action of the board of directors of RRUN if UM shall fail to comply in any material respect with any of its covenants or agreements contained in this Agreement or if any of the representations or warranties of UM contained herein shall be inaccurate in any material respect, which noncompliance or inaccuracy is not cured after 20 days written notice thereof is given to UM. If this Agreement is terminated pursuant to this subparagraph (c) of Section 3.6, this Agreement shall be of no further force or effect and no obligation, right or liability shall arise hereunder. Section 3.7 Directors of UM. Upon the Closing, the present members of UM' s Board of Directors shall tender their resignations seriatim so that the following persons are appointed directors of UM in accordance with procedures set forth in the UM bylaws: Ray Hawkins, Edwin Kwong and Saya Kyvrikosaios. Each director shall hold office until his successor shall have been duly elected and shall have qualified or until his or her earlier death, resignation or removal. Section 3.8 Officers of UM. Upon the Closing, the present officers of UM shall tender their resignations and simultaneous therewith, the following persons shall be elected as officers of UM in accordance with procedures set forth in the UM bylaws: NAME OFFICE ---- ------ Ray Hawkins President Edwin Kwong Secretary, Treasurer ARTICLE IV SPECIAL COVENANTS Section 4.1 Access to Properties and Records. RRUN and UM will each afford to the officers and authorized representatives of the other full access to the properties, books and records of RRUN and UM, as the case may be, in order that each may have full opportunity to make such reasonable investigation as it shall desire to make of the affairs of the other and each will furnish the other with such additional financial and operating data and other information as to the business and properties of RRUN and UM, as the case may be, as the other shall from time to time reasonably request. Section 4.2 Availability of Rule 144. Each of the parties acknowledge that the stock of UM to be issued pursuant to this Agreement will be "restricted securities," as that term is defined in Rule 144 and/or Regulation S as promulgated pursuant to the Securities Act. UM is under no obligation to register such shares under the Securities Act, or otherwise. Notwithstanding the foregoing, however, following the Closing Date, UM will use its best efforts to: (a) make publicly available on a regular basis not less than semi-annually, business and financial information regarding UM so as to make available to the shareholders of UM the provisions of Rule 144 pursuant to subparagraph (c)(2) thereof; and (b) within ten (10) days of any written request of any stockholder of UM, UM will provide to such stockholder written confirmation of compliance with such of the foregoing subparagraph as may then be applicable. The stockholders of UM holding restricted securities of UM as of the date of this Agreement and their respective heirs, administrators, personal representatives, successors and assigns, are intended third party beneficiaries of the provisions set forth herein. The covenants set forth in this Section 4.2 shall survive the Closing and the consummation of the transactions herein contemplated. Section 4.3 Information for UM Public Reports. RRUN will furnish UM with all information concerning RRUN and the RRUN Stockholders, including all financial statements, required for inclusion in any registration statement or public report intended to be filed by UM pursuant to the Securities Act, the Exchange Act, or any other applicable federal or state law. RRUN covenants that all information so furnished for either such registration statement or other public release by UM, including the financial statements described in Section 1.4, shall be true and correct in all material respects without omission of any material fact required to make the information stated not misleading. Section 4.4 Special Covenants and Representations Regarding the UM Common Shares to be Issued in the Exchange. The consummation of this Agreement, including the issuance of the UM Common Shares to the stockholders of RRUN as contemplated hereby, constitutes the offer and sale of securities under the Securities Act, and applicable state statutes. Such transaction shall be consummated in reliance on exemptions from the registration and prospectus delivery requirements of such statutes which depend, inter alia, upon the circumstances under which the RRUN stockholders acquire such securities. In connection with reliance upon exemptions from the registration and prospectus delivery requirements for such transactions, at the Closing, RRUN shall cause to be delivered, and the RRUN stockholders shall deliver to UM, the investment letter referenced in Section 3.1. Section 4.5 Third Party Consents. RRUN and UM agree to cooperate with each other in order to obtain any required third party consents to this Agreement and the transactions herein contemplated. Section 4.6 Actions Prior to Closing. (a) From and after the date of this Agreement until the Closing Date and except as set forth in the RRUN or UM Schedules or as permitted or contemplated by this Agreement, the parties hereto will each use its best efforts to: (i) carry on its business in substantially the same manner as it has heretofore; (ii) maintain and keep its properties in states of good repair and condition as at present, except for depreciation due to ordinary wear and tear and damage due to casualty; (iii) maintain in full force and effect insurance comparable in amount and in scope of coverage to that now maintained by it; (iv) perform in all material respects all of its obligations under material contracts, leases and instruments relating to or affecting its assets, properties and business; (v) maintain and preserve its business organization intact, retain its key employees and maintain its relationship with its material suppliers and customers; and (vi) fully comply with and perform in all material respects all obligations and duties imposed on it by all provincial, federal and state laws and all rules, regulations and orders imposed by provincial, federal or state governmental authorities. (vii) utilize its best efforts in order to establish and/or maintain a trading market for UM' s Common Stock on a US over the counter market. (b) From and after the date of this Agreement until the Closing Date, neither RRUN nor UM will, without the prior consent of the other party: (i) except as otherwise specifically set forth herein, make any change in their respective articles of incorporation or bylaws; (ii) declare or pay any dividend on its outstanding shares of capital stock, except as may otherwise be required by law, or effect any stock split or otherwise change its capitalization, except as provided herein; (iii) enter into or amend any employment, severance or similar agreements or arrangements with any directors or officers; (iv) grant, confer or award any options, warrants, conversion rights or other rights not existing on the date hereof to acquire any shares of its capital stock; or (v) purchase or redeem any shares of its capital stock, except as disclosed herein. Section 4.7 Indemnification. (a) RRUN hereby agrees to indemnify UM and each of the officers, agents and directors of UM as of the date of execution of this Agreement against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy by RRUN appearing in or misrepresentation made in this Agreement. The indemnification provided for in this paragraph shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for a period of 18 months. (b) UM and its officers and directors hereby agree to indemnify RRUN and each of the officers, agents, directors and current shareholders of RRUN as of the Closing Date against any loss, liability, claim, damage or expense (including, but not limited to, any and all expense whatsoever reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened or any claim whatsoever), to which it or they may become subject arising out of or based on any inaccuracy appearing in or misrepresentation made in this Agreement and particularly the representation regarding no liabilities referred to in Section 2.4(b). The indemnification provided for in this Section shall survive the Closing and consummation of the transactions contemplated hereby and termination of this Agreement for a period of 18 months. ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF UM The obligations of UM under this Agreement are subject to the satisfaction, at or before the Closing Date, of the following conditions: Section 5.1 Accuracy of Representations. The representations and warranties made by RRUN in this Agreement were true when made and shall be true at the Closing Date with the same force and effect as if such representations and warranties were made at the Closing Date (except for changes therein permitted by this Agreement), and RRUN shall have performed or complied with all covenants and conditions required by this Agreement to be performed or complied with by RRUN prior to or at the Closing. UM shall be furnished with a certificate, signed by a duly authorized officer of RRUN and dated the Closing Date, to the foregoing effect. Section 5.2 Stockholder Approval The stockholders of RRUN shall have approved this Agreement and the transactions contemplated thereby. Section 5.3 Officer's Certificate. UM shall have been furnished with a certificate dated the Closing Date and signed by a duly authorized officer of RRUN to the effect that: (a) the representations and warranties of RRUN set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Closing Date; (b) RRUN has performed all covenants, satisfied all conditions, and complied with all other terms and provisions of this Agreement to be performed, satisfied or complied with by it as of the Closing Date; (c) since the date of RRUN' s audited Balance Sheet of November 15, 2000, there has not been any materially adverse change in the business, prospects, properties or financial condition of RRUN; (d) since such date and other than as previously disclosed to UM, RRUN has not entered into any material transaction other than transactions which are usual and in the ordinary course of its business; and (e) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of RRUN, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the RRUN Schedules, by or against RRUN which might result in any material adverse change in any of the assets, properties, business or operations of RRUN. Section 5.4 No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of RRUN. Section 5.5 Other Items. UM shall have received such further documents, certificates or instruments relating to the transactions contemplated hereby as UM may reasonably request. ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF RRUN The obligations of RRUN under this Agreement are subject to the satisfaction, at or before the Closing Date (unless otherwise indicated herein), of the following conditions: Section 6.1 Accuracy of Representations. The representations and warranties made by UM in this Agreement were true when made and shall be true as of the Closing Date (except for changes therein permitted by this Agreement) with the same force and effect as if such representations and warranties were made at and as of the Closing Date, and UM shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by UM prior to or at the Closing. RRUN shall have been furnished with a certificate, signed by a duly authorized executive officer of UM and dated the Closing Date, to the foregoing effect. Section 6.2 Officer's Certificate. RRUN shall be furnished with a certificate dated the Closing Date and signed by a duly authorized officer of UM to the effect that: (a) the representations and warranties of UM set forth in the Agreement and in all Exhibits, Schedules and other documents furnished in connection herewith are in all material respects true and correct as if made on the Closing Date; (b) UM has performed all covenants, satisfied all conditions, and complied with all other terms and provisions of the Agreement to be performed, satisfied or complied with by it as of the Closing Date; (c) since the date of UM's unaudited Balance Sheet of September 30, 2000, there has not been any materially adverse change in the business, prospects, properties or financial condition of UM; (d) since such date, UM has not entered into any material transaction other than transactions which are usual and in the ordinary course of its business; and (e) no litigation, proceeding, investigation or inquiry is pending or, to the best knowledge of UM, threatened, which might result in an action to enjoin or prevent the consummation of the transactions contemplated by this Agreement or, to the extent not disclosed in the UM Schedules, by or against UM which might result in any material adverse change in any of the assets, properties, business or operations of UM. Section 6.3 No Material Adverse Change. Prior to the Closing Date, there shall not have occurred any material adverse change in the financial condition, business or operations of nor shall any event have occurred which, with the lapse of time or the giving of notice, may cause or create any material adverse change in the financial condition, business or operations of UM. Section 6.4 Additional Conditions to Closing. In addition to the obligations contained herein, UM's shareholders shall adopt and approve amendments to the UM Articles of Incorporation, changing the name of UM to "RRUN Ventures Inc." (or such other name as may be available and acceptable to management of RRUN). Section 6.5 Compliance with Reporting Requirements. As of the Closing Date, UM shall be current in and in compliance with all requirements of all filings required to be tendered to the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Section 6.6 Other Items. RRUN shall have received such further documents, certificates, or instruments relating to the transactions contemplated hereby as RRUN may reasonably request. ARTICLE VII MISCELLANEOUS Section 7.1 Brokers and Finders. Except as stated in Schedule 7.1, each party hereto hereby represents and warrants that it is under no obligation, express or implied, to pay certain finders in connection with the bringing of the parties together in the negotiation, execution, or consummation of this Agreement. The parties each agree to indemnify the other against any claim by any third person not listed in Schedule 7.1 for any commission, brokerage or finder's fee or other payment with respect to this Agreement or the transactions contemplated hereby based on any alleged agreement or understanding between the indemnifying party and such third person, whether express or implied from the actions of the indemnifying party. Section 7.2 Law, Forum and Jurisdiction. This Agreement shall be construed and interpreted in accordance with the laws of the State of Nevada. Section 7.3 Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if personally delivered to it or sent by registered mail or certified mail, postage prepaid, or by prepaid telegram addressed as follows: If to RRUN: 62 W.8th Avenue Vancouver, BC V5Y 1M7 Canada If to UM: Suite 104, 1456 St. Paul St. Kelowna British Columbia, Canada V1Y 2E6 or such other addresses as shall be furnished in writing by any party in the manner for giving notices hereunder, and any such notice or communication shall be deemed to have been given as of the date so delivered, mailed, or telegraphed. Section 7.4 Attorneys' Fees. In the event that any party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the breaching party or parties shall reimburse the non-breaching party or parties for all costs, including reasonable attorneys' fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein. Section 7.5 Confidentiality. Each party hereto agrees with the other parties that, unless and until the reorganization contemplated by this Agreement has been consummated, they and their representatives will hold in strict confidence all data and information obtained with respect to another party or any subsidiary thereof from any representative, officer, director or employee, or from any books or records or from personal inspection, of such other party, and shall not use such data or information or disclose the same to others, except: (i) to the extent such data is a matter of public knowledge or is required by law to be published; and (ii) to the extent that such data or information must be used or disclosed in order to consummate the transactions contemplated by this Agreement. Section 7.6 Schedules; Knowledge. Each party is presumed to have full knowledge of all information set forth in the other party's Schedules delivered pursuant to this Agreement. Section 7.7 Third Party Beneficiaries. This contract is solely among RRUN and UM and, except as specifically provided, no director, officer, stockholder, employee, agent, independent contractor or any other person or entity shall be deemed to be a third party beneficiary of this Agreement. Section 7.8 Entire Agreement This Agreement represents the entire agreement between the parties relating to the subject matter hereof. This Agreement alone fully and completely expresses the agreement of the parties relating to the subject matter hereof. There are no other courses of dealing, understandings, agreements, representations or warranties, written or oral, except as set forth herein. This Agreement may not be amended or modified, except by a written agreement signed by all parties hereto. Section 7.9 Survival; Termination. Except as otherwise provided herein, the representations, warranties and covenants of the respective parties shall survive the Closing Date and the consummation of the transactions herein contemplated. Section 7.10 Counterparts Facsimile Execution. For purposes of this Agreement, a document (or signature page thereto) signed and transmitted by facsimile machine or telecopier is to be treated as an original document. The signature of any party thereon, for purposes hereof, is to be considered as an original signature, and the document transmitted is to be considered to have the same binding effect as an original signature on an original document. At the request of any party, a facsimile or telecopy document is to be re-executed in original form by the parties who executed the facsimile or telecopy document. No party may raise the use of a facsimile machine or telecopier machine as a defense to the enforcement of the Agreement or any amendment or other document executed in compliance with this Section. Section 7.11 Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing. At any time prior to the Closing Date, this Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended. Section 7.12 Incorporation of Recitals. All of the recitals hereof are incorporated by this reference and are made a part hereof as though set forth at length herein. Section 7.13 Expenses. Each party herein shall bear all of their respective costs and expenses incurred in connection with the negotiation of this Agreement and in the consummation of the transactions provided for herein and the preparation therefore. Section 7.14 Headings; Context. The headings of the sections and paragraphs contained in this Agreement are for convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meaning of this Agreement. Section 7.15 Benefit. This Agreement shall be binding upon and shall inure only to the benefit of the parties hereto, and their permitted assigns hereunder. This Agreement shall not be assigned by any party without the prior written consent of the other party. Section 7.16 Public Announcements. Except as may be required by law, neither party shall make any public announcement or filing with respect to the transactions provided for herein without the prior consent of the other party hereto. Section 7.17 Severability. In the event that any particular provision or provisions of this Agreement or the other agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law, governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements, which shall continue in full force and effect and be binding upon the respective parties hereto. Section 7.18 Failure of Conditions; Termination. In the event any of the conditions specified in this Agreement shall not be fulfilled on or before the Closing Date, either of the parties have the right either to proceed or, upon prompt written notice to the other, to terminate and rescind this Agreement without liability to any other party. The election to proceed shall not affect the right of such electing party reasonably to require the other party to continue to use its efforts to fulfill the unmet conditions. Section 7.19 No Strict Construction. The language of this Agreement shall be construed as a whole, according to its fair meaning and intendment, and not strictly for or against either party hereto, regardless of who drafted or was principally responsible for drafting the Agreement or terms or conditions hereof Section 7.20 Execution Knowing and Voluntary. In executing this Agreement, the parties severally acknowledge and represent that each: (a) has fully and carefully read and considered this Agreement; (b) has been or has had the opportunity to be fully apprised by its attorneys of the legal effect and meaning of this document and all terms and conditions hereof; and (c) is executing this Agreement voluntarily, free from any influence, coercion or duress of any kind. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers, hereunto duly authorized, and entered into as of the date first above written. United Management, Inc., a Nevada RRUN Ventures Inc., a Nevada corporation corporation /s/ Christine Cerisse /s/ Ray Hawkins - --------------------------------- ---------------------------------------- Christine Cerisse Ray Hawkins Its: President Its: President EXHIBIT "A" ---------------------- FORM OF INVESTMENT LETTERS -------------------- EXHIBIT "A" INVESTMENT LETTER ____________, 2000 United Management, Inc. Gentlemen: The undersigned herewith deposits certificate(s) for shares of common stock of RRUN Ventures Inc., a Nevada corporation, ("RRUN"), as described below (endorsed, or having executed stock powers attached) in acceptance of and subject to the terms and conditions of that certain Agreement and Plan of Reorganization (the "Agreement"), between United Management, Inc., a Nevada corporation ("UM" or the "Company") and RRUN, dated December 18, 2000, receipt of which is hereby acknowledged, in exchange for shares of Common Stock of UM (the "Exchange Shares"). If any condition precedent to the Agreement is not satisfied within the relevant time parameters established in Agreement (or any extension thereof), the certificate(s) are to be returned to the undersigned. The undersigned hereby represents, warrants, covenants and agrees with you that, in connection with the undersigned's acceptance of the Exchange Shares and as of the date of this letter: 1. The undersigned is aware that his, her or its acceptance of the Exchange Shares is irrevocable, absent an extension of the Expiration Date of any material change to any of the terms and conditions of the Agreement. 2. The undersigned warrants full authority to deposit all shares referred to above and UM will acquire a good and unencumbered title thereto. 3. The undersigned has full power and authority to enter into this Agreement and that this Agreement constitutes a valid and leg ally binding obligation of the undersigned. 4. By execution hereof, the undersigned hereby confirms that the UM common stock to be received in exchange for RRUN common stock (the "Securities"), will be acquired for investment for the undersigned's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the undersigned has no present intention of selling, granting any participation in, or otherwise distributing the same. By execution hereof, the undersigned further represents the undersigned does not have any - -------------- ___________, 2000 Page 2 contract, undertaking, agreement or arrangement with any third party, with respect to any of the Securities. 5. The undersigned understands that the Securities are being issued pursuant to available exemption thereto and have not been registered under the Securities Act of 1933, as amended (the "1933 Act"), or under any state securities laws. The undersigned understands that no registration statement has been filed with the United States Securities and Exchange Commission nor with any other regulatory authority and that, as a result, any benefit which might normally accrue to a holder such as the undersigned by an impartial review of such a registration statement by the Securities and Exchange Commission or other regulatory authority will not be forthcoming. The undersigned understands that he/she/it cannot sell the Securities unless such sale is registered under the 1933 Act and applicable state securities laws or exemptions from such registration become available, In this connection the undersigned understands that the Company has advised the Transfer Agent for the Common Shares to be issued to US residents that the Securities are "restricted securities" under the 1933 Act and that they may not be transferred by the undersigned to an person without the prior consent of the Company, which consent of the Company will require an opinion of counsel to the effect that, in the event the Securities are not registered under the 1933 Act, any transfer as may be proposed by the undersigned must be entitled to an exemption from the registration provisions of the 1933 Act. To this end, the undersigned acknowledges that a legend to the following effect will be placed upon the certificate representing the Securities and that the Transfer Agent has been advised of such facts: THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, ANT) MAY BE OFFERED AND SOLD ONLY IF REGISTERED PURSUANT TO THE PROVISIONS OF THE ACT OR IF AN EXEMPTION FROM REGISTRATION THEREUNDER IS AVAILABLE, THE AVAILABILITY OF WHICH MUST BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY. The undersigned understands that the foregoing legend on his/her its certificate for the Common Shares limits their value, including their value as collateral. (The Balance of this Page Intentionally Left Blank) - -------------------- ______________, 2000 Page 3 In Witness Whereof, the undersigned has duly executed this Investment Letter as of the date indicated hereon. Dated: ______________, 2000 Very truly yours, - ----------------------------------------------- (signature) - ----------------------------------------------- (print name in full) - ----------------------------------------------- (street address) - ----------------------------------------------- (city, state, zip) - ----------------------------------------------- (social security number or employer identification number)