S1_EX-23<PAGE> STOCK PURCHASE AGREEMENT
S1_EX-23<PAGE>
AGREEMENT
made as of November 30, 1997, by and between Unico, Inc., a
New Mexico corporation (UNICO); Starlicon Group, Inc., a Nevada
Corporation
("Seller or SGI"); and Starlicon International Corporation, a California
corporation ("SI").
WHEREAS,
Seller desires to sell, and UNICO desires to purchase and
acquire from Seller all outstanding shares of SI, upon the terms
and subject to
the conditions set forth herein; and,
WHEREAS, SGI owns 100% of the issued and outstanding shares of SI;
NOW,
THEREFORE, in consideration of the mutual agreements recited
herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.1
Purchase and Sale. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations and warranties
set forth
herein, on the Closing Date, as defined herein, Seller will issue,
sell,
transfer and deliver to UNICO, and UNICO shall acquire from Seller,
100% of the
issued and outstanding Capital Stock of SI, free and clear of all
liens,
pledges, encumbrances, charges, and claims thereon ("the Shares").
Within 30
days thereafter the UNICO shares paid to SGI as consideration pursuant
to
Section 1.2 of this Agreement shall be distributed to the shareholders
of SGI.
1.2
Base Purchase Price. The purchase price for the Shares shall be
an amount equal to SI's Total Revenue (defined as "Sales," less
"Sales Returns,"
(including return merchandise authorizations ("RMAs") less "Interest
Income") as
reported in SI's audited financial statements for the twelve month
period ending
November 30, 1997 ("Base Purchase Price" and "Base Total Revenue").
One-third of
the Base Purchase Price shall be paid in the form of UNICO common
stock and
two-thirds of the Base Purchase Price shall be paid in the form
of UNICO Series
A Preferred Stock. No fractional shares of either class of stock
will be issued.
1.2.1
Unico Common Stock For the purpose of this Agreement, UNICO
common stock shall be deemed to have a value of $1.40 per share.
S1_EX-24<PAGE>
1.2.2 Unico Series A Preferred Stock
a. Number of Shares Issued. The
number of UNICO
Series A Preferred Shares to be issued pursuant
to Section 1.2 of this Agreement shall be
determined by multiplying the number of common
shares issued pursuant to Section 1.2 times
0.002.
b. The rights and preferences
of the Series A
Preferred Shares are as set forth on Exhibit
1.2.2
1.3
Supplemental Purchase Price. As soon as reasonably practical
after SI's audited Total Revenue Statements for the 12 month period
ending
November 30, 1998 are available, a Supplemental Purchase Price
shall be
determined in accordance with the following formula:
SPP= (NTR - BTR) X0.5
Where:
SPP= Supplemental Purchase Price in dollars
NTR= New Total Revenue - 12 months ending November 30, 1998
as defined in Section 1.2.
BTR= Base Total Revenue as defined in Section 1.2.
In the event the value of SPP as determined above is 0 or a negative
number, no
further payments shall be due. Payments of the Supplemental Purchase
Price, if
any, shall be in the form of shares of UNICO Series A Preferred
Stock. The
number of such shares shall be determined by the following formula:
Number of Preferred Shares= SPP
---------------
(1000) x (1.4)
No fractional shares will be issued.
ARTICLE II
ADDITIONAL TRANSACTIONS
2.1
Confidentiality and Non-Competition Agreement. At the Closing,
UNICO and the officers of SI, will enter into an agreement with
UNICO agreeing
not to disclose to any third party (other than their attorneys,
accountants and
advisers) any confidential information relating to SI or its business,
except as
required to be disclosed by law, and agreeing not to compete with
SI for a
period of three years following the Closing Date. Such agreement
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S1_EX-25<PAGE>
shall be in form and substance reasonably satisfactory to SGI, SI
and UNICO.
2.2
Constitution of the Board of Directors. On Closing the Board of
Directors will be satisfactory to both UNICO and Seller and will
comply as of
February 22, 1998 with the new NASD requirements under the Small
Cap Market
System.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SGI AND SI
SGI,
and to the extent applicable SI, jointly make the following
representations and warranties to UNICO, each of which shall be
deemed material,
and UNICO, in executing, delivering and consummating this Agreement,
has relied
and will rely upon the correctness and completeness of each of
such
representation and warranty:
3.1
Valid Corporate Existence; Qualifications. SGI and SI ("the
Companies") are corporations duly organized, validly existing and
in good
standing under the laws of the State of California and Nevada,
respectively.
Each of the Companies has the corporate power to carry on its business
as now
conducted and to own its assets. Each company is duly qualified
to conduct
business and is in good standing as a foreign corporation in those
jurisdictions
set forth in Exhibit 3.1, which are the only jurisdictions in which
the
Companies are required to qualify in order to own their assets
or properties or
to carry on its business as now conducted, and there has not been
any claim by
any other jurisdiction to the effect that either Company is required
to qualify
or otherwise be authorized to do business as a foreign corporation
therein which
could reasonably be expected to have a materially adverse effect
upon the
business of SI. The copies of the Companies' Certificates of Incorporation
(certified by the Corporation's secretary), as amended to date,
which have been
exhibited to UNICO with respect to SGI and delivered to UNICO with
respect to
SI, are true and complete copies of those documents as now in effect.
The minute
books of SGI and SI contain accurate records of all material meetings
of its
Board of Directors, Executive Committee of the Board, if any, and
shareholders
since its incorporation, and accurately reflect all transactions
authorized
therein.
3.2
Capitalization. The authorized capital stock of SI consists of
1,000 shares of Common Stock, no par value, of which 1,000 shares
of Common
Stock are issued and outstanding. All of such shares of Common
Stock are duly
authorized and validly issued and outstanding, fully paid and non
assessable.
3.3
Subsidiaries. Except as set forth in Exhibit 3.3, there are no
corporations, partnerships and other business entities controlled
by SI. As used
herein, "controlled by" means (i) the
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S1_EX-26<PAGE>
ownership of not less than 50% of the voting securities or other
interests of a
corporation, partnership or other business entity, or (ii) the
possession,
directly or indirectly, of the power to direct or cause the direction
of the
management and policies of a corporation, partnership or other
business entity,
whether through the ownership of voting shares, by contract or
otherwise.
3.4
Consents. All requisite consents of governmental and other
regulatory agencies, foreign or domestic, and of other parties
required to be
received by or on the part of SGI and/or SI to enable them to enter
into and
carry out this Agreement in all material respects have been, or
prior to the
Closing will have been, obtained.
3.5
Corporate Authority; Binding Nature of Agreement; Title to
Shares. SGI and SI have the corporate power to enter into this
Agreement and to
carry out their respective obligations hereunder. The execution
and delivery of
this Agreement and the consummation of the transactions contemplated
hereby have
been duly authorized by their Boards of Directors and, except for
the approval
of SGI's shareholders, no other corporate proceedings on the part
of SGI or SI
are necessary to authorize the execution and delivery of this Agreement
and the
consummation of the transactions contemplated hereby. This Agreement
constitutes
Sellers valid and binding obligation and is enforceable in accordance
with its
terms. At the Closing, SGI will be the sole record and beneficial
owner of the
Shares, free and clear of all manner of liens, charges, encumbrances,
and
claims, will have good and marketable title to the Shares, and
will have, the
absolute and unqualified right to sell, transfer and deliver such
Shares to
UNICO. The delivery of the Shares to UNICO at the Closing pursuant
to the
provisions of this agreement will transfer valid title thereto,
free and clear
of all manner of liens, charges, encumbrances and claims.
3.6
Financial Statements. The books of accounts of SI, taken as a
whole, fairly reflect its income, expenses, assets and liabilities
in all
material respects. The unaudited financial statements of SI for
the period
ending November 30, 1997 fairly present the financial position
of SI as of said
date and the results of their operations for such period and were
prepared in
conformity with generally accepted accounting principles. Such
financial
statements will be audited within sixty (60) days following the
Closing Date.
3.7
Liabilities. As at November 30, 1997 (the "Balance Sheet Date"),
SI had no material debts, liabilities or obligations, contingent
or absolute,
other than those debts, liabilities and obligations reflected or
reserved
against on SI's balance sheet as at November 30, 1997 (the "Balance
Sheet") or
in the footnotes thereto or in the exhibits to this Agreement.
3.8
Action Since Balance Sheet Date. Except as otherwise
expressly provided or set forth in, or required by this Agreement,
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S1_EX-27<PAGE>
since the Balance Sheet date, SI has not (and will not have as of
the Closing
Date): (i) issued or sold, or agreed to issue or sell any of its
capital stock,
options, warrants, rights or calls to purchase such stock, any
securities
convertible or exchangeable into such capital stock or other corporate
securities, or effected any subdivision or other recapitalization
affecting its
capital stock; (ii) incurred any material obligation or liability,
absolute or
contingent, except those arising in the ordinary and usual course
of its
business; (iii) discharged or satisfied any lien or encumbrances,
except in the
ordinary and usual course of business, or paid or satisfied any
liability,
absolute or contingent, other than liabilities as of the Balance
Sheet Date and
current liabilities incurred since the Balance Sheet Date in the
ordinary and
usual course of business; (iv) made any wage or salary increases
or granted any
bonuses other than wage and salary increases and bonuses granted
in accordance
with its normal salary increase and bonus policies; (v) mortgaged,
pledged or
subjected to any lien or other encumbrance any of its properties
or assets, or
permitted any of its property or assets to be subjected to any
liens or other
encumbrance, except in the ordinary and usual course of business;
(vi) sold,
assigned or transferred any of its properties or assets, except
in the ordinary
and usual course of business; (vii) entered into any transaction
except in the
ordinary and usual course of business; (viii) waived any rights
of substantial
value, or canceled, modified or waived any indebtedness for borrowed
money held
by it, except in the ordinary and usual course of business; (ix)
declared, paid
or set aside any dividends or other distributions or payments on
its capital
stock, or redeemed or repurchased, or agreed to redeem or repurchase,
any shares
of its capital stock; (x) made any loans or advances to any person,
or assumed,
guaranteed, endorsed or otherwise became responsible for the obligations
of any
person; or (xi) incurred any indebtedness for borrowed money (except
for
endorsement, for collection or deposit of negotiable instruments
received in the
ordinary and usual course of business).
3.9
Adverse Developments. Except as otherwise expressly provided or
set forth in, or required by, this Agreement, since the Balance
Sheet Date,
there have been no changes in the properties, operations or financial
condition
of SI, and no event has occurred other than in the ordinary and
usual course of
business which could be reasonably expected to have a materially
adverse effect
upon the business of SI, SI and SGI do not know of any development
or threatened
development of a nature that is, or which could be reasonably expected
to have a
materially adverse effect upon the business of SI or upon any of
its assets or
properties, including, without limitation, the loss of any licenses
or permits,
suppliers, customers or employees, which loss would be of a materially
adverse
nature. This representation will also be true on the Closing date.
3.10
Taxes. All taxes, including, without limitation, income,
property, sales, use, franchise, capital stock, excise, added value,
employee's
income withholding, social security and
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S1_EX-28<PAGE>
unemployment taxes imposed by the United States, any state or any
foreign
county, or by any other taxing authority, which have or may have
become due or
payable by SI and all interest and penalties thereon, whether disputed
or not,
have been paid in full or adequately provided for by reserves shown
in its books
of account; all deposits required by law to be made by SI with
respect to
estimated income, franchise and employees' withholding taxes have
been duly
made; and all tax returns, including estimated tax returns, required
to be filed
have been duly filed. No extension of time for the assessment of
deficiencies
for any year is in effect. No deficiency is proposed or, to the
knowledge of SGI
or SI, threatened against SI.
3.11
Ownership of Assets. SI owns outright, and has good and
marketable title to all of its assets, properties and business
(including all
assets reflected in the Balance Sheet, except as the same may have
been disposed
of in the ordinary course of business since the Balance Sheet Date),
free and
clear of all liens, mortgages, pledges, conditional sales agreements,
restrictions on transfer or other encumbrances or charges, except
those listed
on Exhibit 3.11. Exhibit 3.11 sets forth a true and complete list
and brief
description of all patents, copyrights, trademarks, trade names
and other
similar intangible assets which are either owned by SI or in which
SI has an
interest. Except as set forth in Exhibit 3.11, no other person,
firm or
corporation has any proprietary or other interest in any such intangible
assets.
Such assets so owned or leased are, in the reasonable business
judgment of SGI
and/or SI, sufficient to permit SI to conduct its business as now
conducted.
Except as set forth in Exhibit 3.11, SI is not a party to or bound
by any
license or agreement requiring the payment to any person, firm
or corporation of
any royalty. SGI and SI do not know, or have reasonable grounds
to know of, any
violation by others of the trademark, trade name or patent rights
of SI. SI is
not infringing upon any patent, copyright, trade name or trademark
or otherwise
violating the rights of any third party with respect thereto, and
no proceedings
have been instituted or, to the knowledge of SGI and SI are threatened,
and no
claim has been received by SGI or SI alleging any such violation.
3.12
Insurance. Exhibit 3.12 sets forth a list and brief description
of all policies of fire, liability and other forms of insurance
held by SI as of
the date hereof. Except as set forth in Exhibit 3.12, such policies
are valid,
outstanding and enforceable policies, as to which premiums have
been paid
currently. Except as set forth in said Exhibit 3.12, neither SGI,
nor SI, know
of any state of facts, or of the occurrence of any event which
might reasonably
or form the basis for any claim against SI not fully covered by
insurance for
liability on account of any express or implied warranty or tortious
omission or
commission.
3.13
Litigation, Compliance with Law. Except as set forth in Exhibit
3.13, there are no actions, suits, proceedings or governmental
investigations
relating to SI or to any of its
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S1_EX-29<PAGE>
properties, assets or business pending or, to the knowledge of SGI
or SI,
threatened, or any order, injunction, award or decree outstanding
against SI or
against or relating to any of its respective properties, assets
or business; and
SGI and SI know of no basis for any such action, suits or proceedings
within the
past two years or any such governmental investigation, orders,
injunctions or
decrees. SI is in not in violation of any law, regulation, ordinance,
order,
injunction, decree, award or other requirement of any governmental
body, court
or arbitrator relating to its properties, assets or business which
could be
reasonably expected to have a materially adverse effect upon the
business of SI.
3.14
Real Property. Exhibit 3.14 sets forth a brief description of
all real property which is owned by, or leased to SI. SI owns outright
the fee
simple title in and to the real properties shown on said Exhibit
3.14 as being
owned by SI, free and clear of all claims, liens, mortgages, charges,
or
encumbrances of any nature whatsoever, except as otherwise described
in Exhibit
3.14. The real property leases described in Exhibit 3.14 that relate
to the
leased properties described therein are now in full force and effect,
and all
amounts payable thereunder have been paid. Except as set forth
in Exhibit 3.14,
none of such leases could reasonably be expected to result in material
liability
for restoration of premises. All uses of such owned or leased property
by SI
conform, in all material respects, to all applicable building and
zoning
ordinances, laws, and regulations and, in the case of leased property,
to all
terms of the leases relating thereto.
3.15
Agreements and Obligations, Performance. Except as listed and
briefly described in Exhibit 3.15 (the "Listed Agreements") SI
, is not a party
to, or bound by any: (i) written or oral agreement or other contractual
commitment, understanding or obligation which involves aggregate
payments or
receipts in excess of $5,000 that cannot be canceled on thirty
(30) days or less
notice without penalty; (ii) contract, arrangement, commitment
or understanding
with its customers or any officer, employee, shareholder, director,
representative or agent thereof for the repurchase of products,
sharing of fees,
the rebating of charges to such customers, bribes, kickbacks from
such customers
or other similar arrangements; (iii) contract for the purchase
or sale of any
materials, products or supplies for a fixed term; (iv) contract
of employment
with any officer or employee not terminable at will without penalty
or premium
or any continuing obligation of liability; (v) deferred compensation,
bonus or
incentive plan or agreement not cancelable at will without penalty
or premium or
any continuing obligation or liability; (vi) management or consulting
agreement
not terminable at will without penalty or premium or any continuing
obligation
or liability; (vii) lease for real or personal property (including
borrowings
thereon), license or royalty agreement; (viii) union or other collective
bargaining agreement; (ix) agreement, commitment or understanding
relating to
indebtedness for borrowed money; (x) contract which, by its terms,
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S1_EX-30<PAGE>
requires the consent of any party thereto to the consummation of
the
transactions contemplated hereby; (xi) contract containing covenants
limiting
the freedom of SI to engage or compete in any line or business
with any person
in any geographical area; (xii) contract or option relating to
the acquisition
or sale of any business; (xiii) voting trust agreement or similar
shareholders'
agreement; (xiv) other contract, agreement, commitment or understanding
which
materially affects any of SI's properties, assets or business,
whether directly
or indirectly, or which was entered into other than in the ordinary
course of
business. A true and correct copy of each of the written Listed
Agreements has
been delivered to UNICO. SI has in all material respects performed
all
obligations required to be performed by it to date under all of
the Listed
Agreements, is not in default in any material respect under any
of the Listed
Agreements and has received no notice of any default or alleged
default
thereunder which has not heretofore been cured or which notice
has not
heretofore been withdrawn. SGI and SI know of no material default
under any of
the Listed Agreements by any other party thereto or by any other
person, firm or
corporation bound thereunder.
3.16
Condition of Assets. All machinery and equipment regularly used
by SI in the conduct of its business is in operating condition
and repair,
ordinary wear and tear excepted. The inventories of SI are substantially
in
usable and saleable condition and in reasonable balance, and such
inventory in
the aggregate is saleable at least at the value at which it is
carried on SI's
books.
3.17
Accounts Receivable. To the knowledge of SGI and SI, all of the
accounts receivable reflected in the books of account of SI are
valid and arose
in the ordinary course of its business, from the sale of services
or goods, and
SGI and SI do not know, or have reason to know, of any valid defense
or right of
set-off to the rights of SI to collect such accounts receivable
in the full
amounts shown on such books of account less any reserves on the
Balance Sheet.
3.18
Permits and Licenses. Exhibit 3.18 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state,
local and
foreign governmental regulatory bodies held by SI. SI has all permits,
license,
orders and approvals of all federal, state, local and foreign governmental
or
regulatory bodies required of it to carry on its business as presently
conducted; all such permits, licenses, orders, franchises and approvals
are in
full force and effect, and to the knowledge of SGI and SI, no suspension
or
cancellation of any of such permits, licenses, etc., is threatened;
and SI is in
compliance in all material respects with all requirements, standards
and
procedures of the federal, state, local and foreign governmental
bodies which
have issued permits, licenses, orders, franchises and approvals.
Exhibit 3.18
also sets forth a brief description of all motor vehicles owned
or leased by SI
and the state of title thereof.
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3.19
Banking Arrangements. Exhibit 3.19 sets forth the name of each
bank in or with which SI has an account, credit line or safety
deposit box, and
a brief description of each such account, credit line or safety
deposit box
including the names of all persons currently authorized to draw
thereon or
having access thereto, and the names of all persons, if any, now
holding powers
of attorney from SI and a summary statement of the terms thereof.
3.20
Interest in Assets. Except as set forth in Exhibit 3.20, neither
SGI nor any of SI's shareholders or affiliates, owns any property
or rights,
tangible or intangible, used in or related, directly or indirectly,
to the
business of SI.
3.21
Salary Information. Exhibit 3.21 contains a list of the names
and current salary rates of and bonus commitments to all present
officers of SI,
and the names and current annual salary rates of all other persons
employed by
SI whose annual salaries exceed $25,000.00.
3.22
Employee Benefit Plans. SI maintains no "pension" and "welfare"
benefit plans (within the respective meanings of sections 3(2)
and 3(1) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")),
nor does
it make employer contributions with respect to its employees. SI
acquired no
such plans and assumed no such contribution obligations in connection
with the
acquisition of its existing business.
3.23
No Breach. Neither the execution and delivery of this Agreement
by SGI and/or SI nor compliance by SGI and/or SI with any of the
provisions
hereof nor the consummation of the transactions contemplated hereby,
will:
(a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of SGI or SI;
(b) violate, or with the passage of time, result in the
material breach or termination of, or otherwise give any contracting
party the
right to terminate, or declare a material default under, the terms
of any
agreement or other document or undertaking, oral or written to
which SGI or SI
is a party or by which either its properties or assets may be bound
(except for
such violations, conflicts, breaches or defaults as to which required
waivers or
consents by other parties have been, or will, prior to the Closing,
be,
obtained);
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of SI
pursuant to the
terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, SGI or SI or upon their respective properties
or
assets; or
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(e) violate any law or regulation of any jurisdiction
relating to SGI or SI or any of their respective securities, assets
or
properties.
3.24
Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly
between SGI and
UNICO without the intervention of any broker, finder, investment
banker or other
third party except one party, to be paid by SGI, and another party,
to be paid
by UNICO. Except for such parties, neither UNICO or SGI have engaged,
consented
to, or authorized any broker, finder, investment banker or other
third party to
act on its behalf, directly or indirectly, as a broker or finder
in connection
with the transaction contemplated by this Agreement.
3.25
Labor Discussions. Except with respect to the agreements listed
in Exhibit 3.15 pursuant to Section 3.15(viii), SI is not, and
has not, during
the past three years, been involved in any labor discussions with
any unit or
group seeking to become the bargaining unit for any of its employees.
With
respect to said Agreements, Exhibit 3.15 sets forth a description
of the status
thereof, including any demands or proposals with respect to the
renewal,
extension or replacement thereof.
3.26
Change of Name. SI has not conducted business under any name
during the past three (3) years except those set forth on Exhibit
3.26.
3.27
Backlog. Exhibit 3.27 sets forth as of November 30, 1997 the
name, aggregate contract price, revenues received to date and balance
remaining
upon all orders then in progress or under contract. The aggregate
backlog of SI
as at November 30, 1997 is set forth in Exhibit 3.27.
3.28
Environmental. Except as previously disclosed or set forth on
Exhibit 3.28, neither SI nor any previous owner, tenant, occupant
or user of any
real property of SI, used, generated, manufactured, installed,
released,
discharge, stored or disposed of any "Hazardous Materials," as
defined below,
on, under, in or about the side of any such property. The term
"Hazardous
Materials" shall mean any waste material which is regulated by
any state or
local governmental authority in the states in which SI and its
subsidiaries, if
any, conduct business, or the United States Government, including,
but not
limited to, any material or substance which is (i) defined as a
"hazardous
waste," "hazardous material," "hazardous substance," "extremely
hazardous
waste," or "restricted hazardous waste" under any provision of
California Law,
(ii) petroleum, (iii) asbestos, (iv) designated as a "hazardous
substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251
et seq. (33
U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water
Act (33 U.S.C.
1317), (v) defined as a "hazardous waste" pursuant to Section 1004
of the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.
(42 U.S.C.
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6903), or (vi) defined as a "hazardous substance" pursuant to Section
101 of the
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C.
6901 et seq. (42 U.S.C. 9601). The current operations of SI and
its current and
past use comply and then complied; with all applicable laws and
governmental
regulations including all applicable federal, state and local laws,
ordinances,
and regulations pertaining to air and water quality, Hazardous
Materials, waste,
disposal or other environmental matters, including the Clean Water
Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal
Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental
Response, Compensation and Liability Act, and the statutes, rules,
regulations
and ordinances of the state, city and country in which such property
is located.
All sewage and waste discharge at such property is and has been
discharged in
compliance with applicable federal, state and local law. No ▇▇▇▇▇
of any kind
which may exist on such property have or have been receiving any
discharges.
There are no underground storage tanks of any kind at any such
property.
3.29
Untrue or Omitted Facts. No representation, warranty or
statement by SGI or SI in this Agreement contains any untrue statement
of a
material fact, or omits or will omit to state a fact necessary
in order to make
such representations, warranties or statements not materially misleading.
Without limitation of the foregoing, there is no fact known to
SGI or SI, that
has had, or which may be reasonably expected to have, a materially
adverse
effect on SI or any of its assets, properties and business and
that has not been
disclosed in writing to UNICO.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF UNICO
UNICO makes the following representations and warranties to SGI,
each of which shall be deemed material, and SGI, in executing this
Agreement,
has relied and will rely on the correctness and completeness of
such
representations and warranties:
4.1
Valid Corporate Existence; Qualification. UNICO is a corporation
duly organized, validly existing and in good standing under the
laws of the
State of New Mexico. UNICO has the corporate power to carry on
its business as
now conducted and to own its assets. UNICO is duly qualified to
conduct business
and is in good standing as a foreign corporation in those jurisdictions
set
forth in Exhibit 4.1, which are the only jurisdictions in which
UNICO is
required to qualify in order to own its assets or properties or
to carry on its
business as now conducted, and there had not been any claim by
any other
jurisdiction to the effect that UNICO is required to qualify or
otherwise be
authorized to do business as a foreign corporation therein which
could
reasonably be expected to
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S1_EX-34<PAGE>
have a materially adverse effect upon the business of UNICO. The
copies of
UNICO's Certificate of Incorporation (certified by the Secretary
of State of New
Mexico) and By-Laws (certified by UNICO's secretary), as amended
to date, which
have been delivered to SGI, are true and complete copies of those
documents as
now in effect. The minute books of UNICO contain accurate records
of all
material meetings of its Board of Directors, Executive Committee
of the Board,
if any, and shareholders since its incorporation, and accurately
reflect all
transactions authorized therein.
4.2
Capitalization. The authorized capital stock of UNICO consists of
50,000,000 shares of Common Stock, par value $.20 per share, and
8,000,000
shares of Preferred Stock of which 986,590 shares of Common Stock
are issued and
outstanding. None of the Preferred Shares are issued and outstanding.
All of
such shares of Common Stock and Preferred Stock are duly authorized
and, in the
case of the Common Stock, validly issued and outstanding, fully
paid and
nonassessable. Except as set forth on Exhibit 4.2, there are no
subscriptions,
options, warrants, rights or calls or other commitments or agreements
to which
UNICO is a party or by which any person is bound, calling for the
issuance,
transfer, sale or other disposition of securities of UNICO convertible
or
exchangeable, actually or contingently, into shares of Common Stock
or any other
securities of UNICO.
4.3
Subsidiaries. Except as set forth on Exhibit 4.3, there are no
corporations, partnerships and other business entities controlled
by UNICO. As
used herein, "controlled by" has the meaning set forth in Section
3.3 of this
Agreement.
4.4
Consents. The consent of all requisite governmental and other
regulatory agencies, foreign or domestic, and of other parties
required to be
received by, or on the part of UNICO to enable it to enter into
and carry out
this Agreement, have been, or prior to the Closing will have been,
obtained.
4.5
Corporate Authority; Binding Nature of Agreement; Title to
Shares. UNICO has the corporate power to enter into this Agreement
and to carry
out its obligations hereunder. The execution and delivery of this
Agreement and
the consummation of the transactions contemplated hereby have been
duly
authorized by its Board of Directors and no other corporate proceedings
on the
part of UNICO are necessary to authorize the execution and delivery
of this
Agreement and the consummation of the transactions contemplated
hereby. This
Agreement constitutes UNICO's valid and binding obligation and
is enforceable in
accordance with its terms. At the Closing, UNICO will have the
absolute and
unqualified right to issue, transfer and deliver its common and
preferred shares
to SGI. The delivery of the Common and Preferred Stock to SGI at
the Closing
pursuant to the provisions of this Agreement will transfer valid
title thereto,
free and clear of all manner of liens, charges, encumbrances and
claims.
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S1_EX-35<PAGE>
4.6
Financial Statements. The books of accounts of UNICO taken as a
whole, fairly reflect its income, expenses, assets and liabilities
in all
material respects. The unaudited financial statements of UNICO
for the period
ending November 30, 1997 fairly present the financial position
of UNICO as of
said date and the results of its operations for such period and
were prepared in
conformity with generally accepted accounting principles. Such
financial
statements will be audited within sixty (60) days following the
end of UNICO's
fiscal year ending February 28, 1998.
4.7
Liabilities. Except as set forth in Exhibit 4.7, as of November
30, 1997 (the "Balance Sheet Date"), UNICO had no material debts,
liabilities or
obligations, contingent or absolute, other than those debts, liabilities
and
obligations reflected or reserved against on UNICO's balance sheet
as at
November 30, 1997 (the "Balance Sheet Date") or in the footnotes
thereto or in
the exhibits to this Agreement.
4.8
Action Since Balance Sheet Date. Except as otherwise expressly
provided or set forth in, or required by this Agreement, since
the Balance Sheet
date, UNICO has not (and will not have as of the Closing Date):
(i) issued or
sold, or agreed to issue or sell any of its capital stock, options,
warrants,
rights or calls to purchase such stock, any securities convertible
or
exchangeable into such capital stock or other corporate securities,
or effected
any subdivision or other recapitalization affecting its capital
stock; (ii)
incurred any material obligation or liability, absolute or contingent,
except
those arising in the ordinary and usual course of its business;
(iii) discharged
or satisfied any lien or encumbrances, except in the ordinary and
usual course
of business, or paid or satisfied any liability, absolute or contingent,
other
than liabilities as of the Balance Sheet Date and liabilities incurred
since the
Balance Sheet Date in the ordinary and usual course of business;
(iv) made any
wage or salary increases or granted any bonuses other than wage
and salary
increases and bonuses granted in accordance with its normal salary
increase and
bonus policies; (v) mortgaged, pledged or subjected to any lien
or other
encumbrance any of its properties or assets, or permitted any of
its property or
assets to be subjected to any liens or other encumbrance, except
in the ordinary
and usual course of business; (vi) sold, assigned or transferred
any of its
properties or assets, except in the ordinary and usual course of
business; (vii)
entered into any transaction except in the ordinary and usual course
of
business; (viii) waived any rights of substantial value, or canceled,
modified
or waived any indebtedness for borrowed money held by it, except
in the ordinary
and usual course of business; (ix) declared, paid or set aside
any dividends or
other distributions or payments on its capital stock, or redeemed
or
repurchased, or agreed to redeem or repurchase, any shares of its
capital stock;
(x) made any loans or advances to any person, or assumed, guaranteed,
endorsed
or otherwise became responsible for the obligations of any person;
or (xi)
incurred any indebtedness for borrowed money (except for endorsement,
for
collection or
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S1_EX-36<PAGE>
deposit of negotiable instruments received in the ordinary and usual
course of
business).
4.9
Adverse Developments. Except as otherwise expressly provided or
set forth in, or required by, this Agreement, since the Balance
Sheet Date,
there have been no changes in the properties, operations or financial
condition
of UNICO, and no event has occurred other than in the ordinary
and usual course
of business which could be reasonably expected to have a materially
adverse
effect upon the business of UNICO, and UNICO does not know of any
development or
threatened development of a nature that is, or which could be reasonably
expected to have a materially adverse effect upon the business
of UNICO or upon
any of its assets or properties, including, without limitation,
the loss of any
licenses or permits, suppliers, customers or employees, which loss
would be of a
materially adverse nature. This representation will also be true
on the Closing
date.
4.10
Taxes. All taxes, including, without limitation, income,
property, sales, use, franchise, capital stock, excise, added value,
employee's
income withholding, social security and unemployment taxes imposed
by the United
States, any state or any foreign county, or by any other taxing
authority, which
have or may have become due or payable by UNICO and all interest
and penalties
thereon, whether disputed or not, have been paid in full or adequately
provided
for by reserves shown in its books of account; all deposits required
by law to
be made by UNICO with respect to estimated income, franchise and
employees'
withholding taxes have been duly made; and all tax returns, including
estimated
tax returns, required to be filed have been duly filed. No extension
of time for
the assessment of deficiencies for any year is in effect. No deficiency
is
proposed or, to the knowledge of UNICO, threatened against UNICO.
4.11
Ownership of Assets. UNICO owns outright, and has good and
marketable title to all of its assets, properties and business
(including all
assets reflected in the Balance Sheet, except as the same may have
been disposed
of in the ordinary course of business since the Balance Sheet Date),
free and
clear of all liens, mortgages, pledges, conditional sales agreements,
restrictions on transfer or other encumbrances or charges, except
those listed
on Exhibit 4.11. Exhibit 4.11 sets forth a true and complete list
and brief
description of all patents, copyrights, trademarks, trade names
and other
similar intangible assets which are either owned by UNICO or in
which UNICO has
an interest. Except as set forth in Exhibit 4.11, no other person,
firm or
corporation has any proprietary or other interest in any such intangible
assets.
Such assets so owned or leased are, in the reasonable business
judgment of
UNICO, sufficient to permit UNICO to conduct its business as now
conducted.
Except as set forth in Exhibit 4.11, UNICO is not a party to or
bound by any
license or agreement requiring the payment to any person, firm
or corporation of
any royalty. UNICO does not know, or have reasonable grounds to
know of, any
violation by
-14-
S1_EX-37<PAGE>
others of the trademark, trade name or patent rights of UNICO. UNICO
is not
infringing upon any patent, copyright, trade name or trademark
or otherwise
violating the rights of any third party with respect thereto, and
no proceedings
have been instituted or, to the knowledge of UNICO are threatened,
and no claim
has been received by UNICO alleging any such violation.
4.12
Insurance. Exhibit 4.12 sets forth a list and brief description
of all policies of fire, liability and other forms of insurance
held by UNICO as
of the date hereof. Except as set forth in Exhibit 4.12, such policies
are
valid, outstanding and enforceable policies, as to which premiums
have been paid
currently. Except as set forth in said Exhibit 4.12, UNICO does
not know of any
state of facts, or of the occurrence of any event which might reasonably
form
the basis for any claim against UNICO not fully covered by insurance
for
liability on account of any express or implied warranty or tortious
omission or
commission.
4.13
Litigation, Compliance with Law. Except as set forth in Exhibit
4.13, there are no actions, suits, proceedings or governmental
investigations
relating to UNICO or to any of its properties, assets or business
pending or, to
the knowledge of UNICO, threatened, or any order, injunction, award
or decree
outstanding against UNICO or against or relating to any of its
respective
properties, assets or business; and UNICO knows of no basis for
any such action,
suits or proceedings within the past two years or any such governmental
investigation, orders, injunctions or decrees. UNICO is in not
in violation of
any law, regulation, ordinance, order, injunction, decree, award
or other
requirement of any governmental body, court or arbitrator relating
to its
properties, assets or business which could be reasonably expected
to have a
materially adverse effect upon the business of UNICO.
4.14
Real Property. Exhibit 4.14 sets forth a brief description of
all real property which is owned by, or leased to UNICO. UNICO
owns outright the
fee simple title in and to the real properties shown on said Exhibit
4.14 as
being owned by UNICO, free and clear of all claims, liens, mortgages,
charges,
or encumbrances of any nature whatsoever, except as otherwise described
in
Exhibit 4.14. The real property leases described in Exhibit 4.14
that relate to
the leased properties described therein are now in full force and
effect, and
all amounts payable thereunder have been paid. Except as set forth
in Exhibit
4.14, none of such leases could reasonably be expected to result
in material
liability for restoration of premises. All uses of such owned or
leased property
by UNICO conform, in all material respects, to all applicable building
and
zoning ordinances, laws, and regulations and, in the case of leased
property, to
all terms of the leases relating thereto.
4.15
Agreements and Obligations, Performance. Except as listed and
briefly described in Exhibit 4.15 (the "Listed Agreements") UNICO
is not a party
to, or bound by any: (i) written
-15-
S1_EX-38<PAGE>
or oral agreement or other contractual commitment, understanding
or obligation
which involves aggregate payments or receipts in excess of $5,000
that cannot be
canceled on thirty (30) days or less notice without penalty; (ii)
contract,
arrangement, commitment or understanding with its customers or
any officer,
employee, shareholder, director, representative or agent thereof
for the
repurchase of products, sharing of fees, the rebating of charges
to such
customers, bribes, kickbacks from such customers or other similar
arrangements;
(iv) contract for the purchase or sale of any materials, products
or supplies
for a fixed term; (v) contract of employment with any officer or
employee not
terminable at will without penalty or premium or any continuing
obligation of
liability; (vi) deferred compensation, bonus or incentive plan
or agreement not
cancelable at will without penalty or premium or any continuing
obligation or
liability; (vii) management or consulting agreement not terminable
at will
without penalty or premium or any continuing obligation or liability;
(viii)
lease for real or personal property (including borrowings thereon),
license or
royalty agreement; (ix) union or other collective bargaining agreement;
(x)
agreement, commitment or understanding relating to indebtedness
for borrowed
money; (xi) contract which, by its terms, requires the consent
of any party
thereto to the consummation of the transactions contemplated hereby;
(xii)
contract containing covenants limiting the freedom of UNICO to
engage or compete
in any line or business with any person in any geographical area;
(xiii)
contract or option relating to the acquisition or sale of any business;
(xiv)
voting trust agreement or similar shareholders' agreement; (xv)
other contract,
agreement, commitment or understanding which materially affects
any of UNICO's
properties, assets or business, whether directly or indirectly,
or which was
entered into other than in the ordinary course of business. A true
and correct
copy of each of the written Listed Agreements has been delivered
to SGI. UNICO
has in all material respects performed all obligations required
to be performed
by it to date under all of the Listed Agreements, is not in default
in any
material respect under any of the Listed Agreements and has received
no notice
of any default or alleged default thereunder which has not heretofore
been cured
or which notice has not heretofore been withdrawn. UNICO knows
of no material
default under any of the Listed Agreements by any other party thereto
or by any
other person, firm or corporation bound thereunder.
4.16
Condition of Assets. All machinery and equipment regularly used
by UNICO in the conduct of its business is in operating condition
and repair,
ordinary wear and tear excepted. The inventories of UNICO are substantially
in
usable and saleable condition and in reasonable balance, and such
inventory in
the aggregate is saleable at least at the value at which it is
carried on
UNICO's books.
4.17
Accounts Receivable. To the knowledge of UNICO, all of the
accounts receivable reflected in the books of account of UNICO
are valid and
arose in the ordinary course of its business, from
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S1_EX-39<PAGE>
the sale of services or goods, and UNICO does not know, or have
reason to know,
of any valid defense or right of set-off to the rights of UNICO
to collect such
accounts receivable in the full amounts shown on such books of
account less any
reserves on the Balance Sheet.
4.18
Permits and Licenses. Exhibit 4.18 sets forth all permits,
licenses, orders, franchises and approvals from all federal, state,
local and
foreign governmental regulatory bodies held by UNICO. UNICO has
all permits,
license, orders and approvals of all federal, state, local and
foreign
governmental or regulatory bodies required of it to carry on its
business as
presently conducted; all such permits, licenses, orders, franchises
and
approvals are in full force and effect, and to the knowledge of
UNICO, no
suspension or cancellation of any of such permits, licenses, etc.,
is
threatened; and UNICO is in compliance in all material respects
with all
requirements, standards and procedures of the federal, state, local
and foreign
governmental bodies which have issued permits, licenses, orders,
franchises and
approvals. Exhibit 4.18 also sets forth a brief description of
all motor
vehicles owned or leased by UNICO and the state of title thereof.
4.19
Banking Arrangements. Exhibit 4.19 sets forth the name of each
bank in or with which UNICO has an account, credit line or safety
deposit box,
and a brief description of each such account, credit line or safety
deposit box
including the names of all persons currently authorized to draw
thereon or
having access thereto, and the names of all persons, if any, now
holding powers
of attorney from UNICO and a summary statement of the terms thereof.
4.20
Interest in Assets. Except as set forth in Exhibit 4.20, none of
UNICO'S officers, directors, or shareholders of greater than 5%
of the
outstanding shares, owns any property or rights, tangible or intangible,
used in
or related, directly or indirectly, to the business of UNICO.
4.21
Salary Information. Exhibit 4.21 contains a list of the names
and current salary rates of and bonus commitments to all present
officers of
UNICO, and the names and current annual salary rates of all other
persons
employed by UNICO whose annual salaries exceed $25,000.00.
4.22
Employee Benefit Plans. Except as set forth in Exhibit 4.22,
UNICO maintains no "pension" and "welfare" benefit plans (within
the respective
meanings of sections 3(2) and 3(1) of the Employee Retirement Income
Security
Act of 1974, as amended ("ERISA")), nor does it make employer contributions
with
respect to its employees. UNICO acquired no such plans and assumed
no such
contribution obligations in connection with the acquisition of
its existing
business.
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S1_EX-40<PAGE>
4.23
No Breach. Neither the execution and delivery of this Agreement
by UNICO nor compliance by UNICO with any of the provisions hereof
nor the
consummation of the transactions contemplated hereby, will:
(a) violate or conflict with any provision of the
Certificate of Incorporation or By-Laws of UNICO;
(b) violate, or with notice or the passage of time, result\
in the material breach or termination of, or otherwise give any
contracting
party the right to terminate, or declare a material default under,
the terms of
any agreement or other document or undertaking, oral or written
to which UNICO
is a party or by which either its properties or assets may be bound
(except for
such violations, conflicts, breaches or defaults as to which required
waivers or
consents by other parties have been, or will, prior to the Closing,
be,
obtained);
(c) result in the creation of any lien, security interest,
charge or encumbrance upon any of the properties or assets of UNICO
pursuant to
the terms of any such agreement or instrument;
(d) violate any judgment, order, injunction, decree or award
against, or binding upon, UNICO or upon its properties or assets;
or
(e) violate any law or regulation of any jurisdiction
relating to UNICO or any of its securities, assets or properties.
4.24
Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried on directly
between SGI and
UNICO without the intervention of any broker, finder, investment
banker or other
third party except one party, to be paid by SGI, and another party,
to be paid
by UNICO. Except for such parties, neither UNICO or SGI have engaged,
consented
to, or authorized any broker, finder, investment banker or other
third party to
act on its behalf, directly or indirectly, as a broker or finder
in connection
with the transaction contemplated by this Agreement.
4.25
Labor Discussions. Except with respect to the agreements listed
in Exhibit 4.15 pursuant to Section 4.15(ii), UNICO is not, and
has not, during
the past three years, been involved in any labor discussions with
any unit or
group seeking to become the bargaining unit for any of its employees.
With
respect to said Agreements, Exhibit 4.15 sets forth a description
of the status
thereof, including any demands or proposals with respect to the
renewal,
extension or replacement thereof.
4.26
Change of Name. UNICO has not conducted business under any name
during the past three (3) years except those set forth on Exhibit
4.26.
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\
S1_EX-41<PAGE>
4.27
Backlog. Exhibit 4.27 sets forth as of November 30, 1997 the
name, aggregate contract price, revenues received to date and balance
remaining
upon all orders then in progress or under contract. The aggregate
backlog of
UNICO as at November 30, 1997 is set forth in Exhibit 4.27.
4.28
Environmental. Except as previously disclosed or set forth on
Exhibit 4.28, neither UNICO nor any previous owner, tenant, occupant
or user of
any real property of UNICO, used, generated, manufactured, installed,
released,
discharge, stored or disposed of any "Hazardous Materials," as
defined below,
on, under, in or about the side of any such property. The term
"Hazardous
Materials" shall mean any waste material which is regulated by
any state or
local governmental authority in the states in which UNICO and its
subsidiaries,
if any, conduct business, or the United States Government, including,
but not
limited to, any material or substance which is (i) defined as a
"hazardous
waste," "hazardous material," "hazardous substance," "extremely
hazardous
waste," or "restricted hazardous waste" under any provision of
California Law,
(ii) petroleum, (iii) asbestos, (iv) designated as a "hazardous
substance"
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. 1251
et seq. (33
U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water
Act (33 U.S.C.
1317), (v) defined as a "hazardous waste" pursuant to Section 1004
of the
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.
(42 U.S.C. 6903),
or (vi) defined as a "hazardous substance" pursuant to Section
101 of the
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C.
6901 et seq. (42 U.S.C. 9601). The current operations of UNICO
and its current
and past use comply and then complied; with all applicable laws
and governmental
regulations including all applicable federal, state and local laws,
ordinances,
and regulations pertaining to air and water quality, Hazardous
Materials, waste,
disposal or other environmental matters, including the Clean Water
Act, the
Clean Air Act, the Federal Water Pollution Control Act, the Solid
Waste Disposal
Act, the Resource Conservation Recovery Act, the Comprehensive
Environmental
Response, Compensation and Liability Act, and the statutes, rules,
regulations
and ordinances of the state, city and country in which such property
is located.
All sewage and waste discharge at such property is and has been
discharged in
compliance with applicable federal, state and local law. No ▇▇▇▇▇
of any kind
which may exist on such property have or have been receiving any
discharges.
There are no underground storage tanks of any kind at any such
property.
4.29
Untrue or Omitted Facts. No representation, warranty or
statement by UNICO in this Agreement contains any untrue statement
of a material
fact, or omits or will omit to state a fact necessary in order
to make such
representations, warranties or statements not materially misleading.
Without
limitation of the foregoing, there is no fact known to UNICO that
has had, or
which may be reasonably expected to have, a materially adverse
effect on UNICO
or any of
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S1_EX-42<PAGE>
its assets, properties and business and that has not been disclosed
in writing
to UNICO.
ARTICLE V
PRE-CLOSING COVENANTS
UNICO
and SGI each hereby covenant to the other that, from and after
the date hereof, and until the Closing or earlier termination of
this Agreement:
5.1
Access. It shall afford to the officers, attorneys, accountants
and other authorized representatives of the other free and full
access, during
regular business hours and upon reasonable notice, to its books,
records,
personnel and properties (including, without limitation, the work
papers
prepared by its auditors) so that such other party may have full
opportunity to
make such review, examination and investigation as it may desire
of its
respective business and affairs. It will cause its employees, accountants
and
attorneys to cooperate fully with said review, examination and
investigation and
to make full disclosure to the other party of all material facts
affecting their
respective financial conditions and business operations. All material
disclosed
will be held in strict confidence by the recipient.
5.2
Conduct of Business. It will conduct its business only in the
ordinary and usual course and make no material change in any of
its policies
without the prior written consent of the other, which shall not
be unreasonably
withheld or delayed.
5.3
Insurance. It will maintain in force the insurance policies
listed in Exhibits 3.12 and 4.12 as the case may be, except to
the extent that
they may be replaced with equivalent policies.
5.4
Liabilities. It shall not incur any obligation or liability,
absolute or contingent, except for those incurred in the ordinary
and usual
course of its business; nor shall it pay any obligation or liability
other than:
(i) the foregoing obligations and liabilities, (ii) debts, liabilities,
and
obligations set forth in its Balance Sheet; (iii) debts, liabilities
and
obligations arising after the Balance Sheet Date in the ordinary
course of its
business; and (iv) debts, liabilities and obligations under the
contracts,
agreements, past practices, arrangements, relationships, documents
and
instruments listed, described or contained in this Agreement or
in the Exhibits
annexed to this Agreement.
5.5
Preservation of Business. It will use its best efforts to
preserve its business organization intact, to keep available the
services of its
present officers, employees and consultants, and to preserve its
goodwill.
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S1_EX-43<PAGE>
5.6
No Breach. It will (i) use its best efforts to assure that all of
its representations and warranties contained herein are true in
all material
respects as at the Closing as if repeated at the Closing; (ii)
not voluntarily
take any action or do anything which will cause a breach of or
default
respecting such covenants, representations or warranties; and (iii)
promptly
notify the other of any event or fact which represents or is likely
to cause
such a breach or default.
5.7
No Negotiations. It will not enter into or conduct negotiations,
or enter into any agreement or understanding, for the sale or possible
sale of
any of its securities or assets, with anyone other than the other
unless the
Closing shall not have occurred by February 15, 1998.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF UNICO TO CLOSE
The
obligations of UNICO to enter into and complete the Closing, is
subject to the fulfillment, prior to or on the Closing Date, of
each of the
following conditions, any one or more of which may be waived by
UNICO (except
when the fulfillment of such condition is a requirement of law).
6.1
Representations and warranties. All representations and
warranties of SGI contained in this Agreement and in any written
statement
(including financial statements), exhibit, certificate, schedule
or other
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true and correct in all material respects
as at the
Closing Date, as if made at the Closing and as of the Closing date.
6.2
Covenants. SGI shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement
to be
performed or complied with by it prior to or at the Closing.
6.3
No Actions. No action, suit, proceeding or investigation shall
have been instituted, and be continuing before a court or before
or by a
governmental body or agency, and be unresolved, to restrain or
to prevent or to
obtain damages in respect of, the carrying out of the transactions
contemplated
hereby, or which might materially affect the right of UNICO to
own the Shares or
to operate or control the assets, properties and business of SI
after the
Closing Date, or which might have a materially adverse effect thereon.
6.4
Consents, Licenses and Permits. SGI shall have obtained all
consents, licenses and permits of third parties necessary for the
performance by
it of all of its obligations under this Agreement, and such other
consents, if
any, to prevent (i)
-▇▇-
▇▇_▇▇-▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ from terminating, the termination of which, in
the aggregate,
would have a material adverse effect on the business, financial
condition or
assets of SGI, or (ii) any material indebtedness of SGI from becoming
due or
being subject to becoming due with the passage of time or on notice
as a result
of the performance of this Agreement, any other provisions of this
Agreement to
the contrary notwithstanding.
6.5
Certificate. UNICO shall have received a certificate dated the
Closing Date, signed by the President and Secretary of SGI as to
the
satisfaction of the conditions contained in Sections 6.1, 6.2,
6.3, 6.4 and 6.6.
6.6
No Material Adverse Change. There shall have been no material
adverse change at the Closing Date in the business, assets and
properties,
financial status or prospects of SGI since the Balance Sheet Date.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATION OF
SGI TO CLOSE
The
obligation of SGI to enter into and complete the Closing is
subject to the fulfillment, prior to or on the Closing Date, of
each of the
following conditions, any one or more of which may be waived by
SGI (except when
the fulfillment of such condition is a requirement of law).
7.1
Representations and warranties. All representations and
warranties of UNICO contained in this Agreement and in any written
statement,
schedule or other document delivered pursuant hereto or in connection
with the
transactions contemplated hereby shall be true and correct in all
material
respects as at the Closing Date, as if made at the Closing and
as of the Closing
Date.
7.2
Covenants. UNICO shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement
to be performed or complied with by it prior to or at the Closing.
7.3
No Actions. No action suit, proceedings, or investigation shall
have been instituted, and be continuing, before a court or before
or by a
governmental body or agency, or have been threatened, and be unresolved,
to
restrain or prevent, or obtain damages in respect of, the carrying
out of the
transactions contemplated hereby.
7.4
Consents, Licenses and Permits. UNICO shall have obtained all
consents, licenses and permits of third parties necessary for the
performance by
UNICO of all of its obligations
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under this Agreement, and such other consents, if any, to prevent;
(i)
agreements of UNICO from terminating, the termination of which,
in the
aggregate, would have a material adverse effect on the business,
financial
condition or assets of UNICO, or (ii) any material indebtedness
of UNICO from
becoming due or being subject to becoming due with the passage
of time or on
notice as a result of the performance of this Agreement, any other
provisions of
this Agreement to the contrary notwithstanding.
7.5
Certificate. SGI shall have received a certificate of UNICO,
dated the Closing Date, signed by the President and Secretary of
UNICO as to the
satisfaction of the conditions contained in Sections 7.1, 7.2,
7.3 and 7.4 and
7.6.
7.6
No Material Adverse Change. There shall have been no material
adverse change at the Closing Date in the business, assets and
properties,
financial status or prospects of UNICO since the Balance Sheet
Date.
7.7
SEC and Nasdaq Compliance UNICO shall be in full compliance with
all reporting requirements of the Securities and Exchange Commission,
including
required amendments to filings and reports, and UNICO's Common
Stock shall be
listed for trading on Nasdaq.
ARTICLE VIII
CLOSING
8.1
Time and Location. The Closing provided for herein shall take
place at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, effective 60 days
from the date
hereof or at such other time and place as may be mutually agreed
to by the
parties hereto. Such date is referred to in this Agreement as the
"Closing
Date".
8.2
Items to be Delivered by SGI. At the Closing, SGI will deliver or
cause to be delivered to UNICO:
(a) Certificates representing the Shares in accordance with
Section 1.1 hereof, accompanied by all instruments and documents
as in the
opinion of UNICO's counsel, shall be necessary to effect the transfer
of and to
vest title in and to the Shares in UNICO, free and clear of all
manner of liens,
pledges, encumbrances, charges and claims thereon;
(b) The certificates required by Section 6.5;
(c) Such other certified resolutions, documents and
certificates as are required to be delivered by SGI and UNICO pursuant
to the
provisions of this Agreement.
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8.3
Items to be Delivered by UNICO. At the Closing, UNICO will
deliver or cause to be delivered to SGI:
(a) The certificates required by Sections 7.5;
(b) Such other certified resolutions, documents and
certificates as are required to be delivered by UNICO pursuant
to the provisions
of this Agreement.
(c) The preferred and common stock certificates to be
delivered hereunder.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1
Survival. SGI, SI and UNICO and UNICO agree that their respective
representations, warranties, covenants and agreements contained
in this
Agreement shall survive the Closing for a term of three (3) years
with the
exception of those regarding taxes which shall survive until the
expiration of
the respective periods within which such taxes may be assessed.
9.2
Indemnification. SGI and UNICO each agree to save, defend and
indemnify the other against and hold it harmless from any and all
liabilities,
of every kind, nature and description, fixed or contingent (including,
without
limitation, counsel fees and expenses in connection with any action,
claim or
proceeding relating to such liabilities) arising out of any misrepresentation
made by such indemnifying party or any transaction or event commencing
or
occurring on or prior to the Closing Date, which is not fully disclosed
or
provided for in UNICO's or UNICO's Balance Sheet, this Agreement
or the exhibits
hereto, including, without limitation, any tax liabilities to the
extent not so
reflected or reserved against in the respective Balance Sheets.
Any valid claims
for indemnification shall be paid for with common shares, meaning
if SGI must
indemnify, UNICO may cancel outstanding shares held by SGI and
if UNICO must
indemnify it will issue additional shares to SGI. In either event,
the shares
will be valued at market value at the time of cancellation or issuance,
as the
case may be.
9.3
Defense of Claims. An indemnified party shall notify the
indemnifying party with reasonable promptness of any claim asserted
against it
in respect of which the indemnifying party may be liable under
this Agreement,
which notification shall be accompanied by a written statement
setting forth the
basis of such claim and the manner of calculation thereof. The
indemnifying
party shall have the right to defend any such claim at its own
expense and with
counsel of its choice; provided, however, that such counsel shall
have been
approved by the indemnified party prior to engagement; which approval
shall not
be unreasonably withheld or delayed; and
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provided further, that the indemnified party may participate in
such defense, if
it so chooses, with its own counsel and at its own expense.
9.4
Rights Without Prejudice. The rights of UNICO and SGI under this
Article IX are without prejudice to any other rights or remedies
that either may
have by reason of this Agreement or as otherwise provided by law.
ARTICLE X
TERMINATION AND WAIVER
10.1
Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Agreement may be terminated and the transactions
provided
for herein abandoned at any time prior the Closing Date:
(a) By mutual consent of the Board of Directors of UNICO
and SGI;
(b) By UNICO if any of the conditions set forth in Article
VI hereof shall not have been fulfilled on or prior to the Closing
Date, or
shall become incapable of fulfillment at any time, and shall not
have been
waived;
(c) By SGI if any of the conditions set forth in Article
VII hereof shall not have been fulfilled on or prior to the Closing
Date, or
shall have become incapable of fulfillment at any time, and shall
not have been
waived;
(d) By SGI or UNICO if any material legal action or
proceedings shall have been instituted or threatened seeking to
restrain,
prohibit, invalidate or otherwise affect the consummation of the
transactions
contemplated by this Agreement which makes it inadvisable, in the
judgment of
SGI or UNICO, to consummate same.
In
the event that the Agreement is terminated as described above,
this Agreement shall be void and of no force and effect, without
any liability
or obligation on the part of any of the parties hereto.
10.2
Waiver. Any condition to the performance of either party which
legally may be waived on or prior to the Closing Date may be waived
at any time
by the party entitled to the benefit thereof by action taken or
authorized by an
instrument in writing executed by the relevant party. The failure
of any party
at any time or times to require performance of any provision hereto
shall in no
manner effect the right of such party at a later time to enforce
the same. No
waiver by any party of the breach of any term, covenant, representation
or
warranty contained in this Agreement shall release or affect any
liability
resulting from such breach, and no
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waiver of any nature, whether by conduct or otherwise, in any one
or more
instances, shall be deemed to be or construed as a further or continuing
waiver
of any such condition or of any breach of any other term, covenant,
representation or warranty of this Agreement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1
Expenses. Each of the parties hereto shall bear its own expenses
in connection herewith.
11.2
Confidential Information. Each party agrees that such party and
its representatives will hold in strict confidence all information
and documents
received from the other parties and, if the transactions herein
contemplated
shall not be consummated, each party will continue to hold such
information and
documents in strict confidence and will return to such other party
all such
documents (including the documents annexed to this Agreement) then
in such
receiving party's possession without retaining copies thereof;
provided,
however, that each party's obligations under this Section 11.2
to maintain such
confidentiality shall not apply to any information or documents
that are in the
public domain at the time furnished by the others or that become
in the public
domain thereafter through any means other than as a result of any
act of the
receiving party or of its agents, officers, directors or shareholders
which
constitutes a breach of this Agreement, or that are required by
applicable law
to be disclosed.
11.3
Modification, Termination or Waiver. This Agreement may be
amended, modified, superseded or terminated, and any of the terms,
covenants,
representations, warranties or conditions hereof may be waived,
but only by a
written instrument executed by the party waiving compliance. The
failure of any
party at anytime or times to require performance of any provision
hereof shall
in no manner affect the right of such party at a later time to
enforce the same.
11.4
Publicity. The parties agree that no publicity release or other
public announcement concerning the transactions contemplated by
this Agreement
shall be issued by either party without the advance approval of
both the form
and substance of the same by the other party and its counsel, which
approval, in
the case of any publicity, release or other public announcement
required by
applicable law, shall not be unreasonably withheld or delayed.
11.5
Notices. Any notice or other communication required or which may
be given hereunder shall be in writing and either be delivered
personally or by
reputable overnight delivery service, or be mailed, certified or
registered
mail, postage prepaid, as follows:
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If to UNICO, to:
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and if to SGI, to:
▇▇. ▇▇▇ ▇▇▇▇
Starlicon Group, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The
parties may change the persons and addresses to which the notices
or other communications are to be sent by giving written notices
of any such
change in the manner provided herein for giving notice.
11.6
Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of
the parties
hereto; provided, however, that no assignment of any rights or
delegation of any
obligations provided for herein may be made by any party without
the express
consent of the other parties.
11.7
Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
11.8
Exhibits. All Exhibits annexed hereto and the documents and
instruments referred to herein or required to be delivered simultaneously
herewith or at the Closing are expressly made a part of this Agreement
as fully
as though completely set forth herein, and all references to this
Agreement
herein or in any of such Exhibits, documents or instruments shall
be deemed to
refer to and include all such Exhibits, documents and instruments.
11.9
Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California
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applicable to agreements made and to be performed entirely within
that state,
excluding the choice of law rules thereof.
11.10
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, but which together
shall
constitute one and the same instrument.
11.11
Section Headings. The section headings contained in this
Agreement are inserted for convenience of reference only and shall
not affect
the meaning or interpretation of this Agreement.
11.12
Exhibit. This Agreement may be executed prior to the
preparation of all Exhibits. If such occurs, this shall not be
deemed a
completed Agreement until the Exhibits have been prepared, exchanged,
accepted
and initialed or signed by SGI and UNICO.
11.13
Continued Nasdaq Listing. The parties acknowledge that the
transaction contemplated by this Agreement will constitute a change
in control,
business or financial structure as defined by Nasdaq. Accordingly,
after
Closing, UNICO will be required to meet Nasdaq's Small Cap Market
Entry
Standards. The parties agree to use their best efforts to assure
UNICO's
continued Nasdaq listing.
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WITNESS
the execution of this Agreement as of the date first above
written.
UNICO, INC.
STARLICON GROUP,INC.
BY: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BY: /s/ ▇▇▇ ▇▇▇▇
---------------------------------
--------------------------------
NAME: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
NAME: ▇▇. ▇▇▇ ▇▇▇▇
-------------------------------
------------------------------
TITLE: CEO, Chairman
TITLE: President
-----------------------------
-----------------------------
STARLICON INTERNATIONAL,INC.
BY: /s/ ▇▇▇▇▇, WING PO
---------------------------------
NAME: ▇▇▇▇▇, Wing Po
-------------------------------
TITLE: Vice President
-------------------------------
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