AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
THIS PLAN AND AGREEMENT OF MERGER (hereinafter called the "Agreement"),
dated as of August 15, 2000, is by and between PROVIDENCE CAPITAL I, INC., a
Colorado corporation (hereinafter referred to as "PROVIDENCE" and/or
"Surviving Corporation"), and UNITED AMERICAN COMPANIES,INC. a North Carolina
corporation (hereinafter called "UAC" and/or "Disappearing Corporation"), said
corporations being hereafter sometimes collectively referred to as the
"Constituent Corporations."
WITNESSETH:
WHEREAS, PROVIDENCE is a corporation duly organized and existing under
the laws of the State of Colorado, having been incorporated in 1999, and UAC
is a corporation duly organized and existing under the laws of the State of
North Carolina, having been incorporated in 2000; and
WHEREAS, the authorized capital stock of PROVIDENCE consists of fifty
million (50,000,000) shares of $.001 par value Common Stock, of which one
million five hundred thousand (1,500,000) shares are outstanding, and fifty
million (50,000,000) shares of Preferred Stock, $.001 par value, of which no
shares are outstanding; and
WHEREAS, the authorized capital stock of UAC consists of one hundred
million (100,000,000) shares of no par value Common Stock, of which thirteen
million five hundred thousand (13,500,000) shares are outstanding and reserved
for issuance, and fifty million (50,000,000) shares of Preferred Stock, of
which no (0) shares are outstanding; and
WHEREAS, the Boards of Directors of the Constituent Corporations deem it
advisable for the general welfare and advantage of the Constituent
Corporations and their respective shareholders that the Constituent
Corporations merge pursuant to this Agreement and pursuant to the applicable
provisions of the laws of the States of Colorado and North Carolina; and
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereby agree, in accordance with the
applicable provisions of the laws of the States of Colorado and North
Carolina, that the Constituent Corporations shall merge, to wit: United
American Companies, Inc., a North Carolina corporation, one of the Constituent
Corporations and which shall cease its existence under the laws of the State
of North Carolina pursuant to the Merger (said corporation hereafter being
sometimes called the "Disappearing Corporation"), and the terms and conditions
of the Merger hereby agreed upon (hereafter called the "Merger") which the
parties covenant to observe, keep and perform and the mode of carrying the
same into effect are and shall be as hereafter set forth:
A. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended (the "Code"). For accounting purposes, it is intended that
the Merger be accounted for using purchase accounting;
B. This Agreement has been approved by the respective boards of directors
of PROVIDENCE and UAC;
C. PROVIDENCE has 1,500,000 shares issued and outstanding ("PROVIDENCE
Common Stock"), constituting all of the outstanding capital stock of
PROVIDENCE. Contemporaneously with the execution and delivery of this
Agreement, the parties are executing and delivering to PROVIDENCE certain
other agreements;
D. PROVIDENCE will issue up to thirteen million five hundred thousand
(13,500,000) restricted shares of common stock (the "Shares") to allow for the
conversion of shares to be completed on a one for one basis as more fully
described in Section 1.4 below.
AGREEMENT
The parties to this Agreement agree as follows:
ARTICLE I
DESCRIPTION OF TRANSACTION
1.1 Merger of UAC into PROVIDENCE.
Upon the terms and subject to the conditions set forth in this Agreement, at
the Effective Time, UAC shall be merged with and into PROVIDENCE, and the
separate existence of UAC shall cease. PROVIDENCE will continue as the
surviving corporation in the Merger and will change its name to "United
American Companies, Inc."
1.2 Effect of the Merger.
The Merger shall have the effects set forth in this Agreement and in the
applicable provisions of the Colorado Business Corporation Act.
1.3 Closing; Effective Time.
The consummation of the transactions contemplated by this Agreement (the
"Closing") shall take place at the offices of Xxxxxx & Xxxxxxx, P.C., 1250
Turks Head Building at 10:00 a.m. on August 15, 2000, 2000 or at such other
time and date as the parties may agree (the "Scheduled Closing Time"). (The
date on which the Closing actually takes place is referred to in this
Agreement as the "Closing Date.")
Contemporaneously with or within forty-eight (48) hours after the Closing, a
properly executed agreement of merger, together with fully executed articles
of merger (a copy of which is attached hereto as Exhibit A) conforming to the
requirements of Article 7-111 of the Colorado Business Corporation Act, shall
be filed with the Secretary of State of Colorado (the "Secretary"). The
Merger shall become effective at the time such agreement and articles of
merger are filed with the Secretary (the "Effective Time").
1.4 Conversion of Shares.
The mode of carrying into effect the Merger provided in this Agreement, and
the manner and basis of converting the shares of the Constituent Corporations
into shares of the Surviving Corporation are as follows:
1:4:1 PROVIDENCE Common Stock.
None of the currently issued and outstanding shares of PROVIDENCE Common
Stock, $.001 par value, issued and outstanding at the effective time of the
Merger shall be converted as a result of the Merger, and all of such shares
shall remain issued and outstanding shares of common stock of the Surviving
Corporation.
1:4:2 UAC Common Stock.
At the Effective Time, each share of no par value common stock of UAC issued
and outstanding (the "UAC Common Stock") shall be converted into and become
shares of common stock of the Surviving Corporation by converting each share
of UAC common stock into one (1) share of PROVIDENCE. PROVIDENCE will newly
issue up to thirteen million five hundred thousand (13,500,000) shares to be
converted on a one for one basis with the Shares of PROVIDENCE. Each record
holder of outstanding common stock of UAC shall be issued shares of
PROVIDENCE, upon the ratio set forth above. Upon direction of UAC and receipt
by PROVIDENCE of the stock ledger of UAC, each UAC shareholder shall be
entitled to receive one or more stock certificates for the full number of
shares of common stock of PROVIDENCE into which the common stock of UAC shall
have be converted as aforesaid together with any dividends on the common stock
of UAC as to which the payment date shall have occurred on or prior to the
date of the surrender of said shares. UAC shareholders will own approximately
90% of the or Thirteen million five (13,500,000) of the fully diluted, common
shares of the Surviving Corporation issued and outstanding. All Shares of
common stock of the Surviving Corporation into which shares of UAC Common
Stock are converted as herein provided shall be fully paid and non-assessable
and shall be issued in full satisfaction of all rights pertaining to such
Shares.
1.5 Closing of UAC's Transfer Books.
At the Effective Time, holders of certificates representing shares of UAC's
common stock that were outstanding immediately prior to the Effective Time
shall cease to have any rights as Stockholders of UAC, and the stock transfer
books of UAC shall be closed with respect to all shares of such common stock
outstanding immediately prior to the Effective Time. As soon as practicable
after the Effective Time, the stock ledger representing common stock of UAC
issued and outstanding at the time the Merger becomes effective shall be
delivered to the Surviving Corporation, such that certificates for the Shares
may be issued, as above provided. No further transfer of any such shares of
UAC's common stock shall be made on such stock transfer books after the
Effective Time. If, after the Effective Time, a valid certificate previously
representing any of such shares of UAC's common stock (a "UAC Stock
Certificate") is presented to PROVIDENCE, such UAC Stock Certificate shall be
canceled and shall be exchanged as provided in Section 1.6.
1.6 Exchange of Certificates.
(a) Upon surrender of a UAC Stock Certificate to the Surviving Corporation
for exchange, together with such other documents as may be reasonably required
by the Surviving Corporation, the holder of such UAC Stock Certificate shall
be entitled to receive in exchange therefor a certificate representing the
number of whole shares of the Surviving Corporation Common Stock that such
holder has the right to receive pursuant to the provisions of Section 1.4, and
UAC Stock Certificate so surrendered shall be canceled. Until surrendered as
contemplated by this Section 1.6, each UAC Stock Certificate shall be deemed,
from and after the Effective Time, to represent only the right to receive upon
such surrender a certificate representing shares of the Surviving Corporation
Common Stock (and cash in lieu of any fractional share of the Surviving
Corporation Common Stock) as contemplated by Section 1.4. If any UAC Stock
Certificate shall have been lost, stolen or destroyed, the Surviving
Corporation may, in its discretion and as a condition precedent to the
issuance of any certificate representing the Surviving Corporation Common
Stock, require the owner of such lost, stolen or destroyed UAC Stock
Certificate to provide an appropriate affidavit and to deliver a bond (in such
sum as the Surviving Corporation may reasonably direct) as indemnity against
any claim that may be made against the Surviving Corporation with respect to
such UAC Stock Certificate.
(b) No dividends or other distributions declared or made with respect to
the Surviving Corporation Common Stock with a record date after the Effective
Time shall be paid to the holder of any unsurrendered UAC Stock Certificate
with respect to the shares of the Surviving Corporation Common Stock
represented thereby, and no cash payment in lieu of any fractional share shall
be paid to any such holder, until such holder surrenders such UAC Stock
Certificate in accordance with this Section 1.6 (at which time such holder
shall be entitled to receive all such dividends and distributions and such
cash payment).
(c) No fractional shares of the Surviving Corporation Common Stock shall
be issued in connection with the Merger, and no certificates for any such
fractional shares shall be issued. In lieu of such fractional shares, any
holder of capital stock of UAC who would otherwise be entitled to receive a
fraction of a share of the Surviving Corporation Common Stock (after
aggregating all fractional shares of the Surviving Corporation Common Stock
issuable to such holder) shall, upon surrender of such holder's UAC Stock
Certificate(s), have such fractional interest rounded up to the nearest whole
number.
(d) The Surviving Corporation shall not be liable to any holder or former
holder of common stock of UAC for any shares of the Surviving Corporation
Common Stock (or dividends or distributions with respect thereto), or for any
cash amounts, delivered to any public official pursuant to any applicable
abandoned property, escheat or similar law.
1.7 UAC Stockholder Approval; Dissenting Shares.
At the Closing UAC shall deliver to Providence a certificate of each of the
stockholders of UAC (the "UAC Stockholders") whereby each agrees and
acknowledges the following:
(a) that the terms of the Merger, this Agreement, and all other agreements
contemplated herein are hereby approved, ratified and confirmed and the
officers of UAC are, and each of them hereby is, authorized and directed, in
the name and on behalf of UAC, to consummate the transactions contemplated by
this Agreement, on the terms set forth in such documents and such other
agreements, and any amendments thereto, as the officers executing such
agreements may in their discretion deem reasonable and appropriate; and
(b) that he or she hereby agrees to waive any "appraisal rights" within
the meaning of Section 55-13-01, et seq. of the North Carolina Business
Corporation Act with respect to the Merger.
1.8 Governing Law; Articles of Incorporation
The laws which are to govern the Surviving Corporation are the laws of
the State of Colorado. The Articles of Incorporation of PROVIDENCE, as
heretofore amended, shall, prior to the effective time of the Merger, be
amended to the extent set forth in Paragraph ______ of the Articles of Merger,
attached hereto, to amend the name of PROVIDENCE, Inc. to United American
Companies, Inc. As so amended, such Articles of Incorporation shall remain in
thereafter until the same shall be further amended or altered in
accordance with the provisions thereof.
1.9 Bylaws
The Bylaws of PROVIDENCE (a copy of which is attached as Exhibit B), at
the Effective Time shall be the Bylaws of the Surviving Corporation until the
same shall be altered or amended in accordance with the provisions thereof.
1.10 Directors and Officers
Directors. At the Effective Time, the Directors of the Surviving Corporation
shall be as set forth below, until their respective successors are duly
elected and qualified at the next annual meeting of shareholders of the
Surviving Corporation. As of the Effective Time, the previous directors of
PROVIDENCE shall resign.
Officers. The names, titles and addresses of the persons who, upon the
Effective Time, shall constitute the officers of the Surviving Corporation,
and who shall hold office, subject to the Bylaws, until the first meeting of
directors following the next annual meeting of shareholders, are as follows:
Date First
Became Positions and Offices
Name Age Director With the Company**
----------------- ----- ----------- ---------------------
Xxxx X. Xxxxxx 50 Chairman, Executive Vice
President,
Secretary and Director
Xxxxxx X. Xxxxxxxx 37 CEO, President and Director
Xxxxxxx Xxxxxxx 59 Chief Financial Officer,
Treasurer
and Director
Xxxxxxx X. Xxxx 65 Executive Vice President,
Retail
Liquidation Services
Xxxxxxxx X. Xxxxxxxx 68 Director
Xxxxxxx X. Xxxxx 51 Director
1.11 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section
368(a)(1)(A) of the Code. The parties to this Agreement hereby adopt this
Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the IRS Regulations.
1.12 Accounting Treatment. For accounting purposes, the Merger is
intended to be accounted for as a purchase under GAAP.
1.13 Further Action. If, at any time after the Effective Time, any further
action is determined by the Surviving Corporation to be necessary or desirable
to carry out the purposes of this Agreement or to vest the Surviving
Corporation with full right, title and possession of and to all rights and
property of UAC, the officers and directors of the Surviving Corporation shall
be fully authorized (in the name of UAC and otherwise) to take such action.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF UAC AND ITS STOCKHOLDERS
Except as set forth in the schedule of disclosure to be delivered to
PROVIDENCE two (2) business days prior to the Scheduled Closing Date (the
"Disclosure Schedule"), UAC hereby represents and warrants as follows:
2.1 Organization, Standing and Qualification.
UAC is a corporation in existence under the laws of the State of North
Carolina, and has all requisite corporate power and authority to own, to lease
or to operate its properties and to carry on its business as it is now being
conducted. Section 2.1 of the Disclosure Schedule shall set forth a true,
complete and correct list of each jurisdiction, foreign or domestic, in which
it (a) owns or leases property, has employees or otherwise conducts operations
and/or (b) is licensed or qualified to do business as a foreign corporation.
UAC is duly licensed or qualified to do business as a foreign corporation in
each jurisdiction in which the character of its properties, owned or leased,
or the nature of its activities, makes such licensing or qualification
necessary, except for where the failure to be so licensed and qualified would
not have a material adverse effect on the business of UAC.
2.2 Authority.
The execution and delivery of this Agreement has been authorized by the Board
of Directors of UAC, and the completion of these transactions have been duly
and validly authorized by all necessary corporate and shareholder action on
the part of UAC. This Agreement has been duly executed and delivered by UAC
and, assuming the due and valid execution and delivery of this Agreement by
the other parties hereto, constitutes the legal, valid and binding obligation
of UAC, to the extent applicable, enforceable in accordance with its terms,
all as may be subject to or affected by any bankruptcy, reorganization,
insolvency, moratorium or similar laws of general application from time to
time in effect and relating to or affecting the rights or remedies of creditors
generally.
2.3 No Conflict, Breach, Default or Violation.
Except as set forth in Section 2.3 of the Disclosure Schedule, the execution
and delivery of this Agreement does not, and the completion of transactions
contemplated by this Agreement will not conflict with, result in a breach of
or the acceleration of any obligation under, or constitute a default or event
of default (or event which with notice or lapse of time or both would
constitute a default) under, any provision of any charter, bylaw, indenture,
mortgage, lien, lease, license, agreement, contract, permit, order, judgment,
or, to the best of the UAC's knowledge, any judicial or administrative decree,
ordinance or regulation, or any restriction to which any property of UAC is
subject or by which UAC is bound, the result of which would have a material
adverse effect on the business of UAC.
2.4 Approvals.
Except as set forth in Section 2.4 of the Disclosure Schedule, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any court, administrative agency or commission or other governmental
agency or instrumentality, domestic or foreign (a "Governmental Entity"), or
third party is required by or with respect to UAC in connection with the
execution and delivery by UAC of this Agreement, or the completion of the
transactions contemplated hereby, the absence of which would have a material
adverse effect on UAC.
2.5 Capitalization.
The authorized capital stock of UAC consists of one hundred million
(100,000,000) shares of UAC Common Stock, no par value per share, of which
thirteen million five-hundred thousand (13,500,000) are issued and outstanding
or are reserved for issuance prior to the Closing Date and fifty million
(50,000,000) shares of UAC Preferred Stock, of which none are issued and
outstanding. The UAC shares are validly issued, fully paid and non-assessable
and not subject to preemptive rights. Section 2.5 of the Disclosure Schedule
shall set forth a true, complete and correct list of (i) the holders of record
of the issued and outstanding shares of UAC Common Stock, and (ii) all claims,
commitments or agreements to which UAC is a party or by which it is bound,
obligating UAC to issue, deliver or sell, or to cause to be issued, delivered
or sold, additional shares of common stock of UAC or obligating UAC to grant,
extend or enter into any such option, warrant, call, right or agreement with
respect to its capital stock. Except as set forth in Section 2.5 of the
Disclosure Schedule, there are, as of the Effective Time there will be, no
agreements obligating UAC to redeem, repurchase or otherwise acquire the
common stock of UAC, or any other securities issued by it, or to register the
sale of the common stock of UAC under applicable securities laws. Except as
set forth in Section 2.5 of the Disclosure Schedule, there are, as of the
Effective Time there will be, no agreements or arrangements prohibiting or
otherwise restricting the payment of dividends or distributions to the UAC
Shareholders by UAC.
2.6 Financial Statements.
UAC has furnished, or will be furnished five (5) business days prior to the
Scheduled Closing Date, to PROVIDENCE true, complete and correct copies of
the unaudited balance sheet at June 30, 2000 and the related unaudited income
statement, and statements of operations, cash flows and changes in
stockholders equity for the period then ended (all of these financial
statements being collectively referred to herein as the "UAC Financials").
The UAC Financials are in accordance in all material respects with the books
and records of UAC, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the financial position of UAC as at the date thereof.
2.7 Liabilities.
To the best of UAC's knowledge, except as set forth in Section 2.7 of the
Disclosure Schedule, UAC has no liabilities or obligations, either accrued,
absolute, contingent, or otherwise, required to be but not reflected or
reserved against in the UAC Financials in accordance with generally accepted
accounting principles, except those incurred in the ordinary course of
business, or those that are not material, and UAC knows of no potential
liability that would result in material adverse effect on the business of UAC,
other than those (a) reflected or reserved against in the UAC Financials, (b)
incurred in the ordinary course of business since June 30, 2000 or (c) set
forth in Section 2.7 of the Disclosure Schedule.
2.8 Additional Information.
Section 2.8 of the Disclosure Schedule shall set forth a true, complete and
correct list, or shall reference an attachment thereto, of the following items:
2.8.1 Real Property.
All real property and structures thereon, presently (i) owned by, or subject
to a contract of purchase and sale or option agreement involving UAC
(collectively, the "Real Property"), (ii) leased by, or subject to a lease
commitment involving, UAC (collectively, the "Leased Property"), with a descript
ion of: (x) the general use to which such real property is or was put; (y) the
general nature and amount of any Encumbrances thereon; and (z) if leased the
name of the lessor and a true, complete and correct copy of any written
agreement pursuant to which such real property is leased.
2.8.2 Machinery and Equipment.
All machinery, work product, tools, equipment, furnishings, and fixtures
(excluding such items that had a cost basis of $20,000 or less at the date of
the Disclosure Statement) owned, leased or subject to a contract of purchase
and sale or lease commitment, by UAC with, to the extent practical, a
description with respect to each such of: (i) the serial number of such item;
(ii) the general location at which such item is kept; (ii) whether such item
is owned or leased; (iv) if owned, a general description of the nature and
amount of any Encumbrances thereon; and (v) if leased, the name of the lessor
and a true, complete and correct copy of any written agreement pursuant to
which such item is leased.
2.8.3 Receivables.
All accounts and notes receivable presently owned by UAC, together with an
appropriate aging schedule, as of June 30, 2000, which list separately all
amounts receivable from the UAC Shareholders, director, officer, employee, or
agent of UAC, from or from many of their respective affiliates. Except as set
forth on Section 2.8.3 of the Disclosure Schedule, to the best of UAC's
knowledge, all accounts and notes receivable of UAC represent bona fide claims
against debtors for services performed or other charges arising in the
ordinary course of business and are subject to no material defenses,
counterclaims or rights of set-off.
2.8.4 Payables.
All accounts and notes payable owed by UAC, together with an appropriate aging
schedule, as of June 30, 2000, which list separately all such amounts payable
to any UAC Shareholder, director, officer, employee, or agent of UAC, to UAC
Shareholders or to any of the irrespective affiliates. Except as set forth in
Section 2.8.4 of the Disclosure Schedule, to the best of UAC's knowledge, all
accounts and notes payable of UAC represent bona fide claims against UAC for
services performed or other charges arising in the ordinary course of business.
2.8.5 Contracts.
All contracts, agreements and commitments of UAC, whether or not made in the
ordinary course of business, including leases under which UAC is lessor or
lessee, which are to be performed in whole or in part after the Effective
Time, and which (i) involve or may involve aggregate payments by or to UAC of
$20,000 or more after the Effective Time, (ii) are not terminable by UAC
without premium or penalty on 60 (or fewer) days' notice, (iii) purport to
prohibit or restrict the ability of UAC to participate or compete in any
material line of business or with any person, (iv) purport to prohibit or
restrict another person's ability to be in the line of business of UAC or to
compete with UAC or (v) are otherwise material to the business or properties
of UAC. To the best of UAC's knowledge, except as set forth on Schedule 2.8.5
of the Disclosure Schedule, UAC has complied in all material respects with all
commitments, contracts, agreements and obligations pertaining to it listed on
Section 2.8.5 of the Disclosure Schedule and is not and will not be as of the
date of the Disclosure Schedule, in material default under any such contracts
and agreements and no notice of material default has been received, in each
case which would have a material adverse effect on the business of UAC.
2.8.6 Licenses; Permits.
All approvals, authorizations, consents, licenses, orders, franchises, rights,
registrations and permits of any type held by UAC, which together constitute
all material approvals, authorizations, consents, licenses, orders,
franchises, rights, registrations and permits (the "Permits") required to
operate its business as presently conducted. To the best of UAC's knowledge,
except as set forth on Section 2.8.6 of the Disclosure Schedule, all such
Permits are currently in full force and effect and UAC is in compliance
therewith, except to the extent noncompliance would not have a material
adverse effect on the business of UAC. Except as set forth in Section 2.8.6 of
the Disclosure Schedule, the execution and delivery of this Agreement and the
completion of the transactions contemplated hereby will not result in any
revocation, cancellation, suspension or modification of any such approval,
authorization, consent, license, order, franchise, right, registration or
permit, which revocation, cancellation, suspension or modification would have
a material adverse effect on the business of UAC.
2.8.7 Employment Agreements.
All oral or written employment or consulting agreements to which UAC is a
party or by which UAC is bound, including, without limitation, all oral or
written employment or consulting agreements or any other arrangements with any
person which provide for the payment of any consideration by UAC to such
person as a result of the termination of such person's employment with UAC, or
on the completion of the transactions contemplated hereby.
2.8.8 Insurance Policies.
All (i) policies of property, fire and casualty, product liability, worker's
compensation, professional liability and title insurance and other forms of
insurance, under which UAC is insured, and (ii) bonds issued or posted by any
person which respect to any operation or other activities of UAC.
2.8.9 Transactions with Management.
All material contracts, leases and commitments by and between UAC and any of
its officers, directors, stockholders, employees, or agents, or any affiliate
of any such person. Except as set forth in Section 2.9 of the Disclosure
Schedule, none of the officers, directors, stockholders, or employees of UAC
owns, leases or licenses any interest in any asset used by UAC in its
business, other than solely by and through ownership of the capital stock of
UAC.
2.8.10 Assumed Names.
All assumed or fictitious names under which UAC engages in or conducts any
business.
2.9 Litigation.
Except as shall be set forth in Section 2.9 of the Disclosure Schedule, there
is no suit, action, proceeding or investigation pending or, to the best
knowledge of UAC, threatened against or affecting UAC (or any of its officers
or directors in connection with the business of UAC), nor is there any
outstanding judgment, order, writ, injunction or decree against UAC.
2.10 Absence of Certain Changes.
Except as shall be set forth in Section 2.10 of the Disclosure Schedule, to
the best of UAC's knowledge, since June 30, 2000, there has not been: (i) any
material adverse change in the financial condition, assets, liabilities
(contingent or otherwise), income or business of UAC; (ii) any damage,
destruction or loss (whether or not covered by insurance) materially and
adversely affecting the properties or business of UAC; (iii) any declaration
or payment of any dividend or distribution in respect of the capital stock or
any direct or indirect redemption, purchase or other acquisition of any of the
capital stock of UAC; (iv) any increase in the compensation, bonus, sales
commissions or fee arrangement payable or to become payable by UAC to any of
its officers, directors, employees, consultants or agents other than raises or
increases in compensation consistent with prior policy that are not in excess
of five percent of the individual's annual compensation or hourly rate; (v)
the creation of any material Encumbrance on any of the assets of UAC, or the
amendment, modification or extension of any existing material Encumbrance on
any such asset other than any such creation, amendment, modification or
extension effected (A) in the ordinary course of business, (B) as required in
connection with the UAC Merger, (C) in connection with the transfer of those
certain assets set forth on Section 2.10 of the Disclosure Schedule; or (D)
for current taxes or assessments which are not yet due, or being contemplated
in good faith by appropriate proceedings; (vi) any sale, assignment, transfer,
conveyance, lease, hypothecation, abandonment or other disposition of or
agreement to sell, assign, transfer, convey, lease, hypothecate, abandon or
otherwise dispose of, any of the material assets of UAC, other that (A) assets
sold in the ordinary course of business; (B) the assets set forth on Section
2.10 of the Disclosure Schedule; or (C) any assets which are scrapped as
obsolete in conformance with customary procedure.
2.11 Title to Assets; Encumbrances.
2.11.1 Except as shall be set forth in Section 2.11 of the Disclosure
Schedule, UAC owns its material assets, whether real, personal or intangible,
free and clear of all Encumbrances, except for (i) liens for current taxes and
assessments not yet due, or being contested in good faith by appropriate
proceedings, (ii) mechanic's liens arising under the operation of law or for
actions contested in good faith or for which payment arrangements have been
made, (iii) liens granted or incurred by UAC in the ordinary course of its
business or in connection with the financing of office space, furniture and
equipment in the ordinary course of its business, (iv) easements, covenants,
restrictions and other exception to title of record (which do not materially
and adversely affect the operation of UAC), (v) Encumbrances otherwise
described in Section 2.11 of the Disclosure Schedule, or (vi) Encumbrances
reflected on the balance sheet at December 31, 1998 of UAC;
2.11.2 Except as shall be set forth on Section 2.11 of the Disclosure
Schedule, there are no parties in possession of any of the material assets of
UAC other than UAC, other than personal property held by third parties in the
reasonable and ordinary course of business. Subject to the Encumbrances set
forth in Section 2.11 of the Disclosure Schedule or described in Section
2.11.1, UAC enjoys full, free and exclusive use and quiet enjoyment of its
material assets and its rights pertaining thereto. Subject to the Encumbrances
set forth in Section 2.11 of the Disclosure Schedule or described in Section
2.11.1, UAC enjoys peaceful and undisturbed possession under all leases under
which it is lessee.
2.12 Condition of Assets.
Except as set forth in Section 2.12 of the Disclosure Schedule, to the best of
UAC's knowledge, each of the buildings, structures, equipment or other items
of tangible personal property of UAC with a cost basis of at least $20,000 is
in working order and repair, ordinary wear and tear excepted.
2.13 Taxes and Returns.
2.13.1 Except as set forth on Section 2.13 of the Disclosure Schedule, UAC
or its subsidiary entities has (i) filed all material tax returns and reports
required to be filed by it and (ii) paid all material taxes which it has
incurred and which have become due and payable, except such as are being or
may be contested in good faith by appropriate proceedings or relate to the
fiscal year ended December 31, 1999. Except as set forth on Section 2.13 of
the Disclosure Schedule, no deficiencies for any taxes have been proposed,
asserted, or formally assessed against UAC, and no requests for waivers of the
time to assess any such tax are pending. The UAC Financials reflect an
adequate accrual, based on the facts and circumstances existing as of the date
hereof, for all material taxes payable by UAC (whether or not shown on any
return) through the date thereof. Section 2.13 of the Disclosure Schedule
shall include true, complete and correct copies of all tax returns and reports
filed by UAC since January 1, 1998.
2.13.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross receipt,
payroll, estimated sales, employment, use, property, withholding, excise and
other taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts.
2.14 Employment Practices.
Except as set forth in Section 2.14 of the Disclosure Schedule, UAC has
complied with the Occupational Safety and Health Act and all other laws
relating to equal employment of labor including, without limitation, laws
relating to equal employment opportunity and employment discriminations,
employment of illegal aliens, wages, hours and collective bargaining, the
violation or failure to comply with which would have a material adverse effect
on the business of UAC. Notwithstanding anything herein to the contrary, and
except as set for in Section 2.14 of the Disclosure Schedule, UAC has complied
with all laws relating to the collection and payment of social security and
withholding taxes, or both, and similar taxes except where the failure to
comply with such laws would not have a material adverse effect on the business
of UAC. Except as set forth in Section 2.14 of the Disclosure Schedule, UAC is
not liable for any arrearage of wages or any taxes or penalties for failure to
comply with any of the foregoing, which would have a material adverse effect
on the business of UAC.
2.15 Compliance with Law.
Except as set forth in Section 2.15 or any other Section of the Disclosure
Schedule, to the best knowledge of UAC, UAC is in compliance with and is not
in violation of or in default with respect to, or in alleged violation of or
alleged default with respect to: (a) any applicable law, rule, regulation or
statute applicable to the operations of UAC, or (b) any order, permit,
certificate, writ, judgment, injunction, decree, determination, award or other
decision of any court or any Government Entity to which UAC is a party or by
which UAC is bound, which violation or default or alleged violation or default
would materially and adversely affect the business of UAC.
2.16 Environmental Requirements and Health and Safety Requirements.
To the best of UAC's knowledge, Section 2.16 of the Disclosure Schedule sets
forth true, correct and complete copies of all material claims and complaints,
or reports or other documents related to such material claims or complaints,
in the files of UAC made by or against UAC during the past three years
pursuant to Environmental Requirements or Health or Safety Requirements (other
than those documents which UAC has determined, in good faith and after
consultation with counsel, should remain protected by the attorney-client
privilege). At present, to the best of UAC's knowledge, none of the
operations of UAC is subject to any judicial or administrative proceeding,
order, judgment, decree or settlement alleging or addressing a material
violation of or a material liability under any Environmental Requirement or
any Health and Safety Requirement, except as set forth in Section 2.16 of the
Disclosure Schedule.
2.17 Books and Records.
All the stock records and minute books of UAC shall be delivered to or made
available upon request for inspection by PROVIDENCE not later than two (2)
business days prior to the Scheduled Closing Date. To the best of UAC's
knowledge, such stock records and minute books are true and correct in all
material respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PROVIDENCE
Representations and warranties shall be made by PROVIDENCE and shall survive
the Effective Time for a period of one (1) year. PROVIDENCE represents and
warrants to UAC as follows:
3.1 Organization and Standing.
PROVIDENCE is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado and is duly authorized,
qualified and in good standing under all applicable laws, regulations,
ordinances and orders of public authorities and has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
authorized, qualified or licensed would not have a material adverse effect on
the business of PROVIDENCE taken as a whole. PROVIDENCE is duly licensed or
qualified to do business as a foreign corporation in each jurisdiction in
which the character of its properties, owned or leased, or the nature of their
activities, makes such licensing or qualification necessary, except for where
the failure to be so licensed and qualified would not have a material adverse
effect on the business of PROVIDENCE.
True and correct copies of the Articles of Incorporation (certified by the
Secretary of State of the States of Colorado) are attached hereto as Exhibit
C.
3.2 Authority.
PROVIDENCE has the necessary corporate power and authority to enter into this
Agreement, as well as the Transaction Documents more fully defined in Section
6:4, and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and the Transaction Documents, and
the completion of the transactions contemplated hereby and thereby have been
duly authorized by corporate action of the part of the Board of Directors of
PROVIDENCE , and subject to the convening of a shareholder's meeting pursuant
to Article 7-111-101-109 of the Colorado Business Corporation Act in order to
approve this Agreement and the Transaction Documents, no further corporate
proceedings on the part of PROVIDENCE will be necessary. When issued pursuant
to this Agreement, the Shares of PROVIDENCE common stock to be issued to UAC
Shareholders on the Effective Time will be duly authorized, validly issued,
fully paid and non-assessable, and the PROVIDENCE Shares to be issued to UAC
Shareholders on the Effective Time shall be legally equivalent in all respects
to the PROVIDENCE Common Stock issued and outstanding as of the date hereof.
This Agreement has been executed and delivered by PROVIDENCE and constitutes
the legal, valid and binding obligation of PROVIDENCE, enforceable in
accordance with its terms. As of the Effective Time, each of the Transaction
Documents will constitute a legal, valid and binding obligation of PROVIDENCE,
each enforceable in accordance with its terms.
3.3 No Conflict, Default, Breach or Violation.
The execution and delivery of this Agreement does not, and the completion of
the transactions contemplated hereby and thereby will not, conflict with or
result in a breach of or the acceleration of any obligation under, or
constitute a default or event of default (or event which with notice or lapse
of time or both would constitute a default) under, any provision of any
charter, bylaw, indenture, mortgage, lien, lease, agreement, contract, order,
judgment, or, to the best knowledge of PROVIDENCE, any judicial or
administrative decree, ordinance or regulation, permit, license, franchise or
any restriction to which any property of PROVIDENCE or any of its subsidiaries
is subject or by which PROVIDENCE or any of its subsidiaries is bound, the
effect of which would be materially adverse to PROVIDENCE and its subsidiaries
taken as a whole. Neither PROVIDENCE nor any of its subsidiaries is alleged
to be in violation or default or under any applicable law, statute, order,
rule or regulation promulgated or judgment entered by any Governmental Entity,
relating to or affecting the operation, conduct or ownership of the property
or business of PROVIDENCE or such subsidiaries, which violation or default or
alleged violation or default would have a material, adverse effect, on
PROVIDENCE and its subsidiaries taken as a whole.
3.4 Approvals.
Except for usual and customary compliance with the Securities Act, the
securities or blue sky laws of various states, no consent, approval, order or
authorization of, or registration, declaration or filing with, any court,
administrative agency or commission or other governmental agency or
instrumentality, domestic or foreign (a "Governmental Entity"), or third party
is required by or with respect to PROVIDENCE in connection with the execution
and delivery by PROVIDENCE of this Agreement, or the completion of the
transactions contemplated hereby, the absence of which would have a material
adverse effect on PROVIDENCE.
3.5 SEC Documents; Filings; Financial Statements.
3.5.1 PROVIDENCE has delivered to UAC accurate and complete copies
(excluding copies of exhibits) of each report, registration statement (on a
form other than Form S-8) and definitive proxy statement filed by PROVIDENCE
with the SEC between November 1, 1999 and the date of this Agreement (the
"PROVIDENCE SEC Documents"). As of the time it was filed with the SEC (or, if
amended or superseded by a filing prior to the date of this Agreement, then on
the date of such filing): (i) each of the PROVIDENCE SEC Documents complied in
all material respects with the applicable requirements of the Securities Act
or the Exchange Act (as the case may be); and (ii) none of the PROVIDENCE SEC
Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
3.5.2 The consolidated financial statements contained in the PROVIDENCE
SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered, except as may be indicated in the notes to such financial
statements and (in the case of unaudited statements) as permitted by Form
10-QSB of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments; and (iii)
fairly present the consolidated financial position of PROVIDENCE and its
subsidiaries as of the respective dates thereof and the consolidated results
of operations of PROVIDENCE and its subsidiaries for the periods covered
thereby.
3.6 Information Supplied.
To the best knowledge of PROVIDENCE , no written statement, certificate,
schedule, list or other written information furnished by or on behalf of
PROVIDENCE to UAC on or prior to the date hereof in connection herewith
contains (after giving effect to any correction thereof furnished to UAC in
writing prior to the date hereof) any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated herein or
therein or necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
3.7 Capitalization of PROVIDENCE.
As of the date hereof, the authorized capital stock of PROVIDENCE consists of
fifty million (50,000,000) shares of PROVIDENCE Common Stock, $.001 par value,
of which one million five hundred thousand (1,500,000) shares of common stock
are issued and outstanding, and fifty million (50,000,000) shares of PROVIDENCE
Preferred Stock, $.001 par value, of which none are issued and outstanding.
All of the issued and outstanding shares of capital stock of PROVIDENCE have
been duly and validly authorized and validly issued and are fully paid and
non-assessable. As of the date hereof, except as disclosed herein, there are no
authorized or outstanding subscriptions, options, conversion rights, warrants or
other agreements, securities or commitments of any nature whatsoever (whether
oral or written and whether firm or conditional) obligating PROVIDENCE or any of
its subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, to any person any shares of PROVIDENCE Common Stock or any other shares of
the capital stock of PROVIDENCE or any shares of the capital stock of any of its
subsidiaries, or any securities convertible into or exchangeable for any such
shares, or obligating any such person to grant, extend or enter into any such
agreement or commitment. There are no agreements obligating PROVIDENCE
to redeem, repurchase or otherwise acquire the capital stock of PROVIDENCE,
or any other securities issued by it, or to register the sale of the capital
stock of PROVIDENCE under applicable securities laws. There are no agreements
or arrangements prohibiting or otherwise restricting the payment of dividends or
distributions to the PROVIDENCE Shareholders by PROVIDENCE.
3.8 Title to Assets; Encumbrances.
3.8.1 PROVIDENCE and its subsidiaries own their respective assets, whether
real, personal or intangible, free and clear of all Encumbrances, except (i)
liens for current taxes and assessments not yet due or being contested in good
faith by appropriate proceedings, (ii) mechanic's liens arising under the
operation of law or for actions contested in good faith or for which payment
arrangements have been made, (iii) liens granted or incurred by PROVIDENCE or
any of its subsidiaries in the ordinary course of its business or in
connection with the financing of office space, furniture and equipment in the
ordinary course of its business, (iv) easements, covenants, restrictions and
other exceptions to title of record which do not materially and adversely
affect the operations of PROVIDENCE and its subsidiaries, (v) such Encumbrances
as do not secure indebtedness in excess of $10,000, which in the aggregate
(meaning as to PROVIDENCE and all of its subsidiaries) do not secure
indebtedness in excess of $10,000, or (vi) Encumbrances reflected in the SEC
Documents;
3.8.2 Except as set forth in the Form 10-KSB for the period ended December
31, 1999 ("Form 10-K"), there are no parties in possession of any of the assets
of PROVIDENCE or its subsidiaries other than PROVIDENCE or such
subsidiaries, other than personal property held by third parties in the
reasonable and ordinary course of business. Except as set forth in the Form
10-K, PROVIDENCE and each of its subsidiaries enjoy full, free and exclusive
use and quiet enjoyment of their respective assets and all rights pertaining
thereto, and PROVIDENCE and its subsidiaries enjoy peaceful and undisturbed
possession under all leases under which any of them is lessee.
3.9 Subsidiaries.
PROVIDENCE has no subsidiaries.
3.10 Litigation.
Except as set forth in the Form 10-K, there is no suit, action, proceeding or
investigation pending or, to the best knowledge of PROVIDENCE, threatened
against or affecting PROVIDENCE or any of its subsidiaries (or any of its
officers or directors in connection with the business of PROVIDENCE or any of
its subsidiaries), nor is there any outstanding judgment, order, writ,
injunction or decree against PROVIDENCE or any of its subsidiaries, which
suit, action, proceeding or investigation had or could reasonably be expected
to have a material adverse effect on PROVIDENCE and its subsidiaries, taken as
a whole. Except as set forth in the SEC Documents, to the best knowledge of
PROVIDENCE: (i) there are no facts upon which any action, suit or proceeding
could be brought against PROVIDENCE or any of its subsidiaries that would have
a material adverse effect on PROVIDENCE; and (ii) neither PROVIDENCE nor any
of its subsidiaries is subject to any court order, writ, injunction, decree,
settlement agreement or judgment that contains or orders any ongoing
obligations, whether prohibitory or mandatory in nature, on the part of
PROVIDENCE or its subsidiaries.
3.11 Environmental Requirements and Health and Safety Requirements.
There are no claims, complaints or reports made by or against PROVIDENCE
during the past three years pursuant to Environmental Requirements or Health
or Safety Requirements. At present, to the best of PROVIDENCE's knowledge,
none of the operations of PROVIDENCE is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a material violation of or a material liability under any
Environmental Requirement or any Health and Safety Requirement.
3.12 Absence of Undisclosed Liabilities.
PROVIDENCE has no liabilities or obligations, either accrued, absolute,
contingent, or otherwise, required to be but not reflected or reserved against
in the PROVIDENCE Financials in accordance with generally accepted accounting
principles, except those incurred in the ordinary course of business, and
PROVIDENCE knows of no potential liability that would result in material
adverse effect on the value or business of PROVIDENCE.
3.13 Financial Statements.
PROVIDENCE has furnished to UAC true, complete and correct copies of the
financial statements of PROVIDENCE, at and for the fiscal year ended December
31, 1999 (these financial statements being collectively referred to herein as
the "PROVIDENCE Financials"). The PROVIDENCE Financials will be in accordance
with the books and records of PROVIDENCE, comply as to form in all material
respects with applicable accounting requirements, have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the financial position of PROVIDENCE as
at the date thereof. Since December 31, 1999, there has not been, occurred or
arisen (a) any material adverse change in the business or the consolidated
financial condition of PROVIDENCE and its subsidiaries, considered as a whole,
from that shown on the aforementioned balance sheet as of December 31, 1999,
or (b) any event, condition or state of facts of any character which, to the
best of the knowledge of PROVIDENCE, materially and adversely affects, or
threatens to materially and adversely affect, the business or results of
operations or financial condition of PROVIDENCE and its subsidiaries,
considered as a whole.
3.14 Contracts.
There are no contracts, agreements, benefit plans, insurance policies,
collective bargaining agreements and commitments of PROVIDENCE, whether or not
made in the ordinary course of business, including leases under which
PROVIDENCE is lessor or lessee, which are to be performed in whole or in part
after the Effective Time, other than an agreement with Xxxxxx and Xxxxxxx,
P.C. referred to in Section 6.9 of this Agreement.
3.15 Taxes and Returns.
3.15.1 PROVIDENCE has (i) filed all tax returns and reports required to be
filed by it and (ii) paid all taxes, assessments and governmental charges and
penalties which it has incurred and which have become due and payable, except
such as are being or may be contested in good faith by appropriate proceedings
or relate to the fiscal year ended December 31, 1999. PROVIDENCE is not
delinquent in the payment of any material tax, assessment or governmental
charge, and no deficiencies for any taxes have been proposed, asserted, or
formally assessed against PROVIDENCE, and no requests for waivers of the time
to assess any such tax are pending, the PROVIDENCE Financials reflect an
adequate accrual, based on the facts and circumstances existing as of the date
hereof, for all material taxes payable by PROVIDENCE (whether or not shown in
any return) through the date thereof. All tax returns and taxes for periods
after December 31, 1998 have or will be filed and paid by PROVIDENCE on a
timely basis, unless said taxes are being contested in good faith by appropriate
proceedings.
3.15.2 For the purposes of this Agreement, the term "tax" (including, with
correlative meaning, the terms "taxes" and "taxable") shall include all
federal, state, local and foreign income, profits, franchise, gross receipt,
payroll, estimated sales, employment, use, property, withholding, excise and
other taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts.
3.16 Compliance with Law.
To the best knowledge of PROVIDENCE, PROVIDENCE is in compliance with and is
not in violation of or in default with respect to, or in alleged violation of
or alleged default with respect to: (a) any applicable law, rule, regulation
or statute applicable to the operations of PROVIDENCE , or (b) any order,
permit, certificate, writ, judgment, injunction, decree, determination, award
or other decision of any court or any Government Entity to which PROVIDENCE is
a party or by which PROVIDENCE is bound, which violation or default or alleged
violation or default would materially and adversely affect the business,
operations, affairs, prospects, properties, assets, profits or condition of
PROVIDENCE . To the best knowledge of PROVIDENCE, PROVIDENCE is not
delinquent with respect to (a) any report required to be filed with any
Governmental Entity or (b) the preparation and delivery of any reports
required by private agreements to which PROVIDENCE is a party, which
delinquency might materially and adversely affect the business, operations,
affairs, prospects, properties, assets, profits, conditions of PROVIDENCE.
3.17 Intellectual Property
PROVIDENCE has no letters of patent, patent applications, inventions upon
which patent applications have not yet been filed, trade names, trademarks,
trademark registrations and applications, copyrights, copyright registrations
and applications, both domestic and foreign, presently owned, possessed, used
or held by PROVIDENCE.
3.18 Brokers' or Finders' Fees
No agent, broker, person or firm acting on behalf of PROVIDENCE or under its
authority is or will be entitled to any commission, broker, finder, or
financial advisory fees from any of the parties hereto in connection with any
of the transactions contemplated herein.
ARTICLE IV
OBLIGATIONS PENDING EFFECTIVE TIME
4.1 Agreements of UAC.
UAC agrees that from the date hereof to and through the Effective Time, UAC
will:
4.1.1 Corporate Approvals.
Use its best efforts for the purpose of authorizing and obtaining the consent
of the UAC Shareholders to this Agreement and the merger contemplated hereby.
4.1.2 Maintenance of Present Business.
Except as contemplated by this Agreement, UAC shall operate its business only
in the usual, regular, and ordinary manner so as to maintain the goodwill it
now enjoys and, to the extent consistent with such operation, use all
reasonable efforts to preserve intact its present business organization, keep
available the services of its present officers and employees, and preserve its
relationship with all material customers, suppliers, jobbers, distributors,
and others having business dealings with it. If UAC proposes to secure a
waiver of this covenant from PROVIDENCE with respect to a particular
transaction, UAC shall be deemed in compliance with this covenant if the
President of PROVIDENCE or his successor does not deliver to UAC his objection
in writing to any action described in such waiver request within 72 hours of
receiving notice of such waiver request from UAC.
4.1.3 Maintenance of Properties.
At its expense, maintain all of its property and assets in customary (for UAC)
repair, order, and condition, reasonable wear and use and damage by fire or
unavoidable casualty excepted.
4.1.4 Maintenance of Books and Records.
Maintain its books of account and records in the usual, regular, and ordinary
manner, in accordance with generally accepted accounting principles applied on
a consistent basis.
4.1.5 Compliance with Law.
Continue to conduct its activities in a manner consistent with its current
understanding of the laws applicable to it, unless and until it receives
written notice from a Governmental Entity that it is not in compliance with a
particular law or laws, at which time UAC will modify its conduct to comply
with such law or laws.
4.1.6 Inspection.
Allow PROVIDENCE, its directors, officers and authorized representatives,
during normal business hours, to inspect its records and to consult with its
officers, employees, attorneys, and agents for the purpose of determining the
accuracy of the representations and warranties made, and the compliance with
covenants contained, in this Agreement. PROVIDENCE agrees that it and its
officers and representatives shall hold all data and information obtained with
respect to the other parties hereto in strict confidence, and further agrees
that it will not use such data or information or disclose the same to others,
except to the extent such date or information either is, or becomes, published
or a matter of public knowledge.
PROVIDENCE and UAC agree that they will not issue any press release or other
disclosure of this Agreement without the prior approval of the other, which
shall not be unreasonably withheld, unless, in the good faith opinion of
counsel, such disclosure is required by law and time does not permit the
obtaining of such consent, or such consent is withheld.
In the event of a breach or threatened breach by PROVIDENCE or its officers or
representatives of the provision of this Section, UAC shall be entitled, in
addition to any other available remedy, to an injunction restraining any
disclosure by PROVIDENCE, or its officers or representatives of any of such
confidential information.
4.1.7 Prohibition of Certain Contracts.
Not enter into any contracts outside of the ordinary course of business
without the prior written consent of PROVIDENCE, which consent will not be
unreasonably withheld. If UAC proposes to secure a waiver of this covenant
from PROVIDENCE with respect to a particular transaction, UAC shall be deemed
in compliance with this covenant if the President of PROVIDENCE or his
successor does not deliver to UAC his objection in writing to any action
described in such waiver request within 72 hours of receiving notice of such
waiver request from UAC.
4.1.8 Prohibition of Loans.
Not incur any borrowings, except in the usual and ordinary course of business,
without the prior written consent of PROVIDENCE, which consent will not be
unreasonably withheld.
4.1.9 Prohibition of Certain Commitments.
Not enter into a commitment for expenditures or incur any liability exceeding
$25,000, in the aggregate, except (i) as may be necessary or desirable for the
maintenance of existing facilities, machinery and equipment in the ordinary
course of business or in connection with measures taken to effect the Merger,
as described herein, (ii) as in otherwise consented to in writing by
PROVIDENCE, or (iii) as may otherwise be in the ordinary course of business.
4.1.10 Disposal of Assets.
The company shall not sell, dispose of, or encumber, any property or assets,
except (i) in the usual and ordinary course of business; or (ii) as is
otherwise consented to in writing by PROVIDENCE or authorized hereunder.
4.1.11 Maintenance of Insurance.
Keep in full force and effect present insurance policies or other comparable
coverage on all its properties.
4.1.12 No Amendment to Articles of Incorporation.
Not amend its certificate of incorporation or merge or consolidate with or
into any other corporation or change in any manner the rights of its capital
stock or the character of its business.
4.1.13 No Issuance, Sale, or Purchase of Securities.
Except as contemplated by this Agreement or subject to an agreement described
herein or in the Disclosure Schedule, not issue or sell, or issue options or
rights to subscribe to, or enter into any contract or commitment to issue or
sell (upon conversion or otherwise), any shares of its capital stock, or
subdivide or in any way reclassify any shares of its capital stock, or
acquire, or agree to acquire, any shares of its capital stock.
4.1.14 Prohibition of Dividends.
Not declare or pay any dividend on shares of its capital stock or make any
other distribution of assets to the holders thereof.
4.1.15 Notice of Material Developments.
Promptly notify PROVIDENCE in writing of any material adverse change in, or
any changes which in the aggregate would likely result in a material adverse
change in, the business, properties, condition (financial or otherwise) or
results of operations of UAC, whether or not occurring in the usual and
ordinary course of its business, but only to the extent UAC has actual
knowledge of any such changes.
4.2 Agreements of PROVIDENCE.
PROVIDENCE agrees that from the date hereof to the Effective Time, it will:
4.2.1 Corporate Approvals.
Call and hold a meeting of its shareholders to approve the Transaction
contemplated herein, and its board of directors for the purpose of authorizing
and obtaining the consent of PROVIDENCE as sole stockholder of to this
Agreement and the merger contemplated hereby.
4.2.2 Maintenance of Present Business.
Except as contemplated by this Agreement, operate no business.
4.2.3 Maintenance of Books and Records.
Maintain the books of account and records of PROVIDENCE and each of its
subsidiaries in the usual, regular, and ordinary manner, in accordance with
generally accepted accounting principles applied on a consistent basis.
4.2.4 Compliance with Law.
Continue, and cause its subsidiaries to continue, to conduct its and their
activities in a manner consistent with PROVIDENCE's current understanding of
the laws applicable to said entities, unless and until PROVIDENCE receives
written notice from a Government Entity that said entities are not in
compliance with a particular law or laws, at which time PROVIDENCE will cause
said entity or entities to comply with such law or laws.
4.2.5 Inspection.
Allow UAC and its directors officers and authorized representatives, during
normal business hours, to inspect its and each of its subsidiaries' records
and to consult with its and each of its subsidiaries' officers, employees,
attorneys, and agents for the purpose of determining the accuracy of the
representations and warranties made, and the compliance with covenants
contained, in this Agreement. UAC agrees that it and its officers and
representatives shall hold all data and information obtained with respect to
the other parties hereto in strict confidence, and each further agrees that it
will not use such data or information or disclose the same to others, except
to the extent such data or information either is, or becomes, published or a
matter of public knowledge. In the event of a breach or threatened breach by
UAC or its officers or representatives of the provisions of this Section,
PROVIDENCE shall be entitled, in addition to any other available remedy, to an
injunction restraining any disclosure by UAC or its officers or
representatives of any of such confidential information.
4.2.6 Prohibition of Contracts.
Except as contemplated by this Agreement, PROVIDENCE shall not enter into any
contract.
4.2.7 Prohibition of Indebtedness.
PROVIDENCE shall not incur any indebtedness of any kind or nature.
4.2.8 Disposal of Assets.
PROVIDENCE shall not dispose of any assets.
4.2.9 Maintenance of Insurance.
Keep in full force and effect present insurance policies or other comparable
coverage on all of the assets of PROVIDENCE and all of its subsidiaries.
4.2.10 No Amendments to Articles of Incorporation.
Not amend its Articles of Incorporation, or merge into any other corporation.
4.2.11 Notice of Material Developments.
Promptly notify UAC in writing of any material adverse change in, or any
changes which in the aggregate would likely result in a material adverse
change in, the business, properties, condition (financial or otherwise),
results of operations or prospects of PROVIDENCE or any of its subsidiaries,
whether or not occurring in the usual and ordinary course of business, but
only to the extent PROVIDENCE or any of such subsidiaries has actual knowledge
of any such changes.
4.2.12 Performance of Contracts.
Perform or cause to be performed all material obligations of PROVIDENCE or any
of its subsidiaries under agreements relating to or affecting their respective
assets, properties or rights.
ARTICLE V
ADDITIONAL COVENANTS OF THE PARTIES
5.1 Filings and Consents.
As promptly as practicable after the execution of this Agreement, each party
to this Agreement (a) shall make all filings (if any) and give all notices (if
any) required to be made and given by such party in connection with the UAC
Merger and (b) shall use all commercially reasonable efforts to obtain all
Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
UAC Merger and the other transactions contemplated by this Agreement, other
than those Consents identified on Section 2.25 of the Disclosure Schedule.
PROVIDENCE shall (upon request) promptly deliver to UAC a copy of each such
filing made, each such notice given and each such Consent obtained by UAC
during the period prior to Closing.
5.2 Public Announcements.
After the date hereof, each party shall not (and each party shall not permit
any of its Representatives to) issue any press release or make any public
statement regarding this Agreement or the Merger, or regarding any of the
other transactions contemplated by this Agreement, without the other party's
prior written consent.
5.3 Best Efforts.
During the period prior to Closing, PROVIDENCE, and UAC shall use their best
efforts to cause the conditions set forth in Article 6 to be satisfied on a
timely basis.
5.4 Employment and Consulting Agreements.
Omitted.
5.5 FIRPTA Matters.
Omitted.
5.6 Investment Representation Letter.
At the Closing, each of the UAC Shareholders shall execute and deliver to UAC
an investment representation letter in the form attached hereto at Exhibit D
(an "Investment Representation Letter").
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF
PROVIDENCE AND UAC
The obligations of PROVIDENCE, and UAC to effect the UAC Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:
6.1 Accuracy of Representations.
Each of the representations and warranties made by PROVIDENCE and UAC in this
Agreement and in each of the Transaction Documents and instruments delivered
to PROVIDENCE, and UAC in connection with the transactions contemplated by
this Agreement shall have been accurate in all material respects as of the
date of this Agreement (without giving effect to any Material Adverse Effect
or other materiality qualifications, or any similar qualifications, contained
or incorporated directly or indirectly in such representations and
warranties), and shall be accurate in all material respects as of the Closing
Date as if made at the Closing Date (without giving effect to any update to
the Disclosure Schedule, and without giving effect to any Material Adverse
Effect or other materiality qualifications, or any similar qualifications,
contained or incorporated directly or indirectly in such representations and
warranties).
6.2 Performance of Covenants.
All of the covenants and obligations that PROVIDENCE and UAC are required to
comply with or to perform at or prior to the Closing shall have been complied
with and performed in all respects.
6.3 Consents.
All Consents required to be obtained in connection with the UAC Merger and the
other transactions contemplated by this Agreement shall have been obtained and
shall be in full force and effect.
6.4 Agreements and Documents.
PROVIDENCE and UAC shall have received the following agreements and documents
(herein referred to as "Transaction Documents"), each of which will be in full
force and effect as of the Effective Time:
(i) Articles of Merger
(ii) A Disclosure Schedule executed by UAC;
(iii) Investment Representation Letters executed by each of the UAC
Shareholders;
(iv) Legal Opinions of Xxxxxx & Xxxxxxx, P.C. and Xxxxxxx Xxxxx Xxxxxx &
Durham, P.A. dated as of the Closing Date, outstanding in the forms
attached hereto at Exhibit E;
(v) A certificate executed by both parties and containing the
representation and warranty of each party that each of the
representations and warranties set forth in Section 2 and 3 is
accurate in all respects as of the Closing Date as if made on
the Closing Date and that the conditions set forth in Section 6
have been duly satisfied (the "Closing Certificate");
(vi) Written resignations of all officers and directors of PROVIDENCE,
effective as of the Effective Time;
(vii) Agreement with Xxxxxxx Xxxx & Company, LLC to provide investment
banking services for one year after the Effective Time; and
(viii) Agreement with Continental Capital to provide public relations and
investor relations services for one year after the Effective Time.
6.5 Omitted
6.6 No Restraints.
No temporary restraining order, preliminary or permanent injunction or other
order preventing the consummation of the UAC Merger shall have been issued by
any court of competent jurisdiction and remain in effect, and there shall not
be any Legal Requirement enacted or deemed applicable to the UAC Merger that
makes consummation of the UAC Merger illegal.
6.7 No Legal Proceedings.
No Person shall have commenced or threatened to commence any Legal Proceeding
challenging or seeking the recovery of a material amount of damages in
connection with the UAC Merger or seeking to prohibit or limit the exercise by
PROVIDENCE of any material right pertaining to its ownership of the assets of
UAC.
6.8 Employees.
No more than one of the individuals identified on Exhibit F shall have ceased
to be employed by, or expressed an intention to terminate their employment
with, UAC.
6.9 Legal Services
Xxxxxx & Xxxxxxx, P.C. shall provide legal services, without additional
consideration, with respect to the SEC filings listed below, and any
amendments thereto, by the Surviving Corporation after the Effective Time:
(i) Form 8-K regarding the Merger;
(ii) Initial Form 13-Ds for all persons reporting under Section 13 of the
Exchange Act;
(iii) Initial Form 3's for all persons reporting under Section 16 of the
Exchange Act;
(iv) Form 10-Q for first quarter following the Effective Time; and
(v) Form SB-2, or similar registration statement, filed for establishing
trading in the common stock of the Surviving Corporation.
6.10 Balance Sheet
The balance sheet of PROVIDENCE shall show no liabilities.
ARTICLE VII
TERMINATION
7.1 Termination Events.
This Agreement may be terminated prior to the Closing:
(a) by PROVIDENCE if PROVIDENCE reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of PROVIDENCE to comply
with or perform any covenant or obligation of PROVIDENCE set forth in this
Agreement);
(b) by UAC if UAC reasonably determines that the timely satisfaction of
any condition set forth in Section 6 has become impossible (other than as a
result of any failure on the part of UAC to comply with or perform any
covenant or obligation set forth in this Agreement or in any other agreement
or instrument delivered to PROVIDENCE);
(c) by PROVIDENCE at or after the Scheduled Closing Time if any condition
set forth in Section 6 has not been satisfied by the Scheduled Closing Time;
(d) by UAC at or after the Scheduled Closing Time if any condition set
forth in Section 6 has not been satisfied by the Scheduled Closing Time;
(e) by PROVIDENCE if the Closing has not taken place on or before August
31, 2000 (other than as a result of any failure on the part of PROVIDENCE to
comply with or perform any covenant or obligation of PROVIDENCE set forth in
this Agreement);
(f) by UAC if the Closing has not taken place on or before August 31, 2000
(other than as a result of the failure on the part of UAC to comply with or
perform any covenant or obligation set forth in this Agreement or in any other
agreement or instrument delivered to PROVIDENCE); or
(g) by the mutual consent of PROVIDENCE and UAC.
7.2 Termination Procedures.
If PROVIDENCE wishes to terminate this Agreement pursuant to Section 7:1(a),
Section 7:1(c) or Section 7:1(e), PROVIDENCE shall deliver to UAC a written
notice stating that PROVIDENCE is terminating this Agreement and setting forth
a brief description of the basis on which PROVIDENCE is terminating this
Agreement. If UAC wishes to terminate this Agreement pursuant to Section
7:1(b), Section 7:1(d) or Section 7:1(f), UAC shall deliver to PROVIDENCE a
written notice stating that UAC is terminating this Agreement and setting
forth a brief description of the basis on which UAC is terminating this
Agreement.
7.3 Effect of Termination.
If this Agreement is terminated pursuant to Section 7:1, all further
obligations of the parties under this Agreement shall terminate; provided,
however, that: (a) neither UAC nor PROVIDENCE shall be relieved of any
obligation or liability arising from any prior breach by such party of any
provision of this Agreement; (b) the parties shall, in all events, remain
bound by and continue to be subject to the provisions set forth in Section 9;
and (c) PROVIDENCE and UAC shall, in all events, remain bound by and continue
to be subject to Section 5:2.
ARTICLE VIII
INDEMNIFICATION
8.1 Survival of Representations, Etc.
(a) The representations and warranties made by PROVIDENCE, and UAC
(including the representations and warranties set forth in Sections 2 and 3,
shall survive the Effective Time for a period of one (1) year, provided,
however, that if, at any time prior to the first anniversary of the Closing
Date, any Indemnitee (acting in good faith) delivers to either party a written
notice alleging the existence of an inaccuracy in or a breach of any of the
representations and warranties made by either party (and setting forth in
reasonable detail the basis for such Indemnitee's belief that such an
inaccuracy or breach may exist) and asserting a claim for recovery under
Section 8.2 based on such alleged inaccuracy or breach, then the claim
asserted in such notice shall survive the first anniversary of the Closing
until such time as such claim is fully and finally resolved. Notwithstanding
the foregoing, the representations and warranties set forth in Section 2.14
shall survive until the expiration of the applicable statutes of limitations,
including extensions thereof.
(b) The representations, warranties, covenants and obligations of
PROVIDENCE, and UAC, and the rights and remedies that may be exercised by
either party, shall not be limited or otherwise affected by or as a result of
any information furnished to, or any investigation made by or knowledge of
either party or any of their Representatives.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made
by PROVIDENCE, or UAC in this Agreement.
8.2 Cross Indemnification.
From and after the Effective Time (but subject to Section 8.1(a)), PROVIDENCE
and the and UAC shall hold harmless and indemnify each other from and against,
and shall compensate and reimburse the other party for, any Damages which are
directly or indirectly suffered or incurred by either party or to which either
party may otherwise become subject (regardless of whether or not such Damages
relate to any third-party claim) and which arise from or as a result of, or
are directly or indirectly connected with: (i) any inaccuracy in or breach of
any representation or warranty set forth in Sections 2 or 3 (without giving
effect to any Material Adverse Effect or other materiality qualification or
any similar qualification contained or incorporated directly or indirectly in
such representation or warranty, but giving effect to any update to the
Disclosure Schedule delivered by PROVIDENCE and UAC prior to the Closing);
(ii) any breach of any covenant or obligation of PROVIDENCE, or UAC (including
the covenants set forth in Sections 4 and 5); or (iii) any Legal Proceeding
relating to any inaccuracy or breach of the type referred to in clause "(i)"
or "(ii)" above (including any Legal Proceeding commenced by any Indemnitee
for the purpose of enforcing any of its rights under this Section 8).
8.3 Threshold; Ceiling.
PROVIDENCE, or UAC shall not be required to make any indemnification payment
pursuant to Section 8.2(a) for any inaccuracy in or breach of any of their
representations and warranties set forth in Sections 2 and 3 until such time
as the total amount of all Damages (including the Damages arising from such
inaccuracy or breach and all other Damages arising from any other inaccuracies
in or breaches of any representations or warranties) that have been directly
or indirectly suffered or incurred by the other party, exceeds $100,000 in the
aggregate. (If the total amount of such Damages exceeds $100,000, then the
Indemnitee shall be entitled to be indemnified against and compensated and
reimbursed for all of such Damages, including claims for Damages included in
the initial $100,000.
8.4 Satisfaction of Indemnification Claim.
In the event either party had any liability (for indemnification or otherwise)
to the other party under this Section 8, the indemnifying party shall satisfy
such liability first, by delivering to such Indemnitee the number of shares of
PROVIDENCE determined by dividing (a) the aggregate dollar amount of such
liability by (b) the average closing price of PROVIDENCE as reported for the
ten trading days preceding the date such liability is satisfied, and second,
to the extent shares of PROVIDENCE are not available to satisfy in full such
liability, then such difference in cash.
8.5 No Contribution.
PROVIDENCE, and UAC waive, acknowledge and agree that they shall not have and
shall not exercise or assert (or attempt to exercise or assert), any right of
contribution, right of indemnity or other right or remedy against each other
in connection with any third party indemnification obligation or any other
liability to which either party may become subject under or in connection with
this Agreement.
8.6 Interest.
Any party who is required to hold harmless, indemnify, compensate or reimburse
any Indemnitee pursuant to this Section 8 with respect to any Damages shall
also be liable to such Indemnitee for interest on the amount of such Damages
(for the period commencing as of the date on which indemnifying party first
received notice of a claim for recovery by such Indemnitee and ending on the
date on which the liability of such indemnifying party to such Indemnitee is
fully satisfied by such indemnifying party) at a floating rate equal to the
rate of interest publicly announced by Bank of America, N.T. & S.A. from time
to time as its prime, base or reference rate.
8.7 Defense of Third Party Claims.
In the event of the assertion or commencement by any Person of any claim or
Legal Proceeding (whether against PROVIDENCE, or UAC) with respect to which
either party may become obligated to hold harmless, indemnify, compensate or
reimburse any third party Indemnitee pursuant to this Section 8, such party
shall have the right, at its election, to proceed with the defense of such
claim or Legal Proceeding on its own.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Further Assurances.
Each party hereto shall execute and cause to be delivered to each other party
hereto such instruments and other documents, and shall take such other
actions, as such other party may reasonably request (prior to, at or after the
Closing) for the purpose of carrying out or evidencing any of the transactions
contemplated by this Agreement.
9.2 Fees and Expenses.
If the UAC Merger is not consummated for any reason whatsoever, each party to
this Agreement shall bear and pay all fees, costs and expenses (including
legal fees and accounting fees) ("Fees and Expenses") that have been incurred
or that are incurred by such party in connection with the transactions
contemplated by this Agreement. If the UAC Merger is consummated, UAC shall
pay all Fees and Expenses of PROVIDENCE.
9.3 Attorneys' Fees.
If any action or proceeding relating to this Agreement or the enforcement of
any provision of this Agreement is brought against any party hereto, the
prevailing party shall be entitled to recover reasonable attorneys' fees,
costs and disbursements (in addition to any other relief to which the
prevailing party may be entitled).
9.4 Notices.
All notices and other communications required or permitted under this
Agreement and the transactions contemplated hereby shall be in writing and
shall be deemed to have been duly given, made and received on the date when
delivered by hand delivery with receipt acknowledged, or upon the next
Business Day following receipt of facsimile transmission, or upon the fifth
day after deposit in the United States mail, registered or certified with
postage prepaid, return receipt requested, addressed as set forth below:
(a) If to PROVIDENCE:
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
with a copy (not constituting notice) to:
Xxxxxx & Xxxxxxx, P.C.
0000 Xxxxx Xxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
(b) If to UAC:
c/o CrossStone Capital
0000 Xxxx Xxxx Xxxxx, Xxx. 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Telephone:
Facsimile:
with a copy (not constituting notice) to:
Attention:
Telephone:
Facsimile:
9.5 Confidentiality.
Without limiting the generality of anything contained in Section 5.2, on and
at all times after the Closing Date, each party shall keep confidential, and
shall not use or disclose to any other Person, any non-public document or
other non-public information in such party's possession that relates to the
business of UAC or PROVIDENCE.
9.6 Time of the Essence.
Time is of the essence of this Agreement.
9.7 Headings.
The bolded headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of
this Agreement.
9.8 Counterparts.
This Agreement may be executed in several counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one agreement.
9.9 Governing Law.
This Agreement shall be construed in accordance with, and governed in all
respects by, the internal laws of the State of Colorado and (without giving
effect to principles of conflicts of laws).
9.10 Successors and Assigns.
The rights and obligations of PROVIDENCE, or UAC may not be assigned without
the prior written consent of both parties. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, personal representatives,
successors and assigns.
9.11 Remedies Cumulative; Specific Performance.
The rights and remedies of the parties hereto shall be cumulative (and not
alternative). The parties to this Agreement agree that, in the event of any
breach or threatened breach by any party to this Agreement of any covenant,
obligation or other provision set forth in this Agreement for the benefit of
any other party to this Agreement, such other party shall be entitled (in
addition to any other remedy that may be available to it) to (a) a decree or
order of specific performance or mandamus to enforce the observance and
performance of such covenant, obligation or other provision, and (b) an
injunction restraining such breach or threatened breach.
9.12 Waiver.
(a) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
9.13 Amendments.
This Agreement may not be amended, modified, altered or supplemented other
than by means of a written instrument duly executed and delivered on behalf of
all of the parties hereto.
9.14 Severability.
In the event that any provision of this Agreement, or the application of any
such provision to any Person or set of circumstances, shall be determined to
be invalid, unlawful, void or unenforceable to any extent, the remainder of
this Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to be invalid,
unlawful, void or unenforceable, shall not be impaired or otherwise affected
and shall continue to be valid and enforceable to the fullest extent permitted
by law.
9.15 Entire Agreement.
This Agreement and the other agreements referred to herein set forth the
entire understanding of the parties hereto relating to the subject matter
hereof and thereof and supersede all prior agreements and understandings among
or between any of the parties relating to the subject matter hereof and thereof.
9.16 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender
shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections" and "Appendix" are intended to refer to Sections of this Agreement
and Appendices to this Agreement.
IN WITNESS WHEREOF, PROVIDENCE and UAC have signed this Agreement as of the
date first written above.
PROVIDENCE CAPITAL I, INC.
a Colorado Corporation
By: /s/ Xxxxxxx Xxxxxx, Jr.
XXXXXXX XXXXXX, JR., PRESIDENT
United American Companies, Inc.
a North Carolina Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
XXXXXX X. XXXXXXXX, CHIEF EXECUTIVE OFFICER
Xxxxxx & Xxxxxxx, P.C. enters into this Agreement
for purposes of evidencing its consent to and
agreement with Section 6.9.
Date: August 15, 2000
XXXXXX & XXXXXXX, P.C.
By: /s/ Xxxxxxx Xxxxxx, Jr.
XXXXXXX XXXXXX, JR., PRESIDENT
Exhibit A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
"Acquisition Transaction" means any transaction involving:
(a) the sale, license, disposition or acquisition of all or a
material portion of PROVIDENCE or UAC's business or assets;
(b) the issuance, disposition or acquisition of (i) any capital
stock or other equity security of PROVIDENCE or UAC, (ii) any option, call,
warrant or right (whether or not immediately exercisable) to acquire any capital
stock or other equity security of PROVIDENCE or UAC, or (iii) any security,
instrument or obligation that is or may become convertible into or
exchangeable for any capital stock or other equity security of PROVIDENCE
or UAC; or
(c) any merger, consolidation, business combination, reorganization or
similar transaction involving PROVIDENCE or UAC.
"Affiliate" means, with respect to any specified Person, any other Person
in which the specified Person has a direct or indirect interest (except
through ownership of less than 5% of the outstanding shares of any entity whose
securities are listed on a national securities exchange or traded in the
national over-the-counter market).
"Agreement" shall have the meaning specified in the preamble to the
Agreement.
"PROVIDENCE" shall have the meaning specified in the preamble to the
Agreement.
"PROVIDENCE Common Stock" shall have the meaning specified in Section
1:7:2(i) of the Agreement.
"PROVIDENCE SEC Documents" shall have the meaning specified in Section
3:1:5(a) of the Agreement.
"Balance Sheet" shall have the meaning specified in Section 2:1:7 of the
Agreement.
"Business Day" means a day, other than a Saturday or a Sunday, or a
federal holiday upon which offices of the federal government are not open for
business.
"Closing" and "Closing Date" shall have the meanings specified in Section
1:1:3 of the Agreement.
"Code" shall have the meaning specified in the recitals to the Agreement.
"UAC" shall have the meaning specified in the preamble to the Agreement.
"UAC Common Stock" shall have the meaning specified in the recitals to
the Agreement.
"UAC Contract" means any Contract: (a) to which UAC is a party; (b) by
which UAC or any of its assets is or may become bound or under which UAC has,
or may become subject to, any obligation; or (c) under which UAC has or may
acquire any right or interest.
"UAC Financials" shall have the meaning specified in Section 2:1:7 of the
Agreement.
"UAC Proprietary Asset" means any Proprietary Asset owned by or licensed
to UAC or otherwise used by UAC.
"UAC Returns" shall have the meaning specified in Section 2:1:7 of the
Agreement.
"UAC Stock Certificate" shall have the meaning specified in Section 1:8
of the Agreement.
"Consent" means any approval, consent, ratification, permission, waiver
or authorization (including any Governmental Authorization).
"Contract" means any written, oral or other agreement, contract,
subcontract, lease, understanding, instrument, note, warranty, insurance policy,
benefit plan or legally binding commitment or undertaking of any nature.
"Damages" shall include any loss, damage, injury, decline in value, lost
opportunity, liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
"Disclosure Schedule" means the schedule (dated as of the date of the
Agreement) delivered to PROVIDENCE on behalf of UAC and the Stockholders.
"Effective Time" shall have the meaning specified in Section 1:1:3 of the
Agreement.
"Employment Agreements" shall have the meaning specified in Section
2:1:9:7 of the Agreement.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage,
security interest, encumbrance, claim, infringement, interference,
option, right of first refusal, preemptive right, community property interest or
restriction of any nature (including any restriction on the voting of any
security, any restriction on the transfer of any security or other asset,
any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the
possession, exercise or transfer of any other attribute of ownership of any
asset).
"Entity" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership, joint
venture, estate, trust, UAC (including any limited liability UAC or joint
stock UAC), firm or other enterprise, association, organization or entity.
"Environmental Law" means any federal, state, local or foreign Legal
Requirement relating to pollution or protection of human health or the
environment (including ambient air, surface water, ground water, land
surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern.
"ERISA" shall have the meaning specified in Section 2:1:19 of the Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fees and Expenses" shall have the meaning specified in Section 9:2 of
the Agreement.
"First Anniversary" shall have the meaning specified in Section 8:1 of
the Agreement.
"GAAP" means generally accepted accounting principles.
"Governmental Authorization" means any: (a) permit, license, certificate,
franchise, permission, clearance, registration, qualification or
authorization issued, granted, given or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal Requirement; or (b)
right under any Contract with any Governmental Body.
"Governmental Body" means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, local, municipal, foreign or other government;or (c)
governmental or quasi-governmental authority of any nature (including any
governmental division, department, agency, commission, instrumentality,
official, organization, unit, body or Entity and any court or other tribunal).
"Indemnitees" means the following Persons: (a) PROVIDENCE or UAC; (b)
PROVIDENCE or UAC's current and future affiliates; (c) the respective
Representatives of the Persons referred to in clauses "(a)" and "(b)"
above; and (d) the respective successors and assigns of the Persons referred to
in clauses "(a)", "(b)" and "(c)" above; provided, however, that the
Stockholders shall not be deemed to be "Indemnitees."
"Investment Representation Letter" shall have the meaning specified in
Section 5.6 of the Agreement.
"IRS" means the Internal Revenue Service.
"Legal Proceeding" means any action, suit, litigation, arbitration,
proceeding (including any civil, criminal, administrative, investigative or
appellate proceeding), hearing, inquiry, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any
court or other Governmental Body or any arbitrator or arbitration panel.
"Legal Requirement" means any federal, state, local, municipal, foreign
or other law, statute, constitution, principle of common law, resolution,
ordinance, code, edict, decree, rule, regulation, ruling or requirement
issued, enacted, adopted, promulgated, implemented or otherwise put into
effect by or under the authority of any Governmental Body.
"Material Adverse Effect" means a violation or other matter will be
deemed to have a "Material Adverse Effect" on UAC if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement but
for the presence of "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, in such representations and
warranties) would have a material adverse effect on UAC's business, condition,
assets, liabilities, operations, financial performance or prospects.
"Material Contracts" shall have the meaning specified in Section 2:1:9:9 of the
Agreement.
"Materials of Environmental Concern" means chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products
and any other substance that is now or hereafter regulated by any
Environmental Law or that is otherwise a danger to health, reproduction or the
environment.
"Merger" shall have the meaning specified in the recitals to the Agreement.
"Person" means any individual, Entity or Governmental Body.
"Pre-Closing Period" shall have the meaning specified in Section 5:1 of
the Agreement.
"Proprietary Asset" means any: (a) patent, patent application, trademark
(whether registered or unregistered), trademark application, trade name,
fictitious business name, service xxxx (whether registered or
unregistered), service xxxx application, copyright (whether registered or
unregistered), copyright application, maskwork, maskwork application, trade
secret, know-how, client list, franchise, system, computer software,
computer program, invention, design, blueprint, engineering drawing, proprietary
product, technology, proprietary right or other intellectual property
right or intangible asset; or (b) right to use or exploit any of the foregoing.
"Registration Statement" shall have the meaning specified in Section
3:1:5 of the Agreement.
"Related Party" means: (i) the Stockholders; (ii) each individual who is,
or who has at any time since October 15, 1997 been, an officer of UAC; (iii)
each member of the immediate family of each of the individuals referred to in
clauses "(i)" and "(ii)" above; and (iv) any trust or other entity (other
than UAC) in which any one of the individuals referred to in clauses "(i)",
"(ii)" and "(iii)" above holds (or in which more than one of such individuals
collectively hold), beneficially or otherwise, a material voting, proprietary or
equity interest).
"Representatives" means officers, directors, employees, agents,
attorneys, accountants, advisors and representatives.
"Scheduled Closing Time" shall have the meaning specified in Section
7:1(c) of the Agreement.
"SEC" means the United States Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" shall have the meaning specified in Section 1:6:1 of the Agreement.
"Stockholders" shall have the meaning specified in the preamble to the
Agreement.
"Tax" means any tax (including any income tax, franchise tax, capital
gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad valorem
tax, transfer tax, stamp tax, sales tax, use tax, property tax, business tax,
withholding tax or payroll tax), levy, assessment, tariff, duty (including any
customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or
collected by or under the authority of any Governmental Body.
"Tax Return" means any return (including any information return), report,
statement, declaration, estimate, schedule, notice, notification, form,
election, certificate or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection or payment of any
Tax or in connection with the administration, implementation or enforcement of
or compliance with any Legal Requirement relating to any Tax.
AGREEMENT AND PLAN OF MERGER
AND REORGANIZATION
among:
PROVIDENCE CAPITAL I, INC.,
a Colorado corporation;
UNITED AMERICAN COMPANIES, Inc.,
a North Carolina corporation;
___________________________
Dated as of August 15, 2000
___________________________
EXHIBITS
Exhibit Document
I. Articles of Merger
II. a Disclosure Schedule to be executed by PROVIDENCE and UAC; at
Closing
III. Investment Representation Letters to be executed by each of the UAC
Shareholders; at closing
IV. Legal Opinions of Xxxxxx & Xxxxxxx, P.C. and
_____________________
dated as of the Closing Date, substantially in the forms attached
hereto at Exhibit I
V. Certificate of Board of Directors UAC.
VI. Certificate of Board of Directors PROVIDENCE.
Table of Contents
SECTION 1. Description of Transaction 1
1.1 Merger of UAC into PROVIDENCE 1
1.2 Effect of the Merger 1
1.3 Closing; Effective Time 1
1.4 Conversion of Shares 2
1.5 Piggy Back Registration Rights 4
1.6 Closing of UAC's Transfer Books 5
1.7 Exchange of Certificates 6
1.8 Stockholder Approval; Dissenting Shares 7
1.10 Tax Consequences 7
1.11 Accounting Treatment 7
1.12 Further Action 7
SECTION 2. Representations and Warranties of UAC 7
2.1 Due Organization; Good Standing; No Subsidiaries 7
2.2 Certificate of Incorporation and Bylaws; Records 8
2.3 Capitalization; Title to Shares 8
2.4 Financial Statements 8
2.5 Absence of Changes 9
2.6 Title to Assets 10
2.7 Bank Accounts; Receivables 11
2.8 Equipment; Leasehold 11
2.9 Proprietary Assets 11
2.10 Contracts 13
2.11 Liabilities 15
2.12 Compliance with Legal Requirements 15
2.13 Governmental Authorizations 15
2.14 Tax Matters 15
2.15 Employee and Labor Matters; Benefit Plans 16
2.16 Environmental Matters 18
2.17 Insurance
2.18 Related Party Transactions 19
2.19 Legal Proceedings; Orders 19
2.20 Clients
2.21 Material Relationships 20
2.22 Sales Policies; Warranties 20
2.23 Brokers and Finders 20
2.24 Authority; Binding Nature of Agreement 20
2.25 Non-Contravention; Consents 20
2.26 Database Backup 21
2.27 Full Disclosure 21
SECTION 3. Representations and Warranties of PROVIDENCE 21
3.1 SEC Filings; Financial Statements 21
3.2 Authority; Binding Nature of Agreement 22
3.3 Valid Issuance 22
SECTION 4. Certain Covenants of UAC and the Stockholders 22
4.1 Access and Investigation 22
4.2 Operation of UAC's Business 22
4.3 Notification; Updates to Disclosure Schedule 24
4.4 No Negotiation 25
SECTION 5. Additional Covenants of the Parties 25
5.1 Filings and Consents 25
5.2 Public Announcements 25
5.3 Best Efforts 26
5.4 Employment and Noncompetition Agreements 26
5.5 FIRPTA Matters 26
5.6 Release 26
5.7 Investment Representation Letter 26
5.8 Proprietary Information Agreement 26
SECTION 6. Conditions Precedent to Obligations of
PROVIDENCE 27
6.1 Accuracy of Representations 27
6.2 Performance of Covenants 27
6.3 Consents 27
6.4 Agreements and Documents 27
6.5 FIRPTA Compliance 28
6.6 No Restraints 28
6.7 No Legal Proceedings 28
6.8 Employees 28
6.9 Stockholder Approval 28
SECTION 7. Termination 29
7.1 Termination Events 29
7.2 Termination Procedures 30
7.3 Effect of Termination 30
7.4 Termination Fee 30
SECTION 8. Indemnification, Etc. 30
8.1 Survival of Representations, Etc. 30
8.2 Indemnification by Principal Stockholders 31
8.3 Threshold; Ceiling 31
8.4 Satisfaction of Indemnification Claim 32
8.5 No Contribution 32
8.6 Interest 32
8.7 Defense of Third Party Claims 32
8.8 Exercise of Remedies by Indemnitees Other Than
PROVIDENCE 33
SECTION 9. Miscellaneous Provisions 33
9.1 Stockholders' Agent 33
9.2 Further Assurances 33
9.3 Fees and Expenses 33
9.4 Attorneys' Fees 33
9.5 Notices 34
9.6 Confidentiality 35
9.7 Time of the Essence 35
9.8 Headings 35
9.9 Counterparts 35
9.10 Governing Law 35
9.11 Successors and Assigns 35
9.12 Remedies Cumulative; Specific Performance 35
9.13 Waiver 36
9.14 Amendments 36
9.15 Severability 36
9.16 Entire Agreement 36
9.17 Construction 36
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
APPENDIX I
ARTICLES OF MERGER
(To be completed prior to the Closing Date)
APPENDIX II
DISCLOSURE SCHEDULE
APPENDIX III
UAC INVESTMENT REPRESENTATION LETTER
(To be distributed to UAC Shareholders prior to the Closing Date)
APPENDIX IV
LEGAL OPINIONS
August 15, 2000
CONFIDENTIAL
The Board of Directors
UNITED AMERICAN COMPANIES, INC.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Re: Plan and Agreement of Merger dated August 15, 2000 between PROVIDENCE
CAPITAL I, INC., and UNITED AMERICAN COMPANIES, INC.
Ladies and Gentlemen:
We render herewith our opinion as to certain matters pursuant to the Plan and
Agreement of Merger dated August 15, 2000 (the "Plan"), made by and among")
PROVIDENCE CAPITAL I, INC. a Colorado corporation ("PROVIDENCE" or the
"Surviving Corporation, and UNITED AMERICAN COMPANIES, INC., a corporation
(the "Disappearing Corporation"), involved in the Section 4(2), 4(6) or
Regulation D private placement of common shares of PROVIDENCE (the "Shares"),
conducted in compliance with the Securities Act of 1933 (the "Act").
In rendering our opinion, we have examined and relied upon the
following:
(a) The Articles of Incorporation of the Surviving Corporation filed with
the State of Colorado;
(b) The materials contained in the Plan, Disclosure Schedules and
Certificates of the Board of Directors (the "Confidential Documents")
concerning the transactions contemplated thereby and the Acquisition by the
Surviving Corporation of all of the issued and outstanding common shares of
the Disappearing Corporation (the "Transaction");
Page 2
The Board of Directors
August 15, 2000
________________________
(c) The Certificate of Good Standing dated August 7, 2000, attached
hereto as Exhibit "A" (the "Company's Certificate").
The opinions expressed in subparagraphs three, four, six, seven and nine
below, as to factual matters, are given in reliance upon the Company's
Securities Certificates and the Certificate of the Board of Directors,
attached hereto as an Exhibit, confirming the fully diluted capitalization
of the Surviving Corporation and all of its subsidiaries;
(d) Such other documents and instruments as we have deemed necessary in
order to enable us to render the opinions expressed herein.
For the purposes of rendering this opinion, we have assumed that no person or
entity has engaged in fraud or misrepresentation regarding the inducement
relating to, or the execution or delivery of, the documents reviewed.
Furthermore, we express no opinion as to the validity of any of the
assumptions, form, or content of any financial or statistical data contained
in the Confidential Documents. We do not assume any obligation to advise
officers, directors, their advisors or representatives of the parties to the
Plan, beyond the opinions specifically expressed herein. The terms used in
this opinion shall have the meaning ascribed to them in the Plan and other
documents relied upon in rendering our opinion. As used in paragraphs five
and nine hereof the phrase "of which we have knowledge" means that such
knowledge is based solely upon conversations with representatives of the
Surviving Corporation and a review of our own files.
Based upon the foregoing assumptions, our review of the above documents and
our reliance, as to factual matters, upon the representations in the Company's
Board of Director Certificates, and subject to the qualifications listed
herein, we are of the opinion that:
1. The Surviving Corporation is a duly organized and validly existing
corporation under the laws of the State of Colorado, and upon the filing of
required state documents with the
Page 3
The Board of Directors
August 15, 2000
_________________________
appropriate authorities, is fully authorized to transact the business in
which it is engaged in accordance with the Plan and as described in the
Confidential Documents.
2. The Plan has been duly authorized, executed and delivered and is a
valid and binding agreement of the Surviving Corporation, having adequate
authorization and having taken all action necessary to authorize the
indemnification provisions contained therein; provided, however, that no
opinion is rendered as to the validity or enforceability of such
indemnification provisions insofar as they are or may be held to be
violative of public policy (under either state or federal law) against such
types of provisions in the context of the offer, offer for sale, or sale of
securities.
3. The Surrendered Shares, when transferred, will be validly and legally
issued under the laws of the State of Colorado. The Surrendered Shares, when
transferred, will be fully paid and non-assessable.
4. The Surrendered Shares, when transferred, will conform in all material
respects to all statements concerning them contained in the Confidential
Documents.
5. The consummation of the transactions discussed in the Confidential
Documents by the Surviving Corporation will not result in any breach of
any of the terms of, or constitute a default under, any mortgage, loan
commitment, indenture, deed of trust, agreement or other instrument to which it
is a party and of which we have knowledge, or violate, insofar as it is directed
to the Surviving Corporation, any order of any court or any federal or state
regulatory body or administrative agency having jurisdiction over it or over
its property and of which we have knowledge.
6. To the best of our knowledge after making reasonable inquiry, there is
not in existence, pending or threatened any action, suit or proceeding to
which the Surviving Corporation is a party, except as set forth in the
Confidential Documents, before any court or governmental agency or body, which
might, if decided adversely, materially affect the subject matter of the Plan
or the financial condition, business or prospects of the Surviving Corporation.
Page 4
The Board of Directors
August 15, 2000
_________________________
7. The Surviving Corporation has full power and authority to own its
properties and conduct its business as described in the Confidential Documents,
including, but not limited to, the full power and authority to
transact business as a foreign corporation in the State of
N/A______________________.
8. The disclosures contained in the Confidential Documents, taken together
with UAC's offer to the Surviving Corporation to provide access to additional
information, are sufficient to satisfy the "information requirements" of the
registration exemptions under the Securities Act of 1933, as amended, assuming
the receipt by the Surviving Corporation of a copy of the Confidential
Documents.
9. Based upon the Surviving Corporation's Certificate, we are unaware of
any legal or governmental proceedings required to be described in the
Confidential Documents which are not described therein or any contracts
or documents of any character required to be described in the Confidential
Documents which are not described as required. Nothing herein shall constitute
an opinion as to the laws of any state or jurisdiction other than the laws of
the State of Colorado and federal law regardless of the selected choice of law
stated in any document discussed in this letter.
Our opinion is limited to the specific opinions expressed above. No other
opinions are intended to be inferred therefrom. This opinion is addressed to
and is for the benefit solely of the Board of Directors, and no other person
or persons shall be furnished a copy of this opinion or are entitled to rely
on the contents herein without our express written consent; provided, however,
that counsel to UAC shall be entitled to rely on this opinion. In the event
that any of the facts are different from those which have been furnished to us
and upon which we have relied, the conclusions as set forth above cannot be
relied upon.
Page 5
The Board of Directors
August 15, 2000
_______________________
The opinions contained in this letter are rendered as of the date hereof, and
we undertake no, and hereby disclaim any, obligation to advise you of any
changes in or any new developments which might affect any matters or opinions
set forth herein.
Very truly yours,
Xxxxxx & Xxxxxxx, P.C.
JRS/ac
cc: Xxxxxxx Xxxxxx, Jr.
Xxxx X. Xxxxxxxx
APPENDIX VIII
CERTIFICATE OF BOARD OF DIRECTORS
CAPITALIZATION OF UNITED AMERICAN COMPANIES, INC.
CERTIFICATE
THE BOARD OF DIRECTORS
OF
UNITED AMERICAN COMPANIES, INC.
Pursuant to the provisions of the Statutes and the General Corporation Law, as
amended, the following individuals represent that the following Section of the
Plan and Agreement of Merger Plan and Agreement of Merger dated August 15, 2000
(the "Plan"), made by and among PROVIDENCE CAPITAL I, INC., a Colorado
corporation ("PROVIDENCE"), and United American Companies, INC., a North
Carolina corporation (the "Disappearing Corporation"), is an accurate
representation as of the date of execution of the Plan:
2:1:6 Capitalization of UAC and Subsidiaries.
(a) The authorized capital stock of UAC consists of one hundred million
(100,000,000) shares of UAC common stock, _____ par value per share, of which
________________________________________________ (_________) are issued and
outstanding and fifty million (50,000,000) shares of UAC preferred stock,
_____ par value per share, of which ______________________________________
(_________) are issued and outstanding . The UAC Shares are validly issued,
fully paid and non-assessable and not subject to preemptive rights.
Section
2:1:6 of the Disclosure Schedule sets forth a true, complete and correct list
of the holders of record of the issued and outstanding UAC Shares, and all
claims, commitments or agreements to which UAC is a party or by which it is
bound, obligating UAC to issue, deliver or sell, or to cause to be issued,
delivered or sold, additional shares of capital stock of UAC or obligating UAC
to grant, extend or enter into any such option, warrant, call, right or
agreement with respect to its capital stock. There are no agreements
obligating UAC to redeem, repurchase or otherwise acquire the capital stock of
UAC, or any other securities issued by it, or to register the sale of the
capital stock of UAC under applicable securities laws. There are no agreements
or arrangements prohibiting or otherwise restricting the payment of dividends
or distributions to the UAC Shareholders by UAC.
THE BOARD OF DIRECTORS,
UNITED AMERICAN COMPANIES, INC.
______________________________________
______________________________________
______________________________________
DATED: August 15, 2000.
