AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made this 10th day of
November, 2004 by and among UNIVERSAL CAPITAL MANAGEMENT, INC., a Delaware
corporation ("Universal"), BF ACQUISITION GROUP IV, INC., a Florida corporation
("BF"), XXXXXXX X. XXXXXXX ("Xxxxxxx"), and XXXXX X. XXXX ("Bovi").
BACKGROUND
Universal and BF desire to merge and have entered into this
Agreement to set forth the terms and conditions of the merger. This Agreement
and Plan of Merger has been adopted and approved by the shareholders and
directors of Universal in accordance with the Delaware General Corporation Law
("DGCL"), and the shareholders and directors of BF in accordance with the
Florida Business Corporation Act.
NOW THEREFORE, in consideration of the premises and of the
mutual covenants hereinafter contained, and intending to be legally bound, the
parties each agree as follows:
1. Merger. Upon and subject to all of the terms and conditions
set forth herein, BF shall merge (the "Merger") with and into Universal which
shall survive and continue to do business under the name "Universal Capital
Management Inc." as a Delaware corporation (the "Surviving Corporation").
2. Effective Time. The Merger shall become effective at such
time (the "Effective Time") as (a) a Certificate of Merger is filed with the
Secretary of State of the State of Delaware and (b) the Articles of Merger is
filed with the Department of State of the State of Florida. Such filings shall
be made simultaneously with or as soon as practicable after the closing of the
transactions contemplated by this Agreement.
3. Certificate of Incorporation of Surviving Corporation. The
Certificate of Incorporation of Universal as in effect at the Effective Time
shall constitute, from and after the Effective Time, the Certificate of
Incorporation of the Surviving Corporation until amended in accordance with the
DGCL and the By-laws of the Surviving Corporation.
4. By-laws of Surviving Corporation. The By-laws of Universal
as in effect at the Effective Time shall constitute, from and after the
Effective Time, the By-laws of the Surviving Corporation until amended in
accordance with the DGCL and such By-laws.
5. Directors and Officers of Surviving Corporation. The
directors of Universal immediately prior to the Effective Time shall be the
directors of the Surviving Corporation from and after the Effective Time until
their respective successors have been duly elected and qualified. The officers
of Universal immediately prior to the Effective Time shall, from and after the
Effective Time, be the officers of the Surviving Corporation, each holding the
same respective position in the Surviving Corporation as such person held in
Universal immediately before the Effective Time, until such person's successor
has been duly elected and qualified.
6. Exchange of Stock. As of the Effective Time by virtue of
the Merger and without any further action on the part of the shareholders of BF,
each such shareholder shall be entitled to receive, in exchange for each share
of common stock of BF, One-Half (0.5) share of voting common stock of Universal,
par value one-tenth of a cent ($0.001) per share. Notwithstanding the actual
date of the delivery by any BF shareholder of physical possession of
certificates for shares of capital stock of BF, the exchange and transfer of
legal title and beneficial ownership of such shares shall for all purposes be
deemed to occur as of the Effective Time. Each share of BF, if any, owned by BF
immediately prior to the Effective Time shall be canceled and shall cease to
exist from and after the Effective Time.
7. Representations and Warranties of BF. As a material
inducement to Universal to enter into this Agreement and to close hereunder, BF
hereby makes the following representations and warranties to and with Universal:
(a) Corporate Status; Outstanding Stock. BF is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida and has the power and authority to own its properties and to
carry on its business as it is now being conducted. BF is not required to and
has not qualified to do business as a foreign corporation in any jurisdiction.
BF has an authorized capital consisting of (i) Five Million (5,000,000) shares
of preferred stock none of which is issued or outstanding and (ii) Fifty Million
(50,000,000) shares of common stock, par value one-tenth of a cent ($0.001) per
share, of which nine hundred twenty-five thousand (925,000) shares are issued
and outstanding. All outstanding shares of BF are validly issued, fully paid and
non-assessable. There are no shares of BF's capital stock held in its Treasury.
There are no options, warrants, rights, stockholder agreements or other
instruments or agreements outstanding giving any person the right to acquire any
shares of capital stock of BF nor are there any commitments to issue or execute
any such option, warrants, rights, instruments or agreements. The minute books
and stock records of BF are complete and accurate and all signatures included
therein are the genuine signatures of the persons whose signatures are required.
True, correct and complete copies of BF's Articles of Incorporation and By-Laws,
and all amendments to both, shall have been delivered to Universal before the
Effective Time.
(b) Officers; Directors; Bank Accounts. Schedule "B" is a
correct and complete list of all directors and officers of BF, all bank accounts
and safe deposit boxes of BF and all persons authorized to sign checks drawn on
such accounts and to have access to such safe deposit boxes.
(c) Subsidiaries, Joint Ventures, and Investments. BF has no
subsidiary and does not own any capital stock, security, partnership interest or
other interest of any kind in any corporation, partnership, joint venture,
association or other entity except for the investments made (or jointly made
with Universal) set forth on Schedule "C".
(d) Financial Statements. The Balance Sheets of BF as at
April 30, 2004 (the "Audited Balance Sheet") and July 31, 2004 (the "Warranted
Balance Sheet") and the
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related Statements of Income (Loss) for the year ended as of the date of the
Audited Balance Sheet and for the quarter annual period ended as of the date of
the Warranted Balance Sheet and all related Schedules and Notes to the
foregoing, copies of all of which have been filed by BF with the Securities and
Exchange Commission (the "SEC"), were prepared in accordance with generally
accepted accounting principles and practices consistently applied throughout the
periods reported upon and with past periods, and fairly and accurately present
the financial position of BF as at each such date, and the results of the
operations of BF for the respective periods reported upon.
(e) Real Estate. BF has no interest in any real estate.
(f) Personal Property. BF has good, valid and marketable
title to all personal property, tangible and intangible, reflected on the
Warranted Balance Sheet, and to all other personal property owned by it, free
and clear of all liens, mortgages, pledges, security interests, restrictions,
prior assignments, encumbrances and claims of every kind or character. No claim
has been asserted against BF involving any conflict or claim of conflict of its
corporate name, trade names, trademarks, or internet domain names, with the
tradenames, trademarks, internet domain names, or corporate names of others, and
no officer or director of BF has knowledge of any basis for any such claim of
conflict. BF is the sole and exclusive owner of its corporate name, trade names,
trademarks and internet domain names and has the sole and exclusive right to use
such trade names, trademarks and internet domain names; provided, however, that
Messrs. Xxxxxxx and Xxxx have formed other corporations with names similar to
but slightly different from BF's name. No process used by BF or any product
manufactured or sold by BF infringes upon any patent, patent application,
trademark or trade name of any other party.
(g) Liabilities. BF has no liabilities, except as and to the
extent reflected in the Warranted Balance Sheet or in this Agreement or any
Schedule to this Agreement.
(h) Contracts, Leases, Agreements and Other Commitments. BF
is not a party to or bound by any written, oral or implied contract, agreement,
lease, power of attorney, guaranty, surety arrangement, or other commitment,
including but not limited to any contract or agreement for the purchase or sale
of merchandise or for the rendition of services.
(i) Labor, Employment Contracts, and Employee Benefit
Programs. BF is not a party to any collective bargaining agreement or employment
agreement, and BF is not a party to any pending or threatened labor dispute. BF
has complied with all applicable provisions of the Employee Retirement Income
Security Act or 1974, as amended, ("ERISA") and all applicable Federal, state
and local laws relating to the employment of labor, including but not limited to
the provisions thereof relative to wages, hours, collective bargaining,
contributions to pension or benefit plans, and payment of Social Security and
other payroll taxes, and BF is not liable for any arrears of wages or any taxes
or penalties for failure to comply with any of the foregoing. No "reportable
event" (as that term is defined in Section 4043 of ERISA or regulations
thereunder) has occurred and is continuing with respect to any employee benefit
plan of BF, and the present value of all benefits vested under all of BF's
"employee pension benefit plans" (as that term is defined in Section 3 of ERISA)
do not exceed the value of the assets of
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such plans allocable to such vested benefits. None of such plans nor any trusts
created thereunder have incurred any "accumulated funding deficiency," as such
term is defined in Section 302 of ERISA since the effective date of Section 302.
BF neither has currently nor during the past five (5) years has had written or
oral retirement, pension, profit sharing, stock option, bonus, hospitalization,
vacation or other employee benefit plan, practice, agreement or understanding.
The Company has no employees other than its statutory officers listed on
Schedule "B," and owes no remuneration to any such officer.
(j) Litigation. BF is not a party to or threatened with any
suit, action, arbitration, administrative or other proceeding, or governmental
investigation; there is no judgment, decree, award or order outstanding against
BF; and BF is not contemplating the institution of any suit, action,
arbitration, administrative or other proceeding.
(k) Conflicting Interests. No director, officer or employee
of BF or any relative or any affiliate of any of the foregoing (i) has any
pecuniary interest in any supplier or customer of BF or in any other business
enterprise with which BF conducts business or with which BF is in competition or
(ii) is indebted to BF for money borrowed.
(l) Compliance with Law and Regulations. BF is in compliance
in all material respects with all requirements of law, Federal, state and local,
and all requirements of all governmental bodies or agencies having jurisdiction
over it, the conduct of its business, the use of its properties and assets, and
all premises occupied by it. BF has properly filed all reports and other
documents required to be filed with any Federal, state, local and foreign
government or subdivision or agency thereof. BF has not received any notice, not
heretofore complied with, from any Federal, state or municipal authority or any
insurance or inspection body that any of its properties, facilities, equipment,
or business procedures or practices, fails to comply with any applicable law,
ordinance, regulation, building or zoning law, or requirement of any public
authority or body. BF requires no licenses, permits, orders or approvals issued
by any governmental body or agency to conduct its current business.
(m) Agreement Not in Breach of Other Instruments Affecting
BF; Governmental Consent. The execution and delivery of this Agreement, the
consummation of the transactions provided for herein, and the fulfillment of the
terms hereof (i) will not result in the imposition of any lien, security
interest or encumbrance on any asset of BF or in the breach of any of the terms
and provisions of, or result in a termination or modification of or constitute a
default under, or conflict with, or cause any acceleration of any obligation of
BF under, or permit any other party to modify or terminate, any agreement or
other instrument by which BF is bound, any judgment, decree, order, or award of
any court, governmental body, or arbitrator, or any applicable law, rule or
regulation, and (ii) do not require the consent of any governmental authority.
(n) Filing of Tax Returns. BF has filed all Federal, state,
local and foreign tax returns required to be filed in accordance with provisions
of law pertaining thereto and has paid all taxes and assessments (including,
without limitation of the foregoing, income, withholding, excise, unemployment,
Social Security, occupation, transfer, franchise, property, sales and use taxes,
import duties or charges, and all penalties and interest in respect thereof)
required to have been paid to date.
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(o) Actions Since July 31, 2004. Since July 31, 2004, BF:
(i) has not taken any action outside of the ordinary and
usual course of business other than as expressly authorized hereby;
(ii) has not borrowed any money or become contingently
liable for any obligation or liability of others;
(iii) has paid all of its debts and obligations as they
became due;
(iv) has not incurred any debt, liability or obligation
of any nature to any party except for obligations relating to the purchase of
goods or the rendition of services in the ordinary course of business;
(v) has not knowingly waived any right of substantial
value;
(vi) has used its best efforts to preserve its business
organization intact, to keep available the services of its employees, and to
preserve its relationships with its customers, suppliers and others with whom it
deals;
(vii) has not purchased or redeemed any shares of its
capital stock, or transferred, distributed or paid, directly or indirectly, any
money or other property or assets to any non-shareholder other than payment of
liabilities shown on the Warranted Balance Sheet on or after the scheduled
maturity or due date thereof, and payments in the ordinary course of business
for goods and services in arm's length transactions; and
(viii) has not issued any shares of capital stock except
for the issuance of One Hundred Thousand (100,000) shares of Common Stock to
Nortia Capital Partners, Inc. ("Nortia"), in exchange for cancellation of a
$1,625.00 debt obligation owed by BF to Nortia.
(p) No Material Adverse Change. Since July 31, 2004, there
has not been and there is not threatened any material adverse change in the
financial condition, business, prospects or affairs of BF or any material
physical damage or loss to any of its properties or assets or to the premises
occupied by it (whether or not such damage or loss is covered by insurance).
(q) Ownership of Capital Stock of BF. A true and correct
list of the Shareholders of BF and their respective shareholdings are set forth
on Schedule "Q."
(r) Filings with the SEC. BF has made all filings with the
SEC that it has been required to make since June 1, 2004 under the Securities
Act of 1933 (the "1933 Act") and the Securities Exchange Act of 1934 (the "1934
Act") (collectively the "Public Reports") in accordance and within the time
requirements of the 1933 Act and the 1934 Act and the rules and regulations
promulgated thereunder. Each of the Public Reports has complied with the 1933
Act and the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to such Public Reports in all material respects. None the
Public Reports, as of its applicable date, contained any untrue statement of a
material fact or omitted to state a material fact necessary in
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order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
8. Representations and Warranties of Xxxxxxx and Bovi. As
material inducement to Universal to enter into this Agreement and to close
hereunder, Bovi and Xxxxxxx, severally and not jointly, hereby make the
following representations and warranties to and with Universal:
(a) Agreement Not in Breach of Other Instruments Affecting
Xxxxxxx and Bovi. The execution and delivery of this Agreement, the consummation
of the transactions provided for herein, and the fulfillment of the terms hereof
by Xxxxxxx or Xxxx, will not result in the breach of any of the terms and
provisions of, or constitute a default under, or conflict with, any agreement or
other instrument by which Xxxxxxx or Bovi is bound, any judgment, decree, order,
or award of any court, governmental body, or arbitrator, or any applicable law,
rule or regulation;
(b) Valid and Binding Agreement. This Agreement constitutes
the valid and binding obligation of BF, Xxxxxxx (as to the representation made
by Xxxxxxx) and Bovi (as to the representation made by Bovi), and is enforceable
against each in accordance with its terms; and
(c) Power and Authority. BF has the corporate power, legal
right, and authority to enter into, execute, and deliver this Agreement and to
consummate the transactions contemplated herein.
9. Representations and Warranties of Universal. Universal
represents and warrants to BF, that as of the date hereof:
(a) Corporate Status; Outstanding Stock. Universal is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the power and authority to own its properties
and to carry on its business as it is now being conducted. Universal has an
authorized capital consisting of Twenty Million (20,000,000) shares of common
stock, par value one-tenth of a cent ($0.001) per share, of which Three Million
Eight Hundred Forty-Four Thousand Six Hundred (3,844,600) shares are issued and
outstanding. All outstanding shares of Universal are validly issued, fully paid
and non-assessable. There are no shares of Universal's capital stock held in its
Treasury. There are no options, warrants, rights, stockholder agreements or
other instruments or agreements outstanding giving any person the right to
acquire any shares of capital stock of Universal nor are there any commitments
to issue or execute any such option, warrants, rights, instruments or
agreements; provided, however, Universal is currently offering shares of common
stock for purchase.
(b) Litigation. Universal is not a party to or threatened
with any suit, action, arbitration, administrative or other proceeding, or
governmental investigation; there is no judgment, decree, award or order
outstanding against Universal; and Universal is not contemplating the
institution of any suit, action, arbitration, administrative or other
proceeding.
(c) Conflicting Interests. No director, officer or employee
of Universal or any relative or any affiliate of any of the foregoing (i) has
any pecuniary interest in
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any supplier or customer of Universal or in any other business enterprise with
which Universal conducts business or with which Universal is in competition or
(ii) is indebted to Universal for money borrowed.
(d) Compliance with Law and Regulations. Universal is in
compliance and has at all times complied in all material respects with all
requirements of law, Federal, state and local, and all requirements of all
governmental bodies or agencies having jurisdiction over it, the conduct of its
business, the use of its properties and assets, and all premises occupied by it.
Universal has properly filed all reports and other documents required to be
filed with any Federal, state, local and foreign government or subdivision or
agency thereof. Universal has not received any notice, not heretofore complied
with, from any Federal, state or municipal authority or any insurance or
inspection body that any of its properties, facilities, equipment, or business
procedures or practices, fails to comply with any applicable law, ordinance,
regulation, building or zoning law, or requirement of any public authority or
body. Universal requires no licenses, permits, orders or approvals issued by any
governmental body or agency to conduct its current business.
(e) Agreement Not in Breach of Other Instruments Affecting
Universal; Governmental Consent. The execution and delivery of this Agreement,
the consummation of the transactions provided for herein, and the fulfillment of
the terms hereof (i) will not result in the imposition of any lien, security
interest or encumbrance on any asset of Universal or in the breach of any of the
terms and provisions of, or result in a termination or modification of or
constitute a default under, or conflict with, or cause any acceleration of any
obligation of Universal under, or permit any other party to modify or terminate,
any agreement or other instrument by which Universal is bound, any judgment,
decree, order, or award of any court, governmental body, or arbitrator, or any
applicable law, rule or regulation, and (ii) do not require the consent of any
governmental authority.
(f) Power and Authority. Universal has the corporate power,
legal right and authority to enter into, execute and deliver this Agreement and
to consummate the transactions contemplated herein;
(g) Valid and Binding Agreement. This Agreement is a valid
and legally binding obligation of Universal, enforceable in accordance with its
terms.
10. Indemnification.
(a) BF, Xxxxxxx, and Xxxx (hereinafter sometimes
collectively referred to as the "Indemnitors") jointly and severally shall and
hereby agree to indemnify and to hold harmless Universal and its successors and
assigns, jointly and severally from, against and in respect of the amount of any
and all Deficiencies (as hereinafter defined) in excess of Twenty Thousand
Dollars ($20,000).
(b) As used in this Agreement, "Deficiencies" means any and
all loss or damage resulting from:
(i) any misrepresentation, breach of warranty, or any
non-fulfillment of any warranty, representation, covenant or agreement on any
part of BF, Xxxxxxx or
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Bovi contained in this Agreement or in any other document executed by BF in
connection with the transactions contemplated by this Agreement. (This Agreement
and each such other document is referred to individually as a "Transaction
Document" and collectively, as the "Transaction Documents");
(ii) any error contained in any statement, report or
certificate delivered to Universal by BF in any Transaction Document;
(iii) any claim, debt, liability or obligation or alleged
claim, debt, liability or obligation of BF to any party, incurred prior to the
date hereof or arising from any matter or thing occurring prior to the date
hereof, including but not limited to claims made by governmental authorities for
taxes or otherwise, except for liabilities shown on the Warranted Balance Sheet
(as hereinafter defined) or incurred since the date of the Warranted Balance
Sheet in the ordinary course of business in accordance with Section 7(o) of this
Agreement; and
(iv) any and all acts, suits, proceedings, demands,
assessments, judgments, reasonable attorneys' fees, costs and expenses incident
to any of the foregoing or an investigation of any of the foregoing.
(c) For the avoidance of doubt,
(i) With respect to Bovi, "Deficiencies" shall not
include and Bovi shall not be obligated under this Section 10 with respect to
any claims or liability related to, arising from, or growing out of any event
which occurred subsequent to April 30, 2004 (or any representation, warranty,
covenant or agreement related thereto contained in this Merger Agreement) or the
offer or sale of shares of capital stock of or by Universal subsequent to June
1, 2004; and
(ii) With respect to Xxxxxxx, "Deficiencies" shall not
include and Xxxxxxx shall not be obligated under this Section 10 with respect to
any claims or liability related to, arising from, or growing out of any event
which occurred subsequent to April 30, 2004 (or any representation, warranty,
covenant or agreement related thereto contained in this Merger Agreement) of
which he did not have knowledge or the offer or sale of shares of capital stock
of or by Universal subsequent to June 1, 2004 of which he did not have
knowledge.
(d) In the event that any claim shall be asserted by any
party against, Universal or BF which, if sustained, would result in a
Deficiency, Universal, within a reasonable time after learning of such claim,
shall notify the Indemnitors of such claim, and shall extend to the Indemnitors
a reasonable opportunity to defend against such claim, at the Indemnitors' sole
expense and through legal counsel reasonably acceptable to Universal, provided
that the Indemnitors proceed in good faith, expeditiously and diligently. No
determination shall be made pursuant to subparagraph (d) below while such
defense is still being made until the earlier of (i) the resolution of such
claim by the Indemnitors with the claimant, or (ii) the termination of the
defense by the Indemnitors against such claim or the failure of the Indemnitors
to prosecute such defense in good faith in an expeditious and diligent manner.
Universal shall be entitled to rely on the opinion of their counsel as to the
occurrence of either of such events. Universal shall, at its option and expense,
have the right to participate in any defense undertaken by Indemnitors
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with legal counsel of their own selection. No settlement or compromise of any
claim which may result in a Deficiency may be made by Indemnitors without the
prior written consent of Universal unless (i) prior to such settlement or
compromise Indemnitors acknowledge in writing their obligation to pay in full
the amount of the settlement or compromise any and all associated expenses and
(ii) Universal is furnished with security reasonably satisfactory to Universal
that Indemnitors will in fact pay such amount and expenses.
(e) In the event that Universal asserts the existence of any
Deficiency, Universal shall give written notice to the Indemnitors of the nature
and amount of the Deficiency asserted. If the Indemnitors, within a period of
thirty (30) days after the giving of such notice, shall not have given written
notice to Universal announcing their intent to contest such assertion (such
notice by the Indemnitors being hereinafter called the "contest notice"), such
assertion shall be deemed accepted and the amount of the Deficiency shall be
deemed established. In the event, however, that a contest notice is given to
Universal within such thirty-day period, then the contested assertion of a
Deficiency shall be settled by arbitration to be held in Philadelphia,
Pennsylvania in accordance with the rules of the American Arbitration
Association then obtaining. The determination of the arbitrator(s) shall be
delivered in writing to the Indemnitors and Universal and shall be final,
binding and conclusive upon all of the parties hereto, and the amount of the
Deficiency, if any, determined to exist, shall be deemed established.
(f) Universal and the Indemnitors may agree in writing, at
any time, as to the existence and amount of a Deficiency, and upon execution of
such agreement, such Deficiency shall be deemed established.
(g) The Indemnitors, jointly and severally, hereby agree to
pay the amount of established Deficiencies to Universal within five (5) days
after the establishment thereof in cash. Any amounts not paid by Indemnitors
when due under the preceding sentence shall bear interest from the due date
thereof until the date paid at a rate equal to the lesser of (i) ten percent
(10%) per annum or (ii) the highest legal rate permitted by applicable law.
11. Effect of Merger. At the Effective Time:
(a) BF shall be merged with and into Universal, and
Universal shall be the Surviving Corporation, and the separate existence of BF
shall cease;
(b) All property (real, personal and mixed) of BF, all
franchises of BF, and all debts due on whatever account to BF, shall be
transferred to and vested in the Surviving Corporation without further act or
deed.
(c) All liabilities and obligations of BF shall be vested in
and shall be the liabilities and obligations of the Surviving Corporation. Liens
upon the property of BF shall not be impaired by the Merger and any claim
existing or action or proceeding pending by or against BF may be prosecuted to
judgment as if such Merger had not taken place or the Surviving Corporation may
be substituted in BF's place;
(d) All taxes, penalties, and other governmental accounts
claimed against BF but not settled, assessed or determined prior to the Merger
shall be settled, assessed or
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determined against the Surviving Corporation and shall be a lien against the
franchises and property, both real and personal, of the Surviving Corporation to
the extent required by law.
12. Principal Office. The location of the principal office of
the Surviving Corporation shall be 0000 Xxxxxx Xxxxx, Xxxxx 00, Xxxxxxxxxx,
Xxxxxxxx 00000.
13. Closing. The Closing of the transactions contemplated by
this Agreement shall take place at the offices of Xxxxxxx Xxxxx Xxxxxxx &
Ingersoll, LLP, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, XX at 10:00 a.m. on the later
to occur of November 30, 2004, or on such date when Universal shall have not
fewer than Three Hundred (300) stockholders of record. Either party can
terminate this Agreement if Closing shall not have occurred on or before March
31, 2005.
14. Survival. The representations and warranties made in this
Agreement shall survive until the first anniversary of the Closing date except
that all representations and warranties with respect to taxes, employee benefits
plans and employment matters shall survive until sixty days (60) after the
expiration of the applicable statute of limitations (including any extensions.)
15. Securities Laws Compliance Procedures. BF, Xxxxxxx and
Xxxx severally and not jointly acknowledge and confirm that each has been
advised and understands as follows:
(a) the shares of common stock of the Surviving Corporation
to be issued in the Merger will be "restricted securities" within the meaning of
Rule 144 under the 1933 Act and have not (and will not have) been registered
under the 1933 Act and therefore, must be held indefinitely unless they are
subsequently registered under such statute or an exemption from registration is
available;
(b) The Surviving corporation will be under no obligation to
register such shares under the 1933 Act or to take any action which would make
available an exemption from such registration;
(c) There shall be endorsed on the certificates evidencing
the shares of common stock of the Surviving corporation to be issued in the
Merger a restrictive securities legend. Except under certain limited
circumstances, the above restrictions on the transfer of such shares will also
apply to any and all shares of capital stock or other securities issued or
otherwise acquired with respect to such shares including, without limitation,
shares and securities issued or acquired as a result of any stock dividend,
stock split or exchange or any distribution of shares or securities pursuant to
any corporate reorganization, reclassification or similar event.
16. Covenants. Each party agrees to execute and deliver all
such instruments and documents and to take all such other action as any other
party may reasonably request from time to time, before or after the Effective
Time, without payment of further consideration and without delay, in order to
effectuate the transactions provided for herein. The parties shall cooperate
fully with one another and with their respective counsel in connection with any
steps required to be taken as part of their respective obligations under this
Agreement. BF shall not and hereby agrees not to issue any shares of capital
stock, purchase any shares of portfolio
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companies, enter into any contracts or agreements, or otherwise engage in any
business between the date of this Agreement and the Closing Date.
17. Conditions to Obligations to Close.
(a) Conditions to Obligations of Universal. The obligations
of Universal set forth in this Merger Agreement (including, without limitation,
the obligation to consummate the Merger) are subject to satisfaction of the
following conditions:
(i) This Merger Agreement shall have been adopted and
approved and the Merger shall have been approved by more than 50% of the
stockholders of Universal and by more than 50% of the shareholders of BF;
(ii) The representations and warranties set forth in
Sections 7 and 8 shall be true and correct at and as of the Closing Date;
(iii) BF shall have performed and complied with all of
its covenants hereunder in all respects;
(iv) No action, suit, or proceeding shall be pending or
threatened against BF before any court or quasi-judicial or administrative
agency of any Federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling,
or charge would (A) prevent consummation of any of the transactions contemplated
by this Merger Agreement, or (B) cause of any of the transactions contemplated
by this Merger Agreement to be rescinded following consummation;
(v) BF shall have delivered to Universal a certificate of
BF's Secretary attaching, and certifying that each such attachment is true,
correct, complete and in effect on the Closing Date: (A) resolutions of the
Board of Directors of BF with respect to all transactions contemplated by this
Agreement; (B) resolutions or minutes of meeting of BF shareholders adopting
this Merger Agreement and approving the Merger; and (C) a good standing
certificate for BF issued by the Secretary of State of the State of Florida
dated not more than five days prior to the Closing Date; and
(vi) No State or Federal securities regulator (including
the Securities and Exchange Commission) shall have issued a stop order with
respect to the trading of any shares of BF capital stock or shall have commenced
any inquiry with respect to any filing made by BF with any such regulator or
shall have commenced any investigation with respect to BF.
Universal may waive any condition specified in this Section 17(a) if it executes
a writing so stating at or prior to Closing.
(b) Conditions to Obligations of BF. The obligations of BF
set forth in this Merger Agreement (including without limitation, the
obligations to consummate the Merger) are subject to satisfaction of the
following:
11
(i) This Merger Agreement shall have been adopted and
approved and the Merger shall have been approved by more than 50% of the
stockholders of Universal and by more than 50% of the shareholders of BF;
(ii) The representations and warranties set forth in
Section 9 shall be true and correct at and as of the Closing Date;
(iii) Universal shall have performed and complied with
all of its covenants hereunder in all respects;
(iv) No action, suit, or proceeding shall be pending or
threatened against Universal before any court or quasi-judicial or
administrative agency of any Federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Merger Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation;
(v) Universal shall have delivered to BF a certificate of
Universal's Secretary attaching, and certifying that each such attachment is
true, correct, complete and in effect on the Closing Date: (A) resolutions of
the Board of Directors of Universal with respect to all transactions
contemplated by this Merger Agreement; (B) resolutions or minutes of meeting of
Universal stockholders adopting this Merger Agreement and approving the Merger;
and (C) a good standing certificate for Universal issued by the Secretary of
State of the State of Delaware dated not more than five days prior to the
Closing Date;
BF may waive any condition specified in this Section 17(b) if it executes a
writing so stating at or prior to the Closing.
18. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on
the part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(b) Controlling Law. This Agreement and all questions
relating to its validity, interpretation, performance and enforcement
(including, without limitation, provisions concerning limitations of actions),
shall be governed by and construed in accordance with the laws of the State of
Delaware (other than to the extent, but only to the extent, required to satisfy
the merger requirements of Florida law, Florida law), notwithstanding any
conflict-of-laws doctrines of any jurisdiction to the contrary, and without the
aid of any canon, custom or rule of law requiring construction against the
draftsman.
12
(c) Notices. All notices, requests, demands and other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
delivered (personally, by courier service such FedEx or by other messenger)
against receipt or upon actual receipt of registered or certified mail, postage
prepaid, return receipt requested, addressed as set forth below:
If to Universal:
0000 Xxxxxx Xxxxx
Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
If to Bovi:
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxxx, XX 00000
If to BF or Xxxxxxx:
0000 Xxxx Xxxx.
Xxx Xxxxxxxxx, XX 00000-0000
In addition, notice by mail shall be sent by a reputable international courier
(such as FedEx) if posted outside of the continental United States. Any party
may alter the address to which communications or copies are to be sent by giving
notice of such change of address in conformity with the provisions of this
subparagraph for the giving of notice.
(d) Schedules. All Schedules attached hereto are hereby
incorporated by reference into, and made a part of, this Agreement.
(e) Binding Nature of Agreement; No Assignment. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, personal representatives, successors and assigns,
except that no party may assign or transfer its rights nor delegate its
obligations under this Agreement without the prior written consent of the other
parties hereto.
(f) Execution in Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Agreement shall
become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
(g) Provisions Separable. The provisions of this Agreement
are independent of and separable from each other, and no provision shall be
affected or rendered
13
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(h) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing.
(i) Paragraph Headings. The Paragraph and subparagraph
headings in this Agreement have been inserted for convenience of reference only;
they form no part of this Agreement and shall not affect its interpretation.
(j) Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
(k) Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and Holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or Holiday, then the final day shall be
deemed to be the next day which is not a Saturday, Sunday or Holiday. For
purposes of this Agreement, the term "Holiday" shall mean a day, other than a
Saturday or Sunday, on which national banks with branches in the Commonwealth of
Pennsylvania are or may elect to be closed.
14
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
UNIVERSAL CAPITAL
MANAGEMENT, INC.
Attest: /s/ Xxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- --------------------------------
President
BF ACQUISITION GROUP IV, INC.
Attest: /s/ By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------- --------------------------------
President
Witness:
/s/ Xxxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxx (SEAL)
----------------------------- --------------------------------
Xxxxxxx X. Xxxxxxx
Witness:
/s/ /s/ Xxxxx X. Xxxx (SEAL)
----------------------------- --------------------------------
Xxxxx X. Xxxx
15
AGREEMENT AND PLAN OF MERGER
List of Schedules
Schedule B - List of Officers, Directors, Bank Accounts
Schedule C - List of Investments
Schedule H - List of Corporation Agreements
Schedule Q - List of Shareholders and Shareholdings
Schedule "B"
List of Officers, Directors, Bank Accounts
and Safe Deposit Boxes of BF
Pursuant to Section 7 (b)
-------------------------
Officers
--------
President, Secretary, Treasurer - Xxxxxxx X. Xxxxxxx
Directors
---------
Xxxxxxx X. Xxxxxxx
Bank Accounts
-------------
Wachovia Bank checking account number 2000012136520 and
custodial account number 00000000
Safe Deposit Boxes
------------------
None
Schedule "C"
List of Investments
Pursuant to Section 7(c)
------------------------
Name Number Type Approximate
of of of Percentage of
Company* Shares Owned Shares Class Owned Purchase Price
------------------- -------------- --------------- ---------------- -------------------------------------
GelStat Corporation 150,000 Common Stock 1.7% $250,000
PSI-TEC Corporation 187,500 Common Stock 0.9% $30,000
PSI-TEC Corporation 200,000 Common Stock 1.0% Services rendered
PSI-TEC Corporation 200,000 Common Stock 1.0% Contributed by Founders
ImprintsPlus, Inc. 300,000 Common Stock 3.0% Services rendered
ImprintsPlus, Inc. 200,000 Common Stock 2.0% Contributed by Xxxxxxx Xxxxx and
Xxxxxxx Xxxx
Schedule "H"
List of Corporation Agreements
Pursuant to Section 7(h)
------------------------
None
Schedule "Q"
List of Shareholders and Shareholdings
Pursuant to Section 7(q)
------------------------
--------------------------------------- ---------------------------------------
Name Number of Shares of BF Common Stock
--------------------------------------- ---------------------------------------
Xxxx Xxxxxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxxxxx Xxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxx Xxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxxxxx Xxxxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxxxxx X. Xxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxx Xxxxxxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxx X. & Xxxxxxx Xxxxxx Trust 10,000
--------------------------------------- ---------------------------------------
Xxxxxxx Xxxxx 35,000
--------------------------------------- ---------------------------------------
Xxxxx Xxxxxx 10,000
--------------------------------------- ---------------------------------------
Xxxx Xxxx 10,000
--------------------------------------- ---------------------------------------
Xxxxx X. Xxxx 400,000
--------------------------------------- ---------------------------------------
Xxxxxxx X. Xxxxxxx 300,000
--------------------------------------- ---------------------------------------
Nortia Capital Partners, Inc. 100,000
-------
--------------------------------------- ---------------------------------------
Total 925,000
=======
--------------------------------------- ---------------------------------------
