EXHIBIT 10.2
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT ("Agreement"), dated as of January 9,
2002 is by and among Uniservice Corporation, a Florida corporation (the
"Company") and Associated Automotive Group, Inc., a Nevada corporation ("AAG");
and Xxxxx Xxxxxx, principal shareholder of AAG ("Principal"); and the
shareholders of AAG identified on Schedule 1.1, constituting all of the
shareholders of AAG (hereinafter collectively with Principal referred to as the
"Shareholders").
W I T N E S S E T H:
WHEREAS, the Shareholders own 100% of the issued and outstanding
capital stock of AAG ( the "Equity Interests");
WHEREAS, AAG currently operates an automobile dealership through its
wholly-owned subsidiary, Motorcars of South Florida, Inc.;
WHEREAS, the Company desires to acquire from the Shareholders, and the
Shareholders desire to sell to the Company, all of the Equity Interests in
exchange (the "Exchange") for the issuance by the Company of an aggregate of not
less than 9,333,334 shares (the "Company Shares") of the Company's class A
common stock, par value $.0001 per share (the "Company Common Stock") making AAG
a wholly-owned subsidiary of the Company, on the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of the promises and of the mutual
representations, warranties and agreements set forth herein, the parties hereto
agree as follows:
ARTICLE I
EXCHANGE
1.1 Exchange. Subject to (i) the terms and conditions of this
Agreement, and (ii) any rights of Tricon Restaurants International ("Tricon") to
the extent that this Agreement conflicts with the franchise agreement(s) by and
between Tricon and the Company's subsidiaries, on the Closing Date (as
hereinafter defined):
(a) The Company shall issue and deliver the Company Shares to the
Shareholders allocated in the amounts designated on Schedule 1.1, which Shares
shall constitute approximately 82% of the Company's issued and outstanding
capital stock on a fully diluted basis after giving effect to the Exchange.
(b) As the consideration, the Shareholders shall transfer to the
Company the Equity Interests in AAG.
1.2 Time and Place of Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place at the offices of Atlas
Xxxxxxxx, P.A., 000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000, Xxxx Xxxxxxxxxx, Xxxxxxx
00000 on January 9, 2002 (the "Closing Date") or at such other place as the
Company and AAG may agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to AAG and the Shareholders that as
of the Closing of this Agreement and the closing of the Stock Purchase Agreement
by and between Inversiones Huillimapu S.A. and the Company ("Stock Purchase
Agreement") attached hereto:
2.1 Due Organization and Qualification; Due Authorization.
(a) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of formation,
with full corporate power and authority to own, lease and operate its respective
business and properties and to carry on its respective business in the places
and in the manner as presently conducted or proposed to be conducted. The
Company is in good standing as a foreign corporation in each jurisdiction in
which the properties owned, leased or operated, or the business conducted, by it
requires such qualification except for any such failure, which when taken
together with all other failures, is not likely to have a material adverse
effect on the business of the Company taken as a whole.
(b) The Company does not own, directly or indirectly, any capital
stock, equity or interest in any corporation, firm, partnership, joint venture
or other entity.
(c) The Company has all requisite corporate power and authority to
execute and deliver this Agreement, and to consummate the transactions
contemplated hereby and thereby. The Company has taken all corporate action
necessary for the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby, and this Agreement constitutes the
valid and binding obligation of the Company, enforceable against the Company in
accordance with its respective terms, except as may be affected by bankruptcy,
insolvency, moratoria or other similar laws affecting the enforcement of
creditors' rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
2.2 No Conflicts or Defaults. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby do not and shall not (a) contravene the Articles of Incorporation or
Bylaws of the Company or (b) with or without the giving of notice or the passage
of time (i) violate, conflict with, or result in a breach of, or a default or
loss of rights under, any material covenant, agreement, mortgage, indenture,
lease, instrument, permit or license to which the Company is a party or by which
the Company is bound, or any judgment, order or decree, or any law, rule or
regulation to which the Company is subject, (ii) result in the creation of, or
give any party the right to create, any lien, charge, encumbrance or any other
right or adverse interest ("Liens") upon any of the assets of the Company, (iii)
terminate or give any party the right to terminate, amend, abandon or refuse to
perform, any material agreement, arrangement or commitment to which the Company
is a party or by which the Company's assets are bound, or (iv) accelerate or
2
modify, or give any party the right to accelerate or modify, the time within
which, or the terms under which, the Company is to perform any duties or
obligations or receive any rights or benefits under any material agreement,
arrangement or commitment to which it is a party.
2.3 Capitalization. Except as set forth on Schedule 2.3, the authorized
capital stock of the Company immediately prior to giving effect to the
transactions contemplated hereby consists of 20,000,000 shares of Class A Common
Stock par value $.0001 per share, of which 1,450,000 shares are issued and
outstanding; 2,000,000 shares of Class B Common Stock par value $.0001 per
share, of which 1,400,000 shares are issued and outstanding; and 5,000,000
shares of Preferred Stock, none of which are outstanding. All of the outstanding
shares of capital stock are, and the Company Shares when issued in accordance
with the terms hereof will be, duly authorized, validly issued, fully paid and
non-assessable, and have not been or, with respect to the Company Shares, will
not be, issued in violation of any preemptive right of stockholders. The Company
Shares are not subject to any preemptive or subscription right, any voting trust
agreement or other contract, agreement, arrangement, option, warrant, call,
commitment or other right of any character obligating or entitling the Company
to issue, sell, redeem or repurchase any of its securities, and there is no
outstanding security of any kind convertible into or exchangeable for Common
Stock. The Company has not granted registration rights to any person.
2.4 Financial Statements. Schedule 2.4 contains copies of the
consolidated balance sheet of the Company at December 31, 2000 and the related
statements of operations, stockholders' equity and cash flows for the fiscal
year then ended, including the notes thereto, as audited by Spear, Safer, Xxxxxx
& Co., certified public accountants and the unaudited balance sheet of the
Company at June 30, 2001, and the related consolidated statements of operations,
stockholders' equity and cash flows for the six month period then ended prepared
by the Company's management (collectively, the "Company Financial Statements").
The Company Financial Statements have been prepared in accordance with U.S.
generally accepted accounting principles applied on a basis consistent
throughout all periods presented, subject to, in the case of the interim
statements, audit adjustments, which are not expected to be material. Such
statements present fairly the financial position of the Company as of the dates
and for the periods indicated. The books of account and other financial records
of the Company have been maintained in accordance with good business practices.
2.5 Further Financial Matters. The Company does not have any
liabilities or obligations, whether secured or unsecured, accrued, determined,
absolute or contingent, asserted or unasserted or otherwise, which are required
to be reflected or reserved in a balance sheet or the notes thereto under
generally accepted accounting principles, but which are not reflected in the
Company Financial Statements.
2.6 Taxes. The Company and each subsidiary of the Company has filed all
United States federal, state, county, local and foreign national, provincial and
local returns and reports which were required to be filed on or prior to the
date hereof in respect of all income, withholding, franchise, payroll, excise,
property, sales, use, value added or other taxes or levies, imposts, duties,
license and registration fees, charges, assessments or withholdings of any
nature whatsoever (together, "Taxes"), and has paid all Taxes (and any related
penalties, fines and interest) which have become due pursuant to such returns or
reports or pursuant to any assessment which has become payable, or, to the
extent its liability for any Taxes (and any related penalties, fines and
3
interest) has not been fully discharged, the same have been properly reflected
as a liability on the books and records of the Company or such subsidiary and
adequate reserves therefore have been established. All such returns and reports
filed on or prior to the date hereof have been properly prepared and are true,
correct (and to the extent such returns reflect judgments made by the Company,
as the case may be, such judgments were reasonable under the circumstances) and
complete in all material respects. No tax return or tax return liability of the
Company or such subsidiary has been audited or, presently under audit. The
Company has not given or been requested to give waivers of any statute of
limitations relating to the payment of any Taxes (or any related penalties,
fines and interest). There are no claims pending or, to the knowledge of the
Company, threatened, against the Company or such subsidiary for past due Taxes.
All payments for withholding taxes, unemployment insurance and other amounts
required to be paid for periods prior to the date hereof to any governmental
authority in respect of employment obligations of the Company or such
subsidiary, including, without limitation, amounts payable pursuant to the
Federal Insurance Contributions Act, have been paid or shall be paid prior to
the Closing and have been duly provided for on the books and records of the
Company and in the Company Financial Statements.
2.7 Indebtedness; Contracts; No Defaults.
(a) There are no material instruments, agreements, indentures,
mortgages, guarantees, notes, commitments, accommodations, letters of credit or
other arrangements or understandings, whether written or oral, to which the
Company or any subsidiary of the Company is a party (collectively, the "Company
Agreements").
(b) Neither the Company or any subsidiary of the Company nor, to
the Company's knowledge, any other person or entity is in breach in any material
respect of, or in default in any material respect under, any material contract,
agreement, arrangement, commitment or plan to which the Company or any
subsidiary of the Company is a party, and no event or action has occurred, is
pending or is threatened, which, after the giving of notice, passage of time or
otherwise, would constitute or result in such a material breach or material
default by the Company or any subsidiary of the Company or, to the knowledge of
the Company, any other person or entity. Neither the Company nor any subsidiary
of the Company has received any notice of default under any contract, agreement,
arrangement, commitment or plan to which it is a party, which default has not
been cured to the satisfaction of, or duly waived by, the party claiming such
default on or before the date hereof.
2.8 Personal Property. The Company has good and marketable title to all
of its tangible personal property and assets, including, without limitation, all
of the assets reflected in the Company Financial Statements that have not been
disposed of in the ordinary course of business or pursuant to the Stock Purchase
Agreement and such property is free and clear of all Liens or mortgages.
2.9 Real Property. Neither the Company or any subsidiary of the Company
owns or leases or sublease real property.
2.10 Compliance with Law. The Company is not conducting its business or
affairs in violation of any applicable foreign, federal, state or local law,
ordinance, rule, regulation, court or administrative order, decree or process,
4
or any requirement of insurance carriers. The Company has not received any
notice of violation or claimed violation of any such law, ordinance, rule,
regulation, order, decree, process or requirement.
2.11 No Adverse Changes. There have not been (a) any material adverse
change in the business, prospects, the financial or other condition, or the
respective assets or liabilities of the Company or any subsidiary of the Company
as reflected in the Company Financial Statements, (b) any material loss
sustained by the Company or any subsidiary of the Company, including, but not
limited to any loss on account of theft, fire, flood, explosion, accident or
other calamity, whether or not insured, which has materially and adversely
interfered, or may materially and adversely interfere, with the operation of the
Company's or such subsidiary's business, or (c) any event, condition or state of
facts, including, without limitation, the enactment, adoption or promulgation of
any law, rule or regulation, the occurrence of which materially and adversely
does or would affect the results of operations or the business or financial
condition of the Company or any subsidiary of the Company.
2.12 Litigation. There is no claim, dispute, action, suit, proceeding
or investigation pending or, to the knowledge of the Company, threatened,
against or affecting the business of the Company or challenging the validity or
propriety of the transactions contemplated by this Agreement, at law or in
equity or admiralty or before any federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, nor to the
knowledge of the Company, has any such claim, dispute, action, suit, proceeding
or investigation been pending or threatened, during the 12-month period
preceding the date hereof; (b) there is no outstanding judgment, order, writ,
ruling, injunction, stipulation or decree of any court, arbitrator or federal,
state, local, foreign or other governmental authority, board, agency, commission
or instrumentality, against or materially affecting the business of the Company
and (c) the Company has not received any written or verbal inquiry from any
federal, state, local, foreign or other governmental authority, board, agency,
commission or instrumentality concerning the possible violation of any law, rule
or regulation or any matter disclosed in respect of its business.
2.13 Insurance. The Company currently maintains no insurance.
2.14 Articles of Incorporation and By-laws; Minute Books. The copies of
the Articles of Incorporation and Bylaws (or similar governing documents) of the
Company and all amendments to each are true, correct and complete. The minute
books of the Company and each subsidiary of the Company contain true and
complete records of all meetings and consents in lieu of meetings of their
respective Board of Directors (and any committees thereof), or similar governing
bodies, since the time of their respective organization.
2.15 Employee Benefit Plans. The Company does not maintain, nor has the
Company maintained in the past, any employee benefit plans ("as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), or any plans, programs, policies, practices, arrangements or
contracts (whether group or individual) providing for payments, benefits or
reimbursements to employees of the Company, former employees, their
beneficiaries and dependents under which such employees, former employees, their
beneficiaries and dependents are covered through an employment relationship with
the Company, any entity required to be aggregated in a controlled group or
affiliated service group with the Company for purposes of ERISA or the Internal
5
Revenue Code of 1986 (the "Code") (including, without limitation, under Section
414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA, at any relevant
time ("Benefit Plans").
2.16 Patents; Trademarks and Intellectual Property Rights. The Company
does not own or possesses any patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, Internet web site(s) or
proprietary rights of any nature.
2.17 Affiliate Transactions. Except as disclosed in the Stock Purchase
Agreement or periodic and annual reports filed with the SEC pursuant to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), neither the Company nor any officer, director or employee of the Company
(or any of the relatives or Affiliates of any of the aforementioned Persons) is
a party to any agreement, contract, commitment or transaction with the Company
or affecting the business of the Company, or has any interest in any property,
whether real, personal or mixed, or tangible or intangible, used in or necessary
to the Company which will subject the Sellers to any liability or obligation
from and after the Closing Date.
2.18 Trading. The Company's Common Stock is currently listed for
trading on the Nasdaq SmallCap Market ("Nasdaq"), and the Company has received
no notice that its Common Stock is subject to being delisted therefrom. However,
the Company has received a notice from Nasdaq dated July 9, 2001 notifying the
Company that it has failed to meet the minimum bid requirement of $1.00.
2.19 Compliance. The Company has complied in all material respects with
all applicable foreign, federal and state laws, rules and regulations,
including, without limitation, the requirements of the Exchange Act and the
Securities Act of 1933, as amended, (the "Securities Act") and is current in its
filings.
2.20 Filings. None of the filings made by the Company under the
Securities Act or the Exchange Act make any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF AAG AND THE PRINCIPAL
AAG and the Principal jointly and severally represent and warrant to
the Company that now and/or as of the Closing:
3.1 Due Organization and Qualification; Subsidiaries; Due
Authorization.
(a) AAG and each subsidiary of AAG is an entity duly organized,
validly existing and in good standing under the laws of its jurisdiction of
formation, with full power and authority to own, lease and operate its business
and properties and to carry on its business in the places and in the manner as
presently conducted or proposed to be conducted. AAG and each subsidiary of AAG
is in good standing as a foreign corporation in each jurisdiction in which the
properties owned, leased or operated, or the business conducted, by it requires
such qualification except for any such failure, which when taken together with
6
all other failures, is not likely to have a material adverse effect on the
business of AAG taken as a whole.
(b) AAG and each subsidiary of AAG does not own, directly or
indirectly, any capital stock, equity or interest in any corporation, firm,
partnership, joint venture or other entity, except as set forth on Schedule 3.1.
(c) AAG has requisite power and authority to execute and deliver
this Agreement, and to consummate the transactions contemplated hereby and
thereby. AAG has taken all action necessary for the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby, and
this Agreement constitutes the valid and binding obligation of AAG, enforceable
against AAG in accordance with its terms, except as may be affected by
bankruptcy, insolvency, moratoria or other similar laws affecting the
enforcement of creditors' rights generally and subject to the qualification that
the availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.
3.2 Information Supplied for Proxy. The information supplied by AAG for
inclusion in the proxy statement at the time the proxy statement is declared
effective by the SEC shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The information supplied by AAG for inclusion in
the proxy statement to be sent to the shareholders of the Company in connection
with the solicitation of proxies for the Company shareholder vote shall not, on
the date the proxy statement is first mailed to the shareholders of the Company,
contain any statement which, at such time, is false or misleading with respect
to any material fact, or omit to state any material fact necessary in order to
make the statements made therein, in light of the circumstances under which they
are made, not false or misleading; or omit to state any material fact necessary
to correct any statement in any earlier communication with respect to the
solicitation of proxies for the Company shareholder vote which has become false
or misleading. If at any time prior to the Company's special meeting of
shareholders any event or information should be discovered by the Company which
should be set forth in a supplement to the proxy statement, AAG shall promptly
inform the shareholders of the Company.
3.3 No Conflicts or Defaults. The execution and delivery of this
Agreement by AAG and the consummation of the transactions contemplated hereby do
not and shall not (a) contravene the organizational documents of AAG or any
subsidiary, or (b) with or without the giving of notice or the passage of time,
(i) violate, conflict with, or result in a breach of, or a default or loss of
rights under, any material covenant, agreement, mortgage, indenture, lease,
instrument, permit or license to which AAG or such subsidiary is a party or by
which AAG or such subsidiary or any of their respective assets are bound, or any
judgment, order or decree, or any law, rule or regulation to which AAG, such
subsidiary or any of their respective assets are subject, (ii) result in the
creation of, or give any party the right to create, any Lien upon any of the
assets of any subsidiary, or (iii) terminate or give any party the right to
terminate, amend, abandon or refuse to perform, any material agreement,
arrangement or commitment to which any subsidiary is a party or by which any
subsidiary or any of its assets are bound, or (iv) accelerate or modify, or give
any party the right to accelerate or modify, the time within which, or the terms
7
under which any subsidiary is to perform any duties or obligations or receive
any rights or benefits under any material agreement, arrangement or commitment
to which it is a party.
3.4 Capitalization. Set forth on Schedule 3.4 is a list of all
Shareholder Equity Interests, setting forth the names, addresses and number of
shares owned. All of the Equity Interests are, and when transferred in
accordance with the terms hereof, will be, duly authorized, validly issued,
fully paid and nonassessable, and have not been or will not be transferred in
violation of any rights of third parties. The shares are not subject to any
preemptive or subscription right, any voting trust agreement or other contract,
agreement, arrangement, option, warrant, call, commitment or other right of any
character obligating or entitling any Shareholder to issue, sell, redeem or
repurchase any Equity Interest, and there is no outstanding security of any kind
convertible into or exchangeable for shares.
3.5 Financial Statements. Schedule 3.5 contains copies of the
consolidated balance sheet of AAG and its subsidiaries at December 31, 2000 and
the related statements of operations, stockholders' equity and cash flows for
the fiscal year then ended, including the notes thereto, as audited by Xxxxxxxxx
Xxxxxxxxx Price Xxxxx Xxxxxxx & Co., P.A., certified public accountants and the
unaudited balance sheet of AAG and its subsidiaries at June 30, 2001, and the
related consolidated statements of operations, stockholders' equity and cash
flows for the six month period then ended prepared by the Company's management
(collectively, the "AAG Financial Statements").
3.6 Further Financial Matters. Except as set forth on Schedule 3.6, AAG
has no material liabilities or obligations, whether secured or unsecured,
accrued, determined, absolute or contingent, asserted or unasserted or
otherwise, which are required to be reflected or reserved in a balance sheet or
the notes thereto under generally accepted accounting principles, but which are
not reflected in the AAG Financial Statements.
3.7 Taxes. Except as indicated on Schedule 3.7, AAG has complied with
all relevant legal requirements relating to registration or notification for
taxation purposes. All tax returns and reports filed on or prior to the date
hereof have been properly prepared and are true, correct (and to the extent such
returns reflect judgments made by the subsidiaries, such judgments were
reasonable under the circumstances) and complete in all material respects.
Except as indicated on Schedule 3.7, no extension for the filing of any such
return or report is currently in effect. Except as indicated on Schedule 3.7, no
tax return or tax return liability of AAG has been audited or, presently under
audit. All taxes which have been asserted to be payable as a result of any
audits have been paid or have been provided for in the AAG Financial Statements.
Except as indicated on Schedule 3.7, AAG has not given or been requested to give
waivers of any statute of limitations relating to the payment of any Taxes (or
any related penalties, fines and interest). Except as indicated on Schedule 3.7,
all payments for withholding taxes, unemployment insurance and other amounts
required to be paid for periods prior to the date hereof to any governmental
authority in respect of employment obligations of the subsidiaries have been
paid or shall be paid prior to the Closing and have been duly provided for on
the books and records of AAG and in the AAG Financial Statements.
8
3.8 Indebtedness; Contracts; No Defaults.
(a) Schedule 3.8 sets forth a true, complete and correct list of
all material instruments, agreements, indentures, mortgages, guarantees, notes,
commitments, accommodations, letters of credit or other arrangements or
understandings, whether written or oral, to which the subsidiaries are a party
(collectively, the "AAG Operating Agreements"). An agreement shall not be
considered material for the purposes of this Section 3.8(a) if it provides for
expenditures or receipts of less than US $100,000 and has been entered into by
any subsidiary in the ordinary course of business. The AAG Operating Agreements
constitute all of the contracts, agreements, understandings and arrangements
required for the operation of the business of AAG or which have a material
effect thereon. Copies of all such material written AAG Operating Agreements
have previously been delivered or otherwise made available to the Company and
such copies are true, complete and correct as of the date hereof.
(b) Except as disclosed on Schedule 3.8, neither AAG or any
subsidiary of AAG nor, to AAG's knowledge, any other person or entity, is not in
breach in any material respect of, or in default in any material respect under,
any material contract, agreement, arrangement, commitment or plan to which AAG
or any subsidiary of AAG is a party, and no event or action has occurred, is
pending or is threatened, which, after the giving of notice, passage of time or
otherwise, would constitute or result in such a material breach or material
default by such subsidiary to the knowledge of any other person or entity. No
subsidiary has received any notice of default under any contract, agreement,
arrangement, commitment or plan to which it is a party, which default has not
been cured to the satisfaction of, or duly waived by, the party claiming such
default on or before the date hereof.
3.9 Personal Property. Except as set forth on Schedule 3.9, AAG has
good and marketable title to all of its tangible personal property and assets,
including, without limitation, all of the assets reflected in the AAG Financial
Statements that have not been disposed of in the ordinary course of business
since December 31, 2000, free and clear of all Liens or mortgages, except for
any Lien for current taxes not yet due and payable and such restrictions, if
any, on the disposition of securities as may be imposed by federal or applicable
state securities laws.
3.10 Real Property.
(a) Schedule 3.10 sets forth a true and complete list of all real
property owned by, or leased or subleased by or to, AAG or its subsidiaries.
(b) Except as set forth on Schedule 3.10, each lease to which AAG
or its subsidiaries are a party is valid, binding and in full force and effect
with respect to AAG or such subsidiary and, to the knowledge of AAG, all other
parties thereto; no notice of default or termination under any such lease is
outstanding.
3.11 Compliance with Law. Except as set forth on Schedule 3.11, AAG and
each subsidiary is conducting its respective business or affairs in material
compliance with applicable law, ordinance, rule, regulation, court or
administrative order, decree or process, or any requirement of insurance
carriers. Neither AAG nor any subsidiary has received any notice of violation or
9
claimed violation of any such law, ordinance, rule, regulation, order, decree,
process or requirement.
3.12 No Adverse Changes. Except as set forth on Schedule 3.12, since
December 31, 2000, there has not been (a) any material adverse change in the
business, prospects, the financial or other condition, or the respective assets
or liabilities of AAG and its subsidiaries as reflected in the AAG Financial
Statements, (b) any material loss sustained by AAG and its subsidiaries,
including, but not limited to any loss on account of theft, fire, flood,
explosion, accident or other calamity, whether or not insured, which has
materially and adversely interfered, or may materially and adversely interfere,
with the operation of AAG's business, or (c) to the best knowledge of AAG, any
event, condition or state of facts, including, without limitation, the
enactment, adoption or promulgation of any law, rule or regulation, the
occurrence of which materially and adversely does or would affect the results of
operations or the business or financial condition of AAG.
3.13 Litigation. (a) Except as set forth on Schedule 3.13, there is no
claim, dispute, action, suit, proceeding or investigation pending or, to the
knowledge of AAG threatened, against or affecting the business of AAG or any of
its subsidiaries, or challenging the validity or propriety of the transactions
contemplated by this Agreement, at law or in equity or admiralty or before any
authority, board, agency, commission or instrumentality, nor to the knowledge of
AAG, has any such claim, dispute, action, suit, proceeding or investigation been
pending or threatened, during the 12-month period preceding the date hereof; (b)
there is no outstanding judgment, order, writ, ruling, injunction, stipulation
or decree of any court, arbitrator or federal, state, local, foreign or other
governmental authority, board, agency, commission or instrumentality, against or
materially affecting the business of AAG or any of its subsidiaries; and (c) AAG
has not received nor has any subsidiary received any written or verbal inquiry
from any federal, state, local, foreign or other governmental authority, board,
agency, commission or instrumentality concerning the possible violation of any
law, rule or regulation or any matter disclosed in respect of its business.
3.14 Insurance. AAG and its subsidiaries maintain insurance against all
risks customarily insured against by companies in its industry. All such
policies are in full force and effect, and no subsidiary has received any notice
from any insurance company suspending, revoking, modifying or canceling (or
threatening such action) any insurance policy issued to AAG or subsidiary.
3.15 Articles of Incorporation; Minute Books. The copies of the
Articles of Incorporation of AAG, and all amendments to each are true, correct
and complete. The minute books of AAG contain true and complete records of all
meetings and consents in lieu of meetings of their Board of Directors (and any
committees thereof), or similar governing bodies, since the time of their
respective organization. The stock records of AAG are true, correct and
complete.
3.16 Employee Benefit Plans. Except as set forth on Schedule 3.16, AAG
does not have in existence any share incentive, share option scheme or profit
sharing bonus or other such incentive scheme for any of its directors or
employees. Except as set forth in Item 3.17 or required under the applicable
laws, there are no arrangements, schemes, customs or practices (whether legally
enforceable or not) in operation for the payment of or contributions towards any
10
provident fund, pensions, allowances, lump sums or other like benefits on
retirement or on death or during periods of sickness or disablement for the
benefit of any director or former director or employee or former employee or for
the benefit of the dependents of any such persons nor has any proposal been
announced to establish any such agreement or agreements.
3.17 Patents; Trademarks and Intellectual Property Rights. AAG and each
subsidiary owns or possesses sufficient legal rights to all patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information,
internet web site(s) proprietary rights and processes necessary for its business
as now conducted without any conflict with or infringement of the rights of
others. Except as set forth on Schedule 3.17, there are no outstanding options,
licenses or agreements of any kind relating to the foregoing, and no subsidiary
is bound by, or a party to, any options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, proprietary rights and processes of any
other person or entity.
3.18 Brokers. Except as set forth on Schedule 3.18, all negotiations
relative to this Agreement and the transactions contemplated hereby have been
carried without the intervention of any Person in such a manner as to give rise
to any valid claim by any Person against any Shareholder for a finder's fee,
brokerage commission or similar payment.
3.19 Purchase for Investment.
(a) The Shareholders are acquiring the Company Shares for
investment for their own account and not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and the Shareholders
have no present intention of selling, granting any participation in, or
otherwise distributing the same. The Shareholders further represent that they do
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or to any third person,
with respect to any of the Company Shares.
(b) AAG and the Shareholders understand that the Company Shares are
not registered under the Securities Act on the ground that the sale and the
issuance of securities hereunder is exempt from registration under the
Securities Act pursuant to Section 4(2) thereof, and that the Company's reliance
on such exemption is predicated on AAG's and the Shareholders' representations
set forth herein. Each Shareholder is deemed to be an "accredited investor" as
that term is defined in Rule 501(a) of Regulation D under the Securities Act.
3.20 Investment Experience. Each Shareholder acknowledges that it can
bear the economic risk of its investment, and has such knowledge and experience
in financial and business matters that it is capable of evaluating the merits
and risks of the investment in the Company Shares.
3.21 Information. AAG and the Shareholders have carefully reviewed such
information as AAG and the Shareholders deemed necessary to evaluate an
investment in the Company Shares. To the full satisfaction of AAG and the
Shareholders, it has been furnished all materials that it has requested relating
to the Company and the issuance of the Company Shares hereunder, and AAG and
each Shareholder has been afforded the opportunity to ask questions of
11
representatives of the Company to obtain any information necessary to verify the
accuracy of any representations or information made or given to AAG and the
Shareholders. Notwithstanding the foregoing, nothing herein shall derogate from
or otherwise modify the representations and warranties of the Company set forth
in this Agreement, on which AAG and each Shareholder has relied in making an
Exchange of the Equity Interests of the Company Shares.
3.22 Restricted Securities. AAG and each Shareholder understands that
the Company Shares may not be sold, transferred, or otherwise disposed of
without registration under the Act or an exemption there from, and that in the
absence of an effective registration statement covering the Company Shares or
any available exemption from registration under the Securities Act, the Company
Shares must be held indefinitely. AAG and each Shareholder is aware that the
Company Shares may not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are met. Among the
conditions for use of Rule 144 may be the availability of current information to
the public about the Company.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnity of AAG and the Shareholders. The Company agrees to
jointly and severally defend, indemnify and hold harmless AAG and the
Shareholders from and against, and to reimburse AAG and the Shareholders with
respect to, all liabilities, losses, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, asserted against or
incurred by AAG by reason of, arising out of, or in connection with any material
breach of any representation or warranty contained in this Agreement made by the
Company or in any document or certificate delivered by the Company pursuant to
the provisions of this Agreement or in connection with the transactions
contemplated thereby.
4.2 Indemnity of the Company. AAG and the Principal jointly and
severally agree to defend, indemnify and hold harmless the Company from and
against, and to reimburse the Company with respect to, all liabilities, losses,
costs and expenses, including, without limitation, reasonable attorneys' fees
and disbursements, asserted against or incurred by the Company by reason of,
arising out of, or in connection with any material breach of any representation
or warranty contained in this Agreement and made by AAG or any Shareholder or in
any document or certificate delivered by AAG or any Shareholder pursuant to the
provisions of this Agreement or in connection with the transactions contemplated
thereby.
4.3 Indemnification Procedure. A party (an "Indemnified Party") seeking
indemnification shall give prompt notice to the other party (the "Indemnifying
Party") of any claim for indemnification arising under this Article 4. The
Indemnifying Party shall have the right to assume and to control the defense of
any such claim with counsel reasonably acceptable to such Indemnified Party, at
the Indemnifying Party's own cost and expense, including the cost and expense of
reasonable attorneys' fees and disbursements in connection with such defense, in
which event the Indemnifying Party shall not be obligated to pay the fees and
disbursements of separate counsel for such in such action. In the event,
however, that such Indemnified Party's legal counsel shall determine that
defenses may be available to such Indemnified Party that are different from or
in addition to those available to the Indemnifying Party, in that there could
12
reasonably be expected to be a conflict of interest if such Indemnifying Party
and the Indemnified Party have common counsel in any such proceeding, or if the
Indemnified Party has not assumed the defense of the action or proceedings, then
such Indemnifying Party may employ separate counsel to represent or defend such
Indemnified Party, and the Indemnifying Party shall pay the reasonable fees and
disbursements of counsel for such Indemnified Party. No settlement of any such
claim or payment in connection with any such settlement shall be made without
the prior consent of the Indemnifying Party which consent shall not be
unreasonably withheld.
ARTICLE V
DELIVERIES
5.1 Items to be delivered to AAG and the Shareholders prior to or at
Closing by the Company.
(a) articles of incorporation and amendments thereto, bylaws and
amendments thereto, certificate of good standing in the Company's state of
incorporation;
(b) all applicable schedules hereto;
(c) all minutes and resolutions of board of director and
shareholder meetings in possession of the Company;
(d) shareholder list;
(e) all financial statements and tax returns in possession of the
Company;
(f) resolution from the Company's current directors appointing
designees of AAG to the Company's Board of Directors;
(g) letters of resignation from the Company's current officers and
directors to be effective upon Closing and after the appointments described in
this section;
(h) certificates representing Company Shares issued in the
denominations as set forth opposite the respective names of the Shareholders as
set forth on Schedule 1.1 on or before the Closing, duly authorized, validly
issued, fully paid for and non-assessable;
(i) copies of board, and if applicable, shareholder resolutions
approving this transaction and authorizing the issuances of the shares hereto;
(j) any other document reasonably requested by AAG that it deems
necessary for the consummation of this transaction.
5.2 Items to be delivered to the Company prior to or at Closing by AAG.
(a) articles of incorporation and amendments thereto and amendments
thereto with respect to AAG and each subsidiary;
13
(b) all applicable schedules hereto;
(c) all minutes and resolutions of board of director and
shareholder meetings of AAG and each subsidiary in possession of AAG;
(d) shareholder list;
(e) all financial statements and tax returns in possession of AAG;
(f) resolution from AAG's current directors appointing designees of
AAG to the Company's Board of Directors;
(g) copies of board and shareholder resolutions approving the
Exchange; and
(h) any other document reasonably requested by the Company that it
deems necessary for the consummation of this transaction.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to Closing. The obligations of the parties
under this Agreement shall be and are subject to fulfillment, prior to or at the
Closing, of each of the following conditions any of which may be waived by the
parties:
(a) The SEC and Nasdaq shall have consented to this Agreement and
the transactions disclosed in the proxy statement.
(b) That each of the representations and warranties of the parties
contained herein shall be true and correct at the time of the Closing Date as if
such representations and warranties were made at such time.
(c) That the parties shall have performed or complied with all
agreements, terms and conditions required by this Agreement to be performed or
complied with by them prior to or at the time of the Closing.
(d) No material adverse change shall have occurred in the
financial, business or trading conditions of the Company (excluding disposal of
its subsidiaries) or AAG from the date hereof up to and including the Closing
Date.
6.2 Conditions to Obligations of the Company. The obligations of the
Company shall be subject to fulfillment by AAG and/or the Shareholders prior to
or at the Closing of each of the following conditions, any of which may be
waived by the Company:
(a) AAG shall have paid the costs and expenses of the Company as
provided on Schedule 6.2(a)
14
(b) AAG shall have no more than 5,700,000 shares of its common
stock outstanding.
6.3 Conditions to Obligations of AAG. The obligations of AAG shall be
subject to fulfillment by the Company prior to or at the Closing of each of the
following conditions, any of which may be waived by AAG:
(a) The Company shall have delivered evidence reasonably
satisfactory to AAG regarding the approval of the shareholders of the Company
for this Agreement and the sale of the Company's assets referred to in Section
6.2(b) (the "Transferred Assets").
(b) As of the Closing, the Company shall have transferred all of
its assets (including equity interests in its subsidiaries) and assigned all of
its liabilities whatsoever, contingent or otherwise, to the effect that
immediately prior to the Exchange, the Company will have no assets nor
liabilities exceeding $75,000. All such transfers shall be made under the Stock
Purchase Agreement.
(c) The Company shall not have received notification from Nasdaq
that the Company's Common Stock has been delisted from trading on Nasdaq.
(d) The Company shall have increased the authorized shares of Class
A Common Stock to 87,000,000 (the "Share Increase").
(e) All of the shareholders holding shares of Class B Common Stock
shall have converted, sold or cancelled so that, at or prior to the Closing, the
Company shall have no shares of Class B Common Stock outstanding.
ARTICLE VII
ADDITIONAL AGREEMENTS
7.1 Company Special Meeting. The Company shall (i) in accordance with
the Florida Business Corporation Act, its Articles of Incorporation and Bylaws,
duly call, give notice of, convene and hold a special meeting of the Company
shareholders (the "Company Shareholders' Meeting") for the purpose of voting
upon the approval of this Agreement, (a) the Stock Purchase Agreement, (b) an
amendment to its Articles of Incorporation increasing the number of authorized
shares of Company Class A common stock, (c) an amendment to its Articles of
Incorporation changing the Company's corporate name, and (d) any related
proposals; and (ii) recommend that the Company shareholders vote in favor of all
such maters.
7.2 Further Action; Consents; Filings. Upon the terms and subject to
the conditions hereof, each of the parties hereto shall (i) use all commercially
reasonable efforts to take, or cause to be taken, all appropriate action and do,
or cause to be done, all things necessary, proper or advisable under applicable
law or otherwise to consummate and make effective the Exchange and this
Agreement, (ii) use all reasonable efforts to obtain from third parties any
consents, licenses, permits, waivers, approvals, authorizations or orders
required to be obtained or made by AAG or the Company or any AAG subsidiary, in
connection with the authorization, execution and delivery of this Agreement and
the consummation of the Exchange and the other transactions contemplated by this
Agreement and (iii) make all necessary filings, and thereafter make any other
required submissions, with respect to this Agreement, the asset sale and the
other transactions contemplated by this Agreement that are required under any
applicable law.
15
ARTICLE VIII
COVENANTS
8.1 Shareholders Vote; Proxy. As soon as practicable after the date
hereof, the Company shall (a) cause the preparation and filing with the
Securities and Exchange Commission a proxy statement with respect to this
Agreement, the sale of all current assets of the Company, the amendments to the
articles of incorporation changing the Company's name and increasing the
authorized capital stock and class A common stock and (b) call a special meeting
of the Shareholders (the "Special Meeting") to approve such matters.
8.2 NASDAQ Application. AAG shall provide such information as may be
reasonably requested by Nasdaq relating to the continued listing of the
Company's Common Stock on Nasdaq.
8.3 Shareholders Consent. Each of the Shareholders agree to the
Exchange of their Equity Interest for the Company Shares.
ARTICLE IX
NO PUBLIC DISCLOSURE
9.1 No Public Disclosure. Without the prior written consent of the
others, none of the Company or AAG will, and will each cause their respective
representatives not to, make any release to the press or other public disclosure
with respect to either the fact that discussions or negotiations have taken
place concerning the transactions contemplated by this Agreement, the existence
or contents of this Agreement or any prior correspondence relating to this
transactions contemplated by this Agreement, except for such public disclosure
as may be necessary, in the written opinion of outside counsel (reasonably
satisfactory to the other parties) for the party proposing to make the
disclosure not to be in violation of or default under any applicable law,
regulation or governmental order. If either party proposes to make any
disclosure based upon such an opinion, that party will deliver a copy of such
opinion to the other party, together with the text of the proposed disclosure,
as far in advance of its disclosure as is practicable, and will in good faith
consult with and consider the suggestions of the other party concerning the
nature and scope of the information it proposes to disclose.
ARTICLE X
CONFIDENTIAL INFORMATION
10.1 Confidential Information. In connection with the negotiation of
this Agreement and the consummation of the transactions contemplated hereby,
each party hereto will have access to data and confidential information relating
to the other party. Each party hereto shall treat such data and information as
confidential, preserve the confidentiality thereof and not duplicate or use such
data or information, except in connection with the transactions contemplated
hereby, and in the event of the termination of this Agreement for any reason
whatsoever, each party hereto shall return to the other all documents, work
papers and other material (including all copies thereof) obtained in connection
16
with the transactions contemplated hereby and will use reasonable efforts,
including instructing its employees who have had access to such information, to
keep confidential and not to use any such data or information; provided,
however, that such obligations shall not apply to any data and information (i)
which at the time of disclosure, is available publicly, (ii) which, after
disclosure, becomes available publicly through no fault of the receiving party,
(iii) which the receiving party knew or to which the receiving party had access
prior to disclosure by the disclosing party, (iv) which is required by law,
regulation or exchange rule, or in connection with legal process, to be
disclosed, (v) which is disclosed by a receiving party to its attorneys or
accountants, who shall respect the above restrictions, or (vi) which is obtained
in connection with any Tax matters and is disclosed in connection with the
filing of Tax returns or claims for refund or in conducting an audit or other
proceeding.
ARTICLE XI
TERMINATION
11.1 Termination. This Agreement may be terminated at any time before
or, at Closing, by:
(a) The mutual agreement of the constituent parties;
(b) Any party if:
(i) Any provision of this Agreement applicable to a party shall
be materially untrue or fail to be accomplished;
(ii) Any legal proceeding shall have been instituted or shall
be imminently threatening to delay, restrain or prevent the consummation of this
Agreement; or
(iii) If by December 31, 2001, the conditions precedents to
Closing are not satisfied.
11.2 Effect of Termination. In the event of termination of this
Agreement pursuant to Section 8.1, this Agreement shall become void, there shall
be no liability under this Agreement on the part of the Company or AAG or any of
their respective officers or directors, and all rights and obligations of each
party hereto shall cease.
ARTICLE XII
MISCELLANEOUS
12.1 Survival of Representations, Warranties and Agreements. All
representations and warranties and statements made by a party to in this
Agreement or in any document or certificate delivered pursuant hereto shall
survive the Closing Date for so long as the applicable statute of limitations
shall remain open. Each of the parties hereto is executing and carrying out the
provisions of this agreement in reliance upon the representations, warranties
and covenants and agreements contained in this agreement or at the closing of
the transactions herein provided for and not upon any investigation which it
17
might have made or any representations, warranty, agreement, promise or
information, written or oral, made by the other party or any other person other
than as specifically set forth herein.
12.2 Access to Books and Records. During the course of this transaction
through Closing, each party agrees to make available for inspection all
corporate books, records and assets, and otherwise afford to each other and
their respective representatives, reasonable access to all documentation and
other information concerning the business, financial and legal conditions of
each other for the purpose of conducting a due diligence investigation thereof.
Such due diligence investigation shall be for the purpose of satisfying each
party as to the business, financial and legal condition of each other for the
purpose of determining the desirability of consummating the proposed
transaction. The Parties further agree to keep confidential and not use for
their own benefit, except in accordance with this Agreement any information or
documentation obtained in connection with any such investigation.
12.3 Further Assurances. If, at any time after the Closing, the parties
shall consider or be advised that any further deeds, assignments or assurances
in law or that any other things are necessary, desirable or proper to complete
the merger in accordance with the terms of this agreement or to vest, perfect or
confirm, of record or otherwise, the title to any property or rights of the
parties hereto, the Parties agree that their proper officers and directors shall
execute and deliver all such proper deeds, assignments and assurances in law and
do all things necessary, desirable or proper to vest, perfect or confirm title
to such property or rights and otherwise to carry out the purpose of this
Agreement, and that the proper officers and directors the parties are fully
authorized to take any and all such action.
12.4 Notice. All communications, notices, requests, consents or demands
given or required under this Agreement shall be in writing and shall be deemed
to have been duly given when delivered to, or received by prepaid registered or
certified mail or recognized overnight courier addressed to, or upon receipt of
a facsimile sent to, the party for whom intended, as follows, or to such other
address or facsimile number as may be furnished by such party by notice in the
manner provided herein:
18
If to the Company:
Uniservice Corporation
000 Xxxx Xxx Xxxx Xxxx., Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx, 00000
Attention: President
Tel: 000-000-0000
Fax: 000-000-0000
If to AAG:
x/x Xxxxxxxxx xx Xxxxx Xxxxxxx
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxx, 00000
Attention: Xxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Xxxxxx, Xxxxxx & Xxxxxx
000 Xxxx Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx, 00000
Attention: Xxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
If to the Shareholders:
c/o Motorcars of South Florida
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxx, 00000
Attention: Xxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
Or such other as AAG may notify to the other parties to the
Agreement by not less than five (5) Business Day's notice.
12.5 Entire Agreement. This Agreement, the Schedules and any
instruments and agreements to be executed pursuant to this Agreement, sets forth
the entire understanding of the parties hereto with respect to its subject
matter, merges and supersedes all prior and contemporaneous understandings with
respect to its subject matter and may not be waived or modified, in whole or in
part, except by a writing signed by each of the parties hereto. No waiver of any
provision of this Agreement in any instance shall be deemed to be a waiver of
the same or any other provision in any other instance. Failure of any party to
enforce any provision of this Agreement shall not be construed as a waiver of
its rights under such provision.
12.6 Successors and Assigns. This Agreement shall be binding upon,
enforceable against and inure to the benefit of, the parties hereto and their
respective heirs, administrators, executors, personal representatives,
19
successors and assigns, and nothing herein is intended to confer any right,
remedy or benefit upon any other person. This Agreement may not be assigned by
any party hereto except with the prior written consent of the other parties,
which consent shall not be unreasonably withheld.
12.7 Governing Law. This Agreement shall in all respects be governed by
and construed in accordance with the laws of the State of Florida are applicable
to agreements made and fully to be performed in such state, without giving
effect to conflicts of law principles.
12.8 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
12.9 Construction. Headings contained in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Articles, Sections and Exhibits are to the articles,
sections and exhibits, respectively, of this Agreement. The Disclosure Schedules
are hereby incorporated herein by reference and made a part of this Agreement.
As used herein, the singular includes the plural, and the masculine, feminine
and neuter gender each includes the others where the context so indicates.
12.10 Severability. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, this Agreement
shall be interpreted and enforceable as if such provision were severed or
limited, but only to the extent necessary to render such provision and this
Agreement enforceable.
12.11 Costs and Expenses. AAG shall pay all costs and expenses
as scheduled.
20
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first set forth above.
UNISERVICE CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
--------------------
ASSOCIATED AUTOMATIVE GROUP, INC.
By: /s/ Xxxxx Xxxxxx
----------------
Its: Vice President
Principal:
__________________________________
Shareholders:
__________________________________
21
DISCLOSURE SCHEDULE
22
