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EXHIBIT 2.1
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT AND
PLAN OF MERGER
UNICO INC.,
UNITED MARKETING SOLUTIONS INC.,
NEXT GENERATION MEDIA CORP. and
UNITED MARKETING MERGER CORP.
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AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
THIS AMENDED AND RESTATED STOCK PURCHASE AGREEMENT (the "Agreement") is
dated the 30th day of December, 1998, among UNICO, INC., a Delaware corporation
("Seller"), UNITED MARKETING SOLUTIONS INC., a Virginia corporation formerly
known as United Coupon Corporation ("UMSI"), NEXT GENERATION MEDIA CORP., a
Nevada corporation ("Buyer"), and UNITED MARKETING MERGER CORP., a Virginia
corporation ("Newco").
RECITALS
A. Seller owns 100% of the issued and outstanding shares of the
capital stock of UMSI.
B. Seller desires to sell, and Buyer desires to purchase, all of
Seller's shares of capital stock of UMSI, for the consideration
and upon the terms and subject to the conditions hereinafter set
forth.
C. The parties desire that Newco shall be merged with and into UMSI
(said transaction being hereinafter referred to as the "Merger")
pursuant to a plan of merger substantially in the form set forth
in Annex A hereto (the "Plan of Merger").
D. The parties desire to provide for certain undertakings,
conditions, representations, warranties and covenants in
connection with the transactions contemplated hereby.
E. The parties executed a Stock Purchase Agreement dated as of May 8,
1998 (the "Prior Agreement") and, since the date of the execution
of the Prior Agreement, certain events have occurred that have
rendered the Prior Agreement no longer reflective of the parties'
desired method of consummating the Merger.
F. In light of the changes in circumstances and the desire among the
parties to amend the Prior Agreement, the parties have executed
this Agreement to provide for a more rapid conclusion of the
transactions contemplated in the Prior Agreement and in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other
consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:
1. Purchase and Sale of Stock and Merger.
1.1. Agreement to Purchase and Sell. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date (as defined below),
Seller shall sell to Buyer, and Buyer shall purchase from Seller, 1 share of
common stock (the "UMSI Shares"), par value $20.00, of UMSI ("UMSI Common")
representing 100% of the issued and outstanding capital stock of UMSI.
1.2. Purchase Price. In exchange for the UMSI Shares,
Buyer agrees to pay the Seller the purchase price in the form of (a) $172,664.50
in cash (the "Merger Consideration") which is equal to $0.10 multiplied by the
number of shares of Unico Common Stock, par value $0.01 per share ("Unico
Common") held by the holders of Unico Common ("Unico Common Holders") other than
either T.C. Equities Ltd. or Next Generation Media Corp., (b) forgiveness of
indebtedness in the amount of $175,500.00 owed by Seller to Buyer pursuant to
Section 6.15.1 hereof (the "Debt Forgiveness"), and (c) $164,000.00 cash (the
"Debt Pay-Off Consideration," and, together with the Merger Consideration and
the Debt Forgiveness, the "Purchase Price") for the
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payment of debts of Seller to the extent that creditors of Seller (other than
BancFirst, an Oklahoma banking corporation ("BancFirst")) do not consent to the
assignment of such debt by Seller, the assumption of such debt by Buyer and the
release of Seller in respect of such debt by such creditor.
1.3. Payment of Purchase Price. The Purchase Price shall be payable as
follows:
1.3.1. Buyer shall pay to the Seller the Merger Consideration upon
the Closing (as defined herein).
1.3.2. Buyer shall pay Seller the Debt Pay-Off Consideration at
Closing.
1.4. Closing. The closing of the purchase and sale of the UMSI Shares
(the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Washington, D.C., as soon after the vote of the shareholders of Seller as is
practicable (such date, the "Closing Date").
1.5. Merger. UMSI and Newco are constituent corporations (the
"Constituent Corporations") to the Merger as contemplated by the Virginia Stock
Corporation Act, as amended (the "VSCA"). At the Effective Time (as defined
herein):
1.5.1. Newco shall be merged with and into UMSI in accordance with
the applicable provisions of the VSCA, with UMSI being the surviving corporate
entity (the "Surviving Corporation").
1.5.2. The separate existence of Newco shall cease, and the Merger
shall in all respects have the effect provided for in subsection 1.8.
1.5.3. The Articles of Incorporation of UMSI at the Effective Time
shall become the Articles of Incorporation of the Surviving Corporation.
1.5.4. The bylaws of UMSI at the Effective Time shall become the
bylaws of the Surviving Corporation.
1.6. Filing; Plan of Merger. The Merger shall not become effective
unless this Agreement and the Plan of Merger are duly adopted by the respective
boards of directors of the Constituent Corporations and approved by shareholders
holding the requisite number of shares of Seller and each of the Constituent
Corporations. Upon fulfillment or waiver of the conditions in Section 5 and
provided that this Agreement has not been terminated pursuant to Section 6.2,
the Constituent Corporations will cause the Plan of Merger to be certified,
executed, acknowledged and filed with the Virginia Corporation Commission as
provided in the VSCA. The Plan of Merger is incorporated herein by reference,
and adoption of this Agreement by the Boards of Directors of the Constituent
Corporations and approval by the shareholders of the Constituent Corporations
and of Seller shall constitute adoption and approval of the Plan of Merger.
1.7. Effective Time. The Merger shall be effective at the day and hour
specified in the Articles of Merger (including the Plan of Merger) filed with
the Virginia Corporation Commission (the "Effective Time").
1.8. Effect of Merger. From and after the Effective Time, the Merger
shall have the effect described in the VSCA. At the Effective Time, by virtue of
the Merger and without any action on the part of Constituent Corporations, each
share of the common stock of Newco issued and outstanding immediately prior to
the Effective Time shall no longer be issued and outstanding, and each share of
the UMSI Common issued and outstanding immediately prior to the Effective Time
shall continue to be issued and outstanding. The Surviving
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Corporation shall become, by virtue of the Merger and without any action on the
part of the Constituent Corporations, a wholly-owned subsidiary of Buyer.
2. Representations and Warranties of Seller and UMSI. Seller and UMSI each
represents and warrants to Buyer as follows:
2.1. Capital Structure, Organization, Standing and Authority. The
authorized capital stock of Seller consists of 20,000,000 shares of Unico
Common, par value $0.01 per share, and 5,000,000 shares of Preferred Stock, par
value $0.01 per share ("Unico Preferred") of which Seller has one designated
series (the "Unico Series C Preferred"). No other classes of capital stock of
Seller are authorized. As of the date hereof, 5,631,817 shares of Unico Common
and no other shares of capital stock of Seller are issued and outstanding. (The
428,185 shares of Unico Series C Preferred stock converted at a ratio of 1:4 to
common stock as of August 1, 1998.) All outstanding shares of Unico Common have
been duly authorized and are validly issued, fully paid and nonassessable.
Except as set forth on Schedule 2.1 of the Prior Agreement, Seller has no
warrants, options, rights, convertible securities and other arrangements or
commitments that obligate it to issue or dispose of any of its capital stock or
other ownership interests, and stock appreciation rights, performance units and
similar stock-based rights whether or not they obligate the issuer thereof to
issue stock, or other securities or to pay cash (collectively, "Rights")
authorized, issued or outstanding with respect to the capital stock of Seller.
Holders of Unico Common do not have preemptive rights. Seller is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware with full corporate power and authority to carry on its
business in any other state of the United States or foreign jurisdiction where
such failure would have a material adverse effect on the financial condition,
results of operations, business or business prospects of Seller.
2.2. Authorization; Validity and Effect of Transaction Documents. The
execution and delivery of this Agreement and all other Transaction Documents (as
defined herein) by Seller, and the consummation by it of the transactions
contemplated hereby and thereby (the "Transactions"), have been duly authorized
by all requisite corporate action (subject to receipt of approval of the Unico
Common Holders of this Agreement and the Plan of Merger). This Agreement
constitutes, and all other agreements and documents contemplated hereby (the
"Transaction Documents"), which are to be executed and delivered by Seller, when
executed and delivered pursuant hereto, will constitute the valid and legally
binding obligations of Seller, enforceable in accordance with their respective
terms (subject to receipt of approval of the Seller's shareholders of this
Agreement and the Plan of Merger). The execution and delivery of this Agreement
and any other Transaction Document does not, and the consummation of the
Transactions will not: (i) require the consent of any third party (other than
the approval of the Seller's shareholders of this Agreement and the Plan of
Merger and the consent of BancFirst), (ii) violate any statute or law or any
rule, regulation, order, writ, injunction, arbitration award, or decree of any
court, administrative or governmental agency, instrumentality, commission,
authority, board or other body (a "Governmental Authority") or require any
authorization, consent, approval, exemption or other action by or notice to any
Governmental Authority; (iii) result in the breach of any term or provision of,
or constitute a default under, or result in the acceleration of or entitle any
party to accelerate (whether after the giving of notice or the lapse of time or
both) any obligation under, or result in the creation or imposition of any lien,
charge, pledge, security interest, encumbrance, assessment or adverse claim (a
"Lien") upon any part of the property of Seller pursuant to any provision of,
any material contract, indenture, mortgage, lease, license, Lien, or other
agreement or instrument to which Seller is a party or by which it is bound, or
(iv) violate or conflict with any provision of the bylaws or articles of
incorporation of the Seller as amended to the date of this Agreement.
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2.3. Ownership of Subsidiary. Seller's sole operating subsidiary is
UMSI, a Delaware corporation. The authorized capital stock of UMSI
consists of 100 shares of UMSI Common, par value $20.00 per share.
No other classes of capital stock of UMSI are authorized. As of
the date hereof, one share of UMSI Common is issued and
outstanding, and no other shares of capital stock of UMSI are
issued and outstanding. All outstanding shares of UMSI Common have
been duly authorized and are validly issued, fully paid and
nonassessable. No shares of capital stock have been reserved for
any purpose. UMSI has no Rights authorized, issued or outstanding
with respect to the capital stock of UMSI. Seller is the sole
holder of 100% of the issued and outstanding capital stock of
UMSI, free and clear of all Liens, encumbrances, charges,
defaults, pledges or equitable interests other than the Lien of
BancFirst. UMSI is a corporation duly incorporated, validly
existing and in good standing under the laws of the Commonwealth
of Virginia with full corporate power and authority to carry on
its business as it is currently being conducted in any other state
of the United States or foreign jurisdiction where such failure
would have a material adverse effect on the financial condition,
results of operations, business or business prospects of UMSI.
2.4. Authorization; Validity and Effect of Transaction Documents -
UMSI. The execution and delivery of this Agreement and all other Transaction
Documents by UMSI, and the consummation by it of the Transactions have been duly
authorized by all requisite corporate action. This Agreement and the Transaction
Documents which are to be executed and delivered by UMSI, when executed and
delivered pursuant hereto, will constitute the valid and legally binding
obligations of UMSI, enforceable in accordance with their respective terms
(subject to receipt of approval of the Unico Common Holders of this Agreement
and the Plan of Merger). The execution and delivery of this Agreement and any
other Transaction Document does not, and the consummation of the Transactions
will not: (i) require the consent of any third party (other than the approval of
Seller's shareholders of this Agreement and the Plan of Merger and the consent
of BancFirst), (ii) violate any statute or law or any rule, regulation, order,
writ, injunction, arbitration award, or decree of any Governmental Authority or
require any authorization, consent, approval, exemption or other action by or
notice to any Governmental Authority; (iii) result in the breach of any term or
provision of, or constitute a default under, or result in the acceleration of or
entitle any party to accelerate (whether after the giving of notice or the lapse
of time or both) any obligation under, or result in the creation or imposition
of any Lien upon any part of the property of UMSI pursuant to any provision of,
any material contract, indenture, mortgage, lease, license, Lien, or other
agreement or instrument to which UMSI is a party or by which it is bound, or
(iv) violate or conflict with any provision of the bylaws or articles of
incorporation of UMSI as amended to the date of this Agreement.
2.5. Assets and Contract Rights. Seller has no significant assets other
than the UMSI Shares and its contract rights pursuant to this Agreement and the
other Transaction Documents.
2.6. Litigation. Other than as provided in Schedule 2.6 of the Prior
Agreement as updated herewith, there are no actions, suits, investigations,
inquiries or other proceedings with respect to Seller or UMSI involving claims
by or against Seller or UMSI which are pending or threatened against any such
entity, at law or in equity, or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality regarding Seller's ownership of the UMSI Shares, Seller's
business or UMSI's business.
2.7. Interested Party Transactions. No current or former officer,
director, or shareholder of Seller, or any family member of any such natural
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person: (a) is owed or will be owed any debt by UMSI, either directly or
indirectly; (b) is indebted or will be indebted to UMSI; or (c) is, directly or
indirectly, interested in any contract of UMSI or any other entity now owning or
which has owned in the past calendar year any assets of UMSI, other than ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in respect of whom UMSI has executed an employment agreement and
an indemnification in connection with a line of credit established for the
benefit of UMSI.
2.8. Securities Filings; Statements True.
2.8.1. Seller has timely filed all reports, proxy statements,
registration statements and all similar documents (the
"Securities Documents") filed, or required to be filed,
pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended,
the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Securities and Exchange Commission
(the "SEC") promulgated thereunder (collectively, the
"Securities Laws") since January 1, 1995, with the
exception of Seller's annual report on Form 10-K for fiscal
year 1997 that was filed with the SEC on April 16, 1998.
Seller has provided to Buyer a true and complete copy of
each Securities Document filed by Seller with the SEC that
Seller was required to file during such period. As of their
respective dates of filing, such Securities Documents
complied with the Securities Laws as then in effect, and
did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading.
2.8.2. The consolidated balance sheets of Seller as of December
31, 1997, 1996 and 1995, and the related consolidated statements of income,
shareholders' equity and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1997, 1996 and 1995, as
filed by Seller in Securities Documents and the consolidated balance sheets of
Seller (including related notes and schedules, if any) and the related
consolidated statements of income, changes in shareholders' equity and cash
flows (including related notes and schedules, if any) including in Securities
Documents filed by Seller with respect to periods ended subsequent to December
31, 1997 (collectively, the "Financial Statements") fairly present or will
fairly present, as the case may be, the consolidated financial position of
Seller and UMSI as of the dates indicated and the consolidated results of
operations, changes in shareholders' equity and statements of cash flows for the
periods then ended (subject, in the case of unaudited interim statements, to the
absence of notes and to normal year-end audit adjustments that are not material
in amount or effect) in conformity with U.S. generally accepted accounted
principles on a consistent basis.
2.8.3. No statement, certificate, instrument or other writing
furnished or to be furnished hereunder by Seller or UMSI contains or will
contain any untrue statement of material fact or will omit to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
2.9 Adverse Change. Since December 31, 1997, Seller and UMSI have not
incurred any liability except as disclosed in the most recent Seller Financial
Statements, or entered into any transactions with affiliates, in each case other
than in the ordinary course of business consistent with past practices, nor has
there been any adverse change or any event involving a prospective adverse
change in the business, financial condition or results of operations of
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Seller or of UMSI. All liabilities (including contingent liabilities) of Seller
and UMSI are disclosed in the most recent Financial Statements of Seller or were
incurred in the ordinary course of business since the date of Seller's most
recent Financial Statements.
2.10. Loans. All of the loans on the books of Seller and UMSI are valid
and properly documented, and were made in the ordinary course of business.
Neither the terms of such loans, nor any of the loan documentation, nor the
manner in which such loans have been administered and serviced, violates any
federal, state or local law, rule, regulation or ordinance applicable thereto.
Attached at Schedule 2.10 of the Prior Agreement is (a) a summary of all
outstanding material debt obligations of Seller including the name and address
of each creditor, the outstanding principal and interest owed as of the date
hereof and the material terms of such debt obligation, and (b) a copy of written
evidence from BancFirst that BancFirst will not object to the Transactions,
consents to the acquisition of UMSI by Buyer, releases Seller from its
obligations in regard to its debt to BancFirst and agrees to the assumption by
Buyer of such obligations in regard to the debt of Seller to BancFirst.
2.11. Taxes. Other than as described on Schedule 2.11 of the Prior
Agreement, Seller and UMSI have timely filed (or requests for extensions have
been timely filed and any such extensions have been granted and have not
expired) all federal, state and local (and, if applicable, foreign) tax returns
required by applicable law to be filed by them and have paid, or where payment
is not required to have been made, have set up an adequate reserve or accrual
for the payment of, all taxes required to be paid in respect of the period
covered by such returns and will have paid, or where payment is not required to
have been made, will have set up an adequate reserve or accrual for the payment
of, all taxes for any subsequent periods ending on or prior to the Closing Date.
Neither Seller nor UMSI will have any liability for any such taxes in excess of
the amounts so paid or reserves or accruals so established. All federal, state
and local (and, if applicable, foreign) tax returns filed by Seller and UMSI are
complete and accurate. Neither Seller nor UMSI is delinquent in the payment of
any tax, assessment or governmental charge.
2.12. Compliance with Laws. Each of Seller and UMSI is in compliance
with all statutes and regulations, and has obtained and maintained all permits,
licenses and registrations applicable to the conduct of its business, and
neither Seller nor UMSI has received notification (a) asserting a violation or
possible violation of any such statute or regulation, (b) threatening to revoke
any permit, license, registration or other government authorization, or (c)
restricting or in any way limiting its operations.
2.13. No Brokers. Neither Seller nor UMSI has entered into any contract,
arrangement or understanding with any person or firm which may result in the
obligation of Buyer, Seller or UMSI to pay any finder's fees, brokerage or
agent's commissions or other like payments in connection with the negotiations
leading to this Agreement and the other Transaction Documents or the
consummation of the Transactions, and Seller is not aware of any claim or basis
for any claim for payment of any finder's fees, brokerage or agent's commissions
or other like payments in connection with the negotiations leading to this
Agreement and the other Transaction Documents or the consummation of the
Transactions.
2.14. Certain Information. When the proxy statement is mailed, and at
the time of the meeting of Seller's shareholders to vote upon this Agreement and
the Plan of Merger, the proxy statement and all amendments and supplements
thereto, with respect to all information set forth therein provided by Seller,
(a) shall comply with the applicable provisions of the Securities Laws and (b)
shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
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contained therein, in light of the circumstances in which they were made, not
misleading.
2.15. Insurance. Set forth in Schedule 2.15 of the Prior Agreement is a
complete list of insurance policies that Seller maintains with respect to itself
and/or UMSI, together with a copy of the declarations page of each such policy
setting forth, with respect to each policy, the amount and type of coverage,
limits and deductibles, inception and expiration dates and insurance carrier.
Such policies are in full force and effect.
2.16 Employees. Set forth in Schedule 2.16 of the Prior Agreement is an
accurate and complete list of the names of all persons employed by UMSI
("Employees") as of its date, together with the following information with
respect to each Employee: base compensation and department. Except as set forth
in Schedule 2.16, neither Seller nor UMSI has promised or agreed to give any
Employee a pay raise or any additional compensation other than with respect to a
review in the ordinary course of business consistent with past practice.
Schedule 2.16 also sets forth the names of all Employees with whom Seller or
UMSI has entered into an employment agreement and/or a non-compete agreement, as
well as the material terms of any such agreement.
2.17 Employee Benefit Plans; ERISA Compliance. With respect to each
employee benefit plan, as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and every other fringe
benefit, stock option, bonus, incentive compensation, deferred compensation,
excess, supplemental executive compensation, employee stock purchase, vacation,
sickness or disability, severance or separation, restricted stock or other
employee benefit plan, policy or arrangement, whether written or oral,
maintained or contributed to within the last five years by UMSI or by a Common
Control Entity (as defined below) for the benefit of Employees or former
employees or under which UMSI has or may have any liability or obligation (the
"Benefit Plans") maintained by UMSI or any corporation or other trade or
business under common control with UMSI (as determined under Section 414(b) or
(c) of the Code, a "Common Control Entity"): (i) there is no actual or
contingent liability under Title IV of ERISA or the Code to any person or
entity, including the Pension Benefit Guaranty Corporation, the IRS, any such
plan or the participants (or their beneficiaries) in any such plan; (ii) the
assets of UMSI have not been subject to a lien under ERISA or the Code; and
(iii) there is no basis for such liability or the assertion of any such lien
with respect to the assets of UMSI as the result of or after the consummation of
the transactions contemplated by this Agreement. UMSI and each Common Control
Entity has at all times complied with the continuation of coverage requirements
of Section 601 through 609 of ERISA and Section 4980B of the Code ("COBRA"). No
Benefit Plan provides health, dental, life insurance or other welfare benefits
(whether on an insured or self-insured basis) to Employees or former employees
after their retirement or other termination of employment from UMSI (other than
continuation coverage required under COBRA which may be purchased at the sole
expense of the employee or former employee).
2.18. Employee Relations. For the past three years, neither Seller nor
UMSI has engaged in any unfair labor practice with respect to any Employees or
former employees; no unfair labor practice complaint has been brought or is
pending before the National Labor Relations Board with respect to any Employees
or former employees; there has been no labor strike, dispute, slowdown or
stoppage involving any Employees or former employees, nor is there any now
pending or threatened; no representation question has been raised or now exists
respecting Employees or former employees; neither Seller nor UMSI has been
notified of any material grievance, and no arbitration proceeding arising out of
or under any collective bargaining agreement has been brought or is pending with
respect to any Employees or former employees; and neither Seller nor UMSI has
been or is a party to any collective bargaining agreement.
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2.19. Suppliers. Except as set forth in Schedule 2.19, no supplier of
the Seller or UMSI has, in the six months prior to the date hereof, given
written notice to Seller or UMSI to cancel or otherwise terminate or reduce, or
given such notice orally or threatened to cancel, terminate or reduce, its
relationship with Seller or UMSI other than in the ordinary course of business
consistent with past experience.
2.20 Environmental Laws. Neither Seller nor USMI has received any
notification that: Hazardous Materials (as defined below) have been generated,
used, treated or stored at, or transported to or from, any real property used in
UMSI's business; Hazardous Materials have been released or disposed of on any
such property; or Seller or UMSI is not in compliance with applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws with respect to any such property, nor have any of the
foregoing events occurred. There are no pending or threatened claims, suits,
demands, investigations, proceedings or other actions relating to any
Environmental Law with respect to any such property. For purposes of this
Agreement, "Environmental Laws" shall mean any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, permit, policy or order now in
effect and in each case as amended to date and any judicial or administrative
interpretation thereof relating to Hazardous Materials, environmental matters,
the protection of public health and safety from environmental or health concerns
or otherwise relating to environmental conditions; and "Hazardous Materials"
shall mean all hazardous substances, wastes, materials or constituents, solid
wastes, special wastes, toxic substances, pollutants, contaminants, petroleum or
petroleum derived substances or wastes, radioactive materials, urea
formaldehyde, polychlorinated biphenyls, radon gas and related materials,
including, without limitation, any such materials defined, listed, identified
under or described in any Environmental Laws.
2.21. No Misrepresentation or Omission. No representation or warranty by
Seller or UMSI in this Section 2 or in any other section of this Agreement, or
in any certificate or other document furnished or to be furnished by Seller or
UMSI pursuant hereto, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained therein, in light of the circumstances under which they
were made, not misleading.
2.22. Merger Consideration. Seller represents and warrants that it shall
use the Merger Consideration, after payment of any indebtedness not assigned to
and assumed by Buyer for which the creditor shall also release Seller from such
obligation, to pay a special dividend to the holders of its common stock,
provided, however, that Seller shall not pay any portion of such Merger
Consideration to T.C. Equities, Ltd. with respect to common stock of Seller held
by T.C. Equities, Ltd.
The representations and warranties of Seller and UMSI set forth above (other
than in Sections 2.1., 2.2., 2.3., 2.4. and 2.8.) shall survive the Closing for
a period of three years. The representations and warranties of Seller and UMSI
set forth in Sections 2.1., 2.2., 2.3., 2.4. and 2.8.), and the covenants of
Seller and UMSI set forth herein shall survive the Closing indefinitely.
3. Representations and Warranties of Buyer. Buyer and Newco each represents
and warrants to Seller as follows:
3.1. Capital Structure, Organization, Standing and Authority. The
authorized capital stock of Buyer consists of 50,000,000 shares of NexGen
Common, par value $0.01 per share, and 1,000,000 shares of preferred stock, par
value $0.001 per share ("NexGen Preferred") of which Buyer has designated two
series, the "Series A Preferred Stock" and the "Series B Preferred Stock." No
other classes of capital stock of Seller are authorized. As of the date hereof,
3,397,071 shares of NexGen Common, 250,000 shares of Series A Preferred Stock
and 70,000 shares of Series B Preferred Stock are issued and outstanding,
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and no other shares of capital stock of Buyer are issued and outstanding. All
outstanding shares of NexGen Common and NexGen Preferred have been duly
authorized and are validly issued, fully paid and nonassessable. Except as set
forth on Schedule 3.1 of the Prior Agreement, Buyer has no Rights authorized,
issued or outstanding with respect to the capital stock of Buyer other than
certain rights with regard to certain financing transactions relating to this
Agreement attached hereto as Schedule 3.1(A). Holders of NexGen Common do not
have preemptive rights. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Nevada. Newco is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Virginia. Buyer owns all of the issued and
outstanding shares of capital stock of Newco.
3.2. Authorization; Validity and Effect of Transaction Documents. The
execution and delivery of this Agreement and all other Transaction Documents by
each of Buyer and Newco, and the consummation by it of the Transactions, have
been duly authorized by all requisite corporate action. This Agreement
constitutes, and all other Transaction Documents to be executed and delivered by
Buyer, when executed and delivered pursuant hereto, will constitute, the valid
and legally binding obligations of Buyer, enforceable in accordance with their
respective terms. The execution and delivery of this Agreement and the other
Transaction Documents does not, and the consummation of the Transactions will
not, (i) require the consent of any third party, (ii) violate any statute or law
or any rule, regulation, order, writ, injunction, arbitration award or decree of
any Governmental Authority or require any authorization, consent, approval,
exemption or other action by or notice to any Governmental Authority, (iii)
result in the breach of any term or provision of, or constitute a default under,
or result in the acceleration of or entitle any party to accelerate (whether
after the giving of notice or the lapse of time or both) any obligation under,
or result in the creation or imposition of any Lien upon any part of the
property of Buyer pursuant to any provision of, any material contract,
indenture, mortgage, lease, license, Lien, or other agreement or instrument to
which Buyer is a party or by which it is bound, or (iv) violate or conflict with
any provision of the bylaws or articles of incorporation of Buyer, as amended to
the date of this Agreement.
3.3 Investment Intent. Buyer is acquiring the UMSI Shares for Buyer's
own account for investment with no present intention of distributing or
reselling any such Shares with a view to any distribution within the meaning of
the Securities Act, and Buyer will not, directly or indirectly, voluntarily
offer, sell, pledge or otherwise dispose of (or solicit any offers to purchase
or otherwise acquire or take a pledge of) any UMSI Shares, except as
contemplated by the Pledge Agreement, unless (i) registered pursuant to the
provisions of the Securities Act or (ii) an exemption from registration is
available under the Securities Act.
3.4. Litigation. There are no actions, suits, investigations, inquiries
or other proceedings with respect to Buyer or Newco involving claims by or
against Buyer or Newco which are pending or threatened against any such entity,
at law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality
regarding Buyer's or Newco's business.
3.5 Securities Filings; Statements True.
3.5.1. Buyer has filed all Securities Documents filed, or required
to be filed, pursuant to the Securities Laws since February 6, 1997 with the
exception of a quarterly report to be filed for the second quarter of 1998 which
shall be filed together with its quarterly report for the third quarter of 1998
with the SEC prior to the Closing. Buyer has provided or will provide prior to
the Closing to Seller a true and complete copy of each Securities Document filed
by Buyer with the SEC that Buyer was required to file during such period. As of
their respective dates of filing, such Securities Documents
11
complied with the Securities Laws as then in effect, and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.5.2. The consolidated balance sheet of Buyer as of December 31,
1997, and the related consolidated statements of income, shareholders' equity
and cash flows (including related notes and schedules, if any) for the year
ended December 31, 1997, as filed by Buyer in Securities Documents and the
consolidated balance sheets of Buyer (including related notes and schedules, if
any) and the related consolidated statements of income, changes in shareholders'
equity and cash flows (including related notes and schedules, if any) including
in Securities Documents filed by Buyer with respect to periods ended subsequent
to December 31, 1997 (collectively, the "Financial Statements") fairly present
or will fairly present, as the case may be, the consolidated financial position
of Buyer as of the dates indicated and the consolidated results of operations,
changes in shareholders' equity and statements of cash flows for the periods
then ended (subject, in the case of unaudited interim statements, to the absence
of notes and to normal year-end audit adjustments that are not material in
amount or effect) in conformity with U.S. generally accepted accounted
principles on a consistent basis.
3.5.3. No statement, certificate, instrument or other writing
furnished or to be furnished hereunder by Buyer contains or will contain any
untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
3.6 Adverse Change. Since December 31, 1997, Buyer has not incurred
any liability except as disclosed in the most recent Buyer Financial Statements,
or entered into any transactions with affiliates, in each case other than in the
ordinary course of business consistent with past practices, nor has there been
any adverse change or any event involving a prospective adverse change in the
business, financial condition or results of operations of Buyer. All liabilities
(including contingent liabilities) of Buyer are disclosed in the most recent
Financial Statements of Buyer or were incurred in the ordinary course of
business since the date of Buyer's most recent Financial Statements.
3.7. Taxes. Buyer's sole operating subsidiary, Independent News Inc.
("INI"), has timely filed (or requests for extensions have been timely filed and
any such extensions have been granted and have not expired) all federal, state
and local (and, if applicable, foreign) tax returns required by applicable law
to be filed by it and has paid, or where payment is not required to have been
made, has set up an adequate reserve or accrual for the payment of, all taxes
required to be paid in respect of the period covered by such returns and will
have paid, or where payment is not required to have been made, will have set up
an adequate reserve or accrual for the payment of, all taxes for any subsequent
periods ending on or prior to the Closing Date. Buyer will not have any
liability for any such taxes or in excess of the amounts so paid or reserves or
accruals so established. All federal, state and local (and, if applicable,
foreign) tax returns filed by Buyer are complete and accurate. INI and, to the
best of Buyer's knowledge, Buyer are not delinquent in the payment of any tax,
assessment or governmental charge.
3.8. Compliance with Laws. Buyer is in compliance with all statutes and
regulations, and has obtained and maintained all permits, licenses and
registrations applicable to the conduct of its business, and Buyer has not
received notification (a) asserting a violation or possible violation of any
such statute or regulation, (b) threatening to revoke any permit, license,
registration or other government authorization, or (c) restricting or in any way
limiting its operations.
12
3.9. No Brokers. Buyer has not entered into any contract, arrangement
or understanding with any person or firm which may result in the obligation of
Buyer, Seller or UMSI to pay any finder's fees, brokerage or agent's commissions
or other like payments in connection with the negotiations leading to this
Agreement and the other Transaction Documents or the consummation of the
Transactions, and Buyer is not aware of any claim or basis for any claim for
payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement and the
other Transaction Documents or the consummation of the Transactions.
3.10. Certain Information. When the proxy statement is mailed to
Seller's shareholders, and at the time of the meeting of Seller's shareholders
to vote upon this Agreement and the Plan of Merger, the proxy statement and all
amendments and supplements thereto, with respect to all information set forth
therein provided by Buyer (a) shall comply with the applicable provisions of the
Securities Laws and (b) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements contained therein, in light of the circumstances in which
they were made, not misleading.
3.11 Material Contracts. Set forth in Schedule 3.11 of the Prior
Agreement is a list of all material contracts entered into by Buyer since
February 6, 1997 other than those agreements and contracts listed on Schedule
3.1(A) hereto. Buyer has furnished to Seller copies of all material contract
listed on Schedule 3.11 of the Prior Agreement prior to the execution of this
Agreement.
a. INI Acquisition. All obligations of Buyer in connection
with its acquisition of the business of its subsidiary INI shall have been fully
performed and no conditions to such acquisition, either precedent or subsequent,
shall remain unsatisfied.
3.12. Employee Relations. Buyer has not engaged in any unfair labor
practice with respect to any Employees or former employees; no unfair labor
practice complaint has been brought or is pending before the National Labor
Relations Board with respect to any Employees or former employees; there has
been no labor strike, dispute, slowdown or stoppage involving any Employees or
former employees, nor is there any now pending or threatened; no representation
question has been raised or now exists respecting Employees or former employees;
Buyer has not been notified of any material grievance, and no arbitration
proceeding arising out of or under any collective bargaining agreement has been
brought or is pending with respect to any Employees or former employees; and
Buyer has not been or is not a party to any collective bargaining agreement.
3.14. Suppliers. No supplier of the Buyer has, in the six months prior
to the date hereof, given written notice to Buyer to cancel or otherwise
terminate or reduce, or given such notice orally or threatened to cancel,
terminate or reduce, its relationship with Buyer other than in the ordinary
course of business consistent with past experience.
3.15 Environmental Laws. Buyer has not received any notification that:
Hazardous Materials have been generated, used, treated or stored at, or
transported to or from, any real property used in Buyer's business; Hazardous
Materials have been released or disposed of on any such property; or Buyer is
not in compliance with applicable Environmental Laws and the requirements of any
permits issued under such Environmental Laws with respect to any such property,
nor have any of the foregoing events occurred. There are no pending or
threatened claims, suits, demands, investigations, proceedings or other actions
relating to any Environmental Law with respect to any such property.
3.16. No Misrepresentation or Omission. No representation or warranty by
Buyer in this Section 3 or in any other Section of this Agreement, or in any
13
certificate or other document furnished or to be furnished by Buyer pursuant
hereto, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading.
The representations and warranties of Buyer and Newco set forth above (other
than in Sections 3.1., 3.2. and 3.5.) shall survive the Closing for a period of
three years. The representations and warranties of Buyer and Newco set forth in
Sections 3.1., 3.2., and 3.5.), and the covenants of Buyer and Newco set forth
herein shall survive the Closing indefinitely.
4. Other Covenants and Agreements.
4.1. Reserved.
4.2. Reserved.
4.3. Reserved.
4.4. Taxes and Expenses.
4.4.1. Seller covenants and agrees to pay any and all taxes on the
transfer to Buyer of the UMSI Shares. Except as otherwise specifically provided
for in this Agreement, Seller will assume and pay all costs, liabilities and
other obligations incurred by Seller in connection with the performance of and
compliance with all Transactions and other agreements and conditions contained
in this Agreement and the other Transaction Documents to be performed or
complied with by Seller, including legal and accounting fees. To the extent that
such costs, together with other cost, liabilities and other obligations of
Seller are not paid by Seller in the ordinary course and exceed the Debt Pay-Off
Consideration, such excess costs shall become an obligation of the Buyer.
4.4.2. Except as otherwise specifically provided for in this
Agreement, Buyer will assume and pay all costs, liabilities and other
obligations incurred by Buyer in connection with the performance of and
compliance with all Transactions and other agreements and conditions contained
in this Agreement and the other Transaction Documents to be performed or
complied with by Buyer, including legal and accounting fees.
4.5. Proprietary Information.
4.5.1. Seller covenants and represents that from and after the
Closing, Seller and its affiliates will not have any interest in, or claim to,
any patents, trademarks, trade names, service marks, copyrights or applications
therefor, or licenses to use any of the foregoing, or designs, methods,
inventories or know-how related thereto (collectively "Business Property
Rights") owned or held by UMSI, and all such Business Property Rights which are
necessary to, or used in the conduct of UMSI's business, and all knowledge or
information of a confidential nature acquired at or before the Closing Date with
respect to the UMSI and its business will be held in confidence by Seller and
will not be disclosed or made public, except for the benefit of Buyer or UMSI,
or made use of by or through Seller, directly or indirectly.
4.5.2. Seller, on its own behalf and on behalf of its affiliates,
acknowledges that a breach of subsection 4.5.1. hereof would cause irreparable
damage to Buyer, and in the event of Seller's actual or threatened breach of the
provisions of subsection 4.5.1. hereof, Buyer shall be entitled to a temporary
restraining order and an injunction restraining such Seller from breaching such
covenants without the necessity of posting bond or proving irreparable harm,
such being conclusively admitted by Seller. Nothing shall be
14
construed as prohibiting Buyer from pursuing any other available remedies for
such breach or threatened breach, including the recovery of damages.
4.6. Operation of the Business. Except as contemplated herein or as
otherwise consented to by Buyer in writing, prior to the Closing Seller will,
and will cause UMSI to:
4.6.1. Use its best efforts to keep UMSI intact and not take or
permit to be taken or do or suffer to be done anything other than in the
ordinary course of the business of UMSI as presently conducted, including
without limitation incurring any contractual obligation outside the ordinary
course of the business as presently conducted, and to maintain the goodwill
associated with the business;
4.6.2. Not take any action that could result in the breach of any
of the representations, warranties or covenants of Seller or UMSI pursuant to
this Agreement, or that could cause any of the representations, warranties or
covenants of Seller or UMSI not to be true and correct in all material respects
immediately after such action or on the Closing Date; and
4.6.3. Recommend to the Unico Common Holders to vote in favor of
the Merger which will result in the sale of the UMSI Shares, Seller's sole
significant asset.
4.7. Access for Due Diligence Investigation. To the extent within
Seller's and Buyer's ability and control, each of the parties hereto have
afforded, and until the Closing, shall continue to afford, to the other parties
hereto and their respective representatives (including, without limitation,
directors, officers, employees, investment bankers, accountants, counsel, and
other advisors) full access during normal business hours to all of the assets,
books, and records of such party and such other information with regard to such
party as any other party hereto may from time to time request, and to make
copies of such books, records and other documents and to discuss the business of
such party with such persons (including, without limitation, directors,
officers, employees, accountants, counsel, suppliers, customers and creditors)
as each of the other parties hereto deems necessary or appropriate for making a
due diligence investigation of the other parties hereto. Buyer and Seller shall
coordinate contact with third parties concerning their due diligence
investigations.
4.8. Notification of Certain Events.
4.8.1. Each party shall give prompt notice to the other parties
hereto of (i) the occurrence, or failure to occur, of any event that could cause
any representation or warranty of such party contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing Date or
which if known as of the date hereof would have been required to be disclosed to
the other parties hereto, and (ii) any failure of such party to comply with any
covenant, condition, or agreement to be complied with or satisfied by it under
this Agreement.
4.8.2. Each party shall give prompt notice to the other parties
hereto of any determination by it that an event described in clause 4.8.1.(i) or
(ii) could reasonably be expected to interfere with the Closing on the scheduled
Closing Date.
4.9. Permits and Consents. Seller and Buyer agree to cooperate and use
their best efforts to obtain any license, permit, authorization or approval (a
"Permit"), and to make any registration, declaration, or filing, required to be
obtained or made with any Governmental Authority or any other person or entity,
to consummate the Transactions. This covenant shall survive the Closing.
15
4.10. UCC and Lien Searches. Buyer shall, at its sole cost and expense,
obtain copies of written reports of UCC and judgment lien searches in each
jurisdiction in which Seller or UMSI is organized or in which assets thereof are
located, such reports to be dated within ten days of the Closing Date. Seller
and UMSI represent and warrant that all of the assets of Seller and UMSI are
located in Fairfax County, Virginia.
4.11. Seller Shareholder Meeting; Proxy Statement. As promptly as
practicable after the date hereof, Seller shall prepare and file a proxy
statement with the SEC. Buyer will furnish to Seller upon request the
information required to be included in the proxy statement with respect to the
business and affairs of Buyer before it is filed with the SEC. Seller and Buyer
shall use their best efforts in responding to any inquiries concerning the proxy
statement from the SEC prior to mailing such proxy statement to the Seller's
shareholders. Seller shall cause the proxy statement to be mailed to and call
for a vote of its shareholders of record in accordance with all applicable
notice requirements under the Securities Laws and the Delaware General
Corporation Law.
5. Conditions of Closing.
5.1 Buyer's and Seller's Conditions of Closing. The obligation of
Buyer to purchase and pay for the UMSI Shares, and the obligation of Seller to
sell the UMSI Shares shall be subject to and conditioned upon the satisfaction
at the Closing of each of the following conditions:
5.1.1. Any and all Permits from third parties and Governmental
Authorities required to consummate the Transactions shall have been obtained.
5.1.2. No suit, action, investigation, inquiry or other legal or
administrative proceeding by any Governmental Authority or other person shall
have been instituted or threatened which questions the validity or legality of
the Transactions or which could reasonably be expected to adversely affect the
ability of Buyer to consummate such Transactions.
5.1.3. As of the Closing, there shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a court
of competent jurisdiction directing that the Transactions or any of them not be
consummated as so provided, or imposing any material conditions on the
consummation of such Transactions by Seller or Buyer.
5.1.4. The parties hereto shall have executed and delivered to the
other parties hereto all other Transaction Documents and shall have received and
delivered to the other parties the following documents:
a. Written evidence by Buyer of the consummation of its
acquisition of 100% of the subordinated debt of Seller and the Unico Series C
Preferred, and contemporaneous cancellation of the subordinated debt of Seller
to Buyer and waiver of all rights of the Unico Series C Preferred other than
voting and conversion rights;
b. Written evidence from BancFirst that BancFirst will
not object to the Transactions, consents to the acquisition of UMSI by Buyer,
releases Seller from its obligations in regard to its debt to BancFirst and
agrees to the assumption by Buyer of such obligations in regard to the debt of
Seller to BancFirst;
c. A stock purchase and shareholder agreement between
Messrs. ▇▇▇▇ ▇▇▇▇ ("Sens") and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") providing for, among
other things, an agreement between Sens and ▇▇▇▇▇▇▇ concerning the structure of
Buyer's board of directors upon consummation of the Transactions;
16
d. Employment agreements between ▇▇▇▇▇▇▇ and each of
Buyer and the Surviving Corporation for the appointment of ▇▇▇▇▇▇▇ as CEO of
each such corporation;
e. A consulting agreement between Buyer and Sens
providing for the engagement of Sens as a consultant to Buyer;
f. Stock option agreements between Buyer and each of
Sens and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") providing for 150,000 stock options,
exercisable at $0.50 per share for a term of ten years from the date of their
issuance to acquire one share per option of NexGen Common, for each of Sens and
▇▇▇▇▇▇▇;
g. A stock purchase agreement among Buyer, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and ▇▇▇▇ ▇▇▇▇▇▇ ("▇▇▇▇▇▇") providing for the exchange
of Unico Common of each of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ for shares of NexGen
Common;
h. The cancellation of certain indebtedness of the
Buyer to certain shareholders of Buyer, and the cancellation of certain
indebtedness of certain shareholders of Buyer to Buyer;
i. Evidence of the reservation of 150,000 shares of
NexGen Common by Buyer's board of directors for awards to key employees of Buyer
and/or UMSI by Buyer's board of directors; and
j. Evidence of a restructuring of Buyer's loan from
KeyBank National Association to extend repayment past January 1, 2000, and Buyer
shall undertake its best efforts to reduce substantially the debt prior to
maturity.
5.1.5. The shareholders of Seller shall have approved the
Transactions through a shareholder vote.
5.2. Buyer's Conditions of Closing. The obligation of Buyer to purchase
and pay for the UMSI Shares shall be subject to and conditioned upon the
satisfaction at the Closing of each of the following conditions:
5.2.1. All representations and warranties of Seller and UMSI
contained in this Agreement and the other Transaction Documents shall be true
and correct at and as of the Closing Date, Seller shall have performed all
agreements and covenants and satisfied all conditions on its part required to be
performed or satisfied by the Closing Date pursuant to the terms of this
Agreement, and Buyer shall have received a certificate of the Seller dated the
Closing Date to such effect.
5.2.2. Seller shall have delivered to Buyer certificates of each
of Seller's and UMSI's corporate Secretary certifying:
(i) Resolutions of its Board of Directors authorizing
execution and delivery of this Agreement and the other Transaction
Documents and the performance of all Transactions; and
(ii) The incumbency of its officers executing this
Agreement and all other Transaction Documents executed on Seller's
behalf.
5.2.3. Seller shall have delivered to Buyer certificates of the
Secretary of State of Delaware and the Virginia Corporation Commission
certifying as of a date reasonably close to the Closing Date that each of Seller
and UMSI, respectively, has filed all required reports, paid all required fees
and taxes, and is, as of such date, in good standing and authorized to transact
business as a domestic corporation.
17
5.2.4. Seller shall have delivered the stock and minute book of
UMSI and the written resignations, effective on the Closing Date, of all members
of the Board of Directors and all officers of UMSI, and shall have caused all
persons who have been designated by Buyer to be duly elected as directors and
officers of UMSI.
5.2.5. Seller shall have delivered to Buyer certificates and other
instruments representing all the UMSI Shares issued and outstanding, duly
endorsed for transfer or accompanied by appropriate stock powers (in either case
executed in blank or in favor of Buyer), together with all other documents
necessary or appropriate to validly transfer the UMSI Shares to Buyer free and
clear of all Liens.
5.2.6. There shall not have occurred any material adverse change
in the business, client relations, operations, properties, prospects, assets or
condition of UMSI, and no event shall have occurred or circumstance shall exist
that has specific application to UMSI (other than general economic or industry
conditions) that could reasonably be expected to result in such a material
adverse change.
5.3. Seller's Conditions of Closing. The obligation of Seller to sell
the UMSI Shares shall be subject to and conditioned upon the satisfaction at the
Closing of each of the following conditions:
5.3.1. All representations and warranties of Buyer contained in
this Agreement and the other Transaction Documents shall be true and correct at
and as of the Closing Date, Buyer shall have performed all agreements and
covenants and satisfied all conditions on its part required to be performed or
satisfied by the Closing Date pursuant to the terms of this Agreement, and
Seller shall have received a certificate of Buyer dated the Closing Date to such
effect.
5.3.2. Buyer shall have delivered to Seller a certificate of its
corporate Secretary certifying:
(i) Resolutions of its Board of Directors authorizing
execution of this Agreement and the execution, performance and delivery
of all agreements, documents and transactions contemplated hereby; and
(ii) The incumbency of its officers executing this
Agreement and all agreements and documents contemplated hereby.
5.3.3. Buyer shall have delivered the Merger Consideration and the
Debt Pay-Off Consideration as provided for in Section 1.2 herein on the Closing
Date, together with satisfactory evidence of the Debt Forgiveness as provided
for in Section 1.2 herein, collectively constituting the Purchase Price.
5.3.4. Buyer shall have adopted bylaws in the form attached hereto
as Exhibit 5.3.4.
5.3.5. Buyer shall, as soon as practical after the date hereof but
no later than December 31, 1998, enter into a stock purchase agreement, in
satisfaction of Seller's indebtedness to Buyer, and Seller shall issue 1,800,000
shares of UNICO Common to T.C. Equities, Ltd. in satisfaction thereof.
5.3.6. Seller, Seller's associates and NexGen, as those parties
are defined in that certain Amended and Restated Stock Purchase and Shareholder
Agreement of even date herewith, shall have fully performed each and all of
their obligations set forth in such agreement including, but not limited to,
performance of those specific items set forth in Exhibit C thereto.
18
6. Miscellaneous.
6.1. Notice. Any notice or other communication required or permitted
hereunder shall be in writing and personally delivered, mailed by registered or
certified mail (return receipt requested and postage prepaid), sent by telegram
(with messenger service specified), sent by telecopier (with a confirming copy
sent by regular mail), or sent by prepaid overnight courier service, and
addressed to the relevant party at its address set forth below, or at such other
address as such party may, by written notice, designate as its address for
purposes of notice hereunder.
(a) If to Buyer, at:
Next Generation Media Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute
notice) to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to Seller, at:
UNICO, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which shall not constitute
notice) to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, Esq.
Holland & Knight LLP
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Notice shall be effective immediately upon personal delivery or telecopy, seven
(7) business days after deposit in the mail, or one (1) business day after
deposit with a telegraph company or overnight courier service.
6.2. Termination.
6.2.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing by mutual written agreement of the parties. Without the mutual written
agreement of the parties hereto, this Agreement will terminate on January 31,
1999.
6.2.2. Termination for Breach.
(i) Termination By Buyer. If there has been a material
breach by Seller or UMSI of any of Seller's or UMSI's agreements,
representations or warranties contained in this Agreement which has not been
waived in writing by Buyer, then Buyer may, by written notice to Seller at any
time prior to the Closing that such breach is continuing, terminate this
Agreement with the effect set forth in Section 6.2.2. (iii) hereof.
19
(ii) Termination By Seller. If there has been a material
breach by Buyer of any of Buyer's agreements, representations or warranties
contained in this Agreement which has not been waived in writing by Seller, then
Seller may, by written notice to Buyer at any time prior to the Closing that
such breach is continuing, terminate this Agreement with the effect set forth in
Section 6.2.2. (iii).
(iii) Effect of Termination. Termination of this Agreement
pursuant to this Section 6.2.2. shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other party
which has breached or failed to perform any of the representations, warranties,
covenants, or agreements of this Agreement prior to termination hereof.
6.3 Disclosures and Announcements. Both the timing and the content of
all disclosures to third parties (other than disclosures to agents acting on
behalf of Buyer or Seller for purposes of conducting their respective due
diligence investigation) and public announcements concerning the transactions
provided for in this Agreement by either Seller or Buyer shall be subject to the
approval of the other in all essential respects until the Closing following
which the specific terms of the Transaction Documents shall remain confidential
between the parties, except to the extent that disclosure of such terms is
required under applicable laws or regulations.
6.4. Further Assurances. Each party will do such acts, and execute and
deliver to any other party such additional documents or instruments as may be
reasonably requested in order to effect the purpose of this Agreement and the
other Transaction Documents and to better assure and confirm unto the requesting
party its rights, powers and remedies hereunder and thereunder.
6.5. Binding Effect; No Assignment. This Agreement and the other
Transaction Documents shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Notwithstanding the
foregoing, no party shall assign any of its rights or delegate any of its
obligations under any Transaction Document without the prior written consent of
the other parties thereto, which may be withheld at their respective discretion.
6.6. Entire Agreement. This Agreement and the other Transaction
Documents constitute the full and entire understanding and agreement among the
parties with regard to their respective subject matters and supersede any and
all prior written or oral agreements, understandings, representations and
warranties made with respect thereto. No amendment, supplement or modification
of this Agreement or any other Transaction Document nor any waiver of any
provision hereof or thereof shall be made except in writing executed by all
parties hereto or thereto.
6.7. Governing Law. THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF VIRGINIA, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS. Each of the parties hereto (a) agrees that any legal suit,
action or proceeding arising out of or relating to this Agreement will be
instituted exclusively in the state courts of Virginia or in the United States
District Court for the Eastern District of Virginia, (b) waives any objection
which such party may have now or hereafter to the venue of any such suit, action
or proceeding, and (c) irrevocably consents to the jurisdiction of the state
courts of Virginia and the United States District Court for the Eastern District
of Virginia in any such suit, action or proceeding. Each party further agrees to
accept and acknowledge service of any and all process which may be served in any
such suit, action or proceeding in such courts and agrees that service of
process upon such party mailed by certified mail to the party's address
specified pursuant to Section 6.1 will be deemed in every respect
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effective service of process upon such party in any such suit, action or
proceeding.
6.8. Survival. All representations, warranties, covenants and
agreements made by the parties to this Agreement and the other Transaction
Documents shall survive the execution of this Agreement and the Closing.
Notwithstanding any investigation conducted before the date of this Agreement or
the Closing, or the decision of any party to execute this Agreement or proceed
to Closing, each party shall be entitled to rely on the representations and
warranties of the other party set forth herein or in any other Transaction
Document.
6.9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
6.10. Interpretation. No provision of this Agreement or any other
Transaction Document shall be interpreted or construed against any party because
that party or its legal representative drafted such provision. The titles of the
paragraphs of this Agreement and other Transaction Documents are for convenience
of reference only and are not to be considered in construing this Agreement or
the relevant Transaction Document. For all purposes of this Agreement and the
other Transaction Documents, unless the context otherwise requires or as
otherwise expressly provided, (a) all defined terms shall include both the
singular and the plural forms thereof; (b) reference to any gender shall include
all other genders; (c) all references to words such as "herein", "hereof", and
the like shall refer to this Agreement as a whole and not to any particular
Article or Section within this Agreement; (d) the term "include" means "include
without limitation"; and (e) the term "or" is intended to include the term
"and/or".
6.11. No Waiver; Remedies Cumulative. No waiver by any party hereto of
any one or more defaults by any other party or parties in the performance of any
of the provisions of this Agreement shall operate or be construed as a waiver of
any future default or defaults, whether of a like or different nature. No
failure or delay on the part of any party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to any party hereto at law, in equity or
otherwise.
6.12. Incorporation of Exhibits. All exhibits and schedules attached
hereto are by this reference incorporated herein and made a part hereof for all
purposes as if fully set forth herein.
6.13. Severability. If any term, covenant or condition of this
Agreement, or the application of such term, covenant or condition to any party
or circumstance shall be found by a court of competent jurisdiction to be, to
any extent, invalid or unenforceable, the remainder of this Agreement and the
application of such term, covenant, or condition to parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant or condition shall be valid and
enforced to the fullest extent permitted by law. Upon determination that any
such term is invalid, illegal or unenforceable, the parties hereto shall amend
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner.
6.14. Stand Still. Except with the written consent of both Buyer and
Seller, each of the parties hereto, covenants that between the date hereof and
the Effective Time, other than as provided for in the Transaction Documents,
neither it nor any of its subsidiaries shall:
21
a. carry on its business other than in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, or
establish or acquire any new subsidiary or engage in any new activity;
b. declare, set aside, make or pay any dividend or other
distribution in respect of its capital stock;
c. issue any shares of its capital stock;
d. issue, grant or authorize any Rights or effect any
recapitalization, reclassification, stock dividend, stock split or like change
in capitalization;
e. amend its articles of incorporation or bylaws; impose or
permit imposition of any lien, charge or encumbrance on any share of stock held
by it in any subsidiary, or permit such lien, charge or encumbrance to exist; or
waive or release any material right or cancel or compromise any debt or claim,
in each case other than in the ordinary course of business;
f. merge with any other entity or permit any other entity to
merge into it, or consolidate with any other entity; acquire control over any
other entity; or liquidate, sell or otherwise dispose of any assets or acquire
any assets, other than in the ordinary course of its business consistent with
past practices;
g. fail to comply in any material respect with any laws,
regulations, ordinances or governmental actions applicable to it and to the
conduct of its business;
h. increase the rate of compensation of any of its directors,
officers or employees, or pay or agree to pay any bonus to, or provide any other
employee benefit or incentive to, any of its directors, officers or employees;
i. enter into any material agreement, arrangement or
commitment not made in the ordinary course of business;
j. dispose of any material assets other than in the ordinary
course of business; or
k. agree to do any of the foregoing.
6.15 Execution Date.
6.15.1 Seller acknowledges that, pursuant to the Prior Agreement,
Buyer has made advances to Seller in the amount of $175,500
for working capital, payment of creditors and other
purposes. Seller and Buyer agree that on the Closing Date,
Buyer shall forgive this indebtedness to Seller and such
forgiveness of indebtedness shall be included in the
Purchase Price.
6.15.2 Seller acknowledges that, in addition to the advances made
pursuant to Section 6.15.1 hereof, Buyer has made advances
to Seller in the amount of $170,000 for working capital,
payment of creditors and other purposes since the execution
of the Prior Agreement. Seller shall enter into a stock
purchase agreement as soon as practical after the date
hereof and on or before December 31, 1998, whereby, in
satisfaction of this obligation to Buyer and in
consideration of Buyer's obligation to make certain other
advances to Seller on or before December 31, 1998, Seller
22
shall sell 1,800,000 shares of Unico Common to T.C.
Equities, Ltd.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the date first set forth above.
NEXT GENERATION MEDIA
CORP. (BUYER)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
UNITED MARKETING MERGER
CORP. (NEWCO)
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
President
UNICO, INC. (SELLER)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
UNITED MARKETING SOLUTIONS INC.
(UMSI)
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President