AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of January 17, 2002 ("Agreement"),
---------
between United Xxxxxxx.Xxx , a Nevada corporation ("United"), and Quick Draw,
Inc., a Nevada Corporation hereinafter referred to as "QDI" or "Company."
BACKGROUND
The respective Boards of Directors of United and QDI have each approved,
upon the terms and subject to the conditions set forth in this Agreement, the
merger ("Merger") of QDI with and into United whereby each issued and
------
outstanding share of common stock of QDI not owned directly or indirectly by QDI
-
will be converted into the common stock of United ("Common Stock") as set forth
in Article I.
In consideration of the respective representations, warranties, covenants
and agreements contained in this Agreement, United and QDI hereby agree as
follows:
ARTICLE I
THE MERGER
1.01 The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the relevant provisions of the Nevada Corporation Act
("Nevada Statute"), QDI shall be merged with and into United subject to the
conditions set forth in Article VI. Following the Merger, United shall continue
as the surviving corporation ("Surviving Corporation") and shall continue its
---------------------
existence under the laws of the State of Nevada, and the separate corporate
existence of QDI shall cease.
1.02 Effective Time. This Agreement shall become effective at such
time ("Effective Time") as the conditions set forth in Article VI are satisfied
or waived, if permissible.
1.03 Effects of the Merger. The Merger shall have the effects
specified in the Nevada Statute. This Plan of Merger is intended to constitute
"a plan of reorganization" within the meaning of Section 354 of the Internal
Revenue Code, 1986 as amended. Further for federal income tax purposes it is
intended that the merger shall qualify as a reorganization as defined in Section
368 (a) of the Internal Revenue Code.
1.04 Directors and Officers of the Surviving Corporation. From and
after the Effective Time, the directors and officers of the Surviving
Corporation shall be the persons set forth on Exhibit 1.04 hereto, until their
successors shall have been duly elected or appointed and qualified or until
their earlier death, resignation or removal in accordance with the Surviving
Corporation's Certificate of Incorporation and by laws.
1.05 Shares. At or prior to the Effective Time, by virtue of the
Merger the following events shall occur:
(a) Each share of common stock and preferred stock held by QDI as treasury
stock shall be cancelled and retired and shall cease to exist, and no payment or
consideration shall be made with respect thereto;
(b) The total issued and outstanding Common Stock shall not exceed 6,000,000
shares immediately prior to the issuance of Common Stock as set forth in
Section 1.05(c). United shall also have outstanding 5,000,000 shares of Class
"A" 8% non-cumulative preferred stock ("Preferred Shares"). Features of the
Preferred shares shall include (1) voting rights of 20 votes for each Preferred
share held. (2) convertible by the holder at anytime into United's common
shares at one common share for each Preferred Share held; the common share
conversion feature shall be anti-dilutive.
(c) United shall arrange delivery of 1,925,000 shares (post, one for eight
reverse stock split effective December 21, 2001) of common stock ("Common
Stock") to effectuate closing of this Agreement. These common shares to be
issued from United's treasury shall be issued to each of QDI shareholders, as
set forth on Exhibit 1.05(c) annexed hereto, in the number of Common Stock
shares set forth next to each name.
1.06 Private Placement.
(a) The Common Stock issued to QDI's shareholders have not been and will not
be registered with the Securities and Exchange Commission ("SEC") or the
securities commission of any state, including but not limited to Nevada and
California, pursuant to an exemption from registration by virtue of QDI's
intended compliance with the provisions of Sections 4(2) and 4(6) of the
Securities Act of 1933, as amended ("Securities Act"), and the Common Stock will
be made available only to "accredited investors" or Company shareholders who
have used a "Purchaser representative", as defined in Rule 501(a) of Regulation
D promulgated under the Securities Act. Such exemption limits the number and
types of investors to which the offering of Common Stock may be made and
restricts subsequent transfers of the Common Stock so offered which also may be
restricted by state securities laws. The Common Stock may not be resold or
otherwise disposed of by QDI's shareholders unless, in the opinion of counsel to
United, registration under federal and applicable state securities laws is not
required or compliance is made with the registration requirements of such laws.
ARTICLE II
EXCHANGE OF SHARES
2.01 Issuance of Certificates. Promptly after the Effective Time,
the Surviving Corporation shall issue to each person set forth on Exhibit
1.06(c) certificates representing the Common Stock to be issued to each QDI
shareholder and simultaneously each QDI shareholder shall exchange and surrender
the certificate representing all of such QDI shareholder's shares in the
Company. At the close of business on the day of the Effective Time, the stock
ledger of QDI shall be closed.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
UNITED
United represents and warrants to QDI as of the date of this Agreement and
as of the Effective Time as follows:
3.01 Existence; Good Standing. United is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
3.02 Capitalization. The authorized capital stock of United prior to
the Reverse Stock Split consists of 50,000,000 shares of Common Stock, par value
$0.001 ("Common Shares") and 20,000,000 shares of Preferred Stock par value
$0.001 ("Preferred Shares"). As of September 30, 2001, there were 41,202,947
shares (prior to 1 for 8 reverse split effective December 21, 2001) of Common
Stock issued and outstanding At January 17, 2002 there were 5,150,368 shares of
common stock and 5,000,000 shares of Preferred Stock issued and outstanding.
There were options outstanding to Xx. Xxxxx X. Xxxxxxxx for 100,000 (post
1-for-8 reverse split) shares at $0.10 per share exercisable at any time during
the next 5 years, and options to Xx. Xxxxx X. Xxxxxx for 500,000 (post 1-for-8
reverse split) shares at $0.10 per share exercisable at any time during the next
5 years. The Preferred Shares issued and outstanding are 8% non-cumulative and
convertible into Common Shares as set forth in the provisions thereto. All
issued and outstanding shares of Common Stock are duly authorized, validly
issued, free of preemptive rights, non-assessable, and, are fully paid. Except
as set forth in this Section 3.02, (i) United is not a party to or bound by any
written or oral contract or agreement which grants to any person an option,
warrant or right of first refusal or other right of any character to acquire at
any time, or upon the happening of any stated events any shares of or interest
in United, whether or not presently authorized, issued or outstanding, and (ii)
there are outstanding (a) no shares of capital stock or other voting securities
of United, (b) no securities of United or any of its subsidiaries convertible
into or exchangeable for shares of capital stock or voting securities of United,
(c) no options or other rights to acquire from United or any of its
subsidiaries, and no obligation of United or any of its subsidiaries to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of United, and (d) no equity
equivalents, interests in the ownership or earnings of United or any of its
subsidiaries or other similar rights. Upon issuance of the Common Stock to
QDI's shareholders, such shares of Common Stock shall be duly authorized,
validly issued, fully paid, non-assessable, and free of preemptive rights.
3.03 Authorization: Validity and Effect of Agreements. United has the
requisite corporate power and authority to execute and deliver this Agreement.
The consummation by United of the transactions contemplated hereby has been duly
authorized by all requisite corporate action and the issuance of the Common
Stock to QDI' shareholders is required to be approved by the Board of Directors
of United and such approval was obtained by a meeting of the Board of Directors
held on January 17, 2001. This Agreement constitutes the valid and legally
binding obligation of United, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, moratorium or other similar laws relating
to creditors' rights and general principles of equity.
3.04 No Violation. To the best of United's knowledge neither the
execution and delivery by United of this Agreement, nor the consummation by
United of the transactions contemplated hereby in accordance with the terms
hereof, will: (i) conflict with or result in a breach of any provisions of the
Articles of Incorporation or Bylaws of United (ii) violate, or conflict with,
or result in a breach of any provision of, or constitute a default (or an event
which with notice or lapse of time or both, would constitute a default) under,
or result in the termination or in a right of termination or cancellation of, or
accelerate the performance required by, or result in the triggering of any
payment of compensation under, or result in the creation of any lien, security
interest, charge or encumbrance ("Lien") upon any of the material properties of
United or its subsidiaries under, or result in being declared void, voidable, or
without further binding effect, any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, deed of trust or any material license,
franchise permit, lease, contract, agreement or other instrument, commitment or
obligation to which United or any of United's subsidiaries is a party, or by
which United or any of United's subsidiaries or any of their respective
properties is bound or affected, except for any of the foregoing matters which
would not have a material adverse effect on the business, results of operations,
financial condition or prospects of United and its subsidiaries taken as a whole
("United Material Adverse Effect"), or (iii) other than the filings required
under the Securities Exchange Act of 1934, ("Exchange Act"), the Securities Act
or applicable state securities and "Blue Sky" laws or filings in connection with
the maintenance of its qualification to do business in other jurisdictions, and
the filings contemplated by Section 5.02 of this Agreement (collectively,
"Regulatory Filings"), require any material consent, approval or authorization
of, or declaration, filings or registration with, any domestic governmental or
regulatory authority, the failure to obtain or make which would have a United
Material Adverse Effect.
3.05 Documents. United has delivered to QDI the following
reports and/or statements:
Audited financial statements for the year ended December 31, 2000.
Form 10-K SEC filing for the year ended December 31, 2000.
Form 10-Q SEC filing for the three month and nine month periods ended September
30, 2001.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF QDI
QDI represents and warrants to United as of the date of this Agreement and
as of the Effective Time as follows:
4.01 Existence; Good Standing; Corporate Authority; Compliance with Law
QDI is a corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. The copies of QDI
Articles of Incorporation and By Laws previously delivered to United are true
and correct and have not since been amended, modified or rescinded.
4.02 Authorization, Validity and Effect of Agreements. QDI has the requisite
corporate power and authority to execute and deliver this Agreement,. The
consummation by QDI of all transactions contemplated hereby has been duly
authorized by all requisite corporate action. This Agreement constitutes the
valid and legally binding obligation of QDI, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.
4.03 Capitalization. The authorized capital stock of QDI consists of
50,000,000 shares of $0.001 par value common stock and no other classes of
stock, common or preferred, or other securities. There are 1,925,000 shares of
common stock issued and outstanding as of December 31, 2001. All issued and
outstanding shares of common stock are duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights. Except as set forth in
Exhibit 4.03 QDI is not a party to or bound by any written or oral contract or
agreement which grants to any person an option, warrant or right of first
refusal or other right of any character to acquire at any time, or upon the
happening of any stated events, any shares of or interest in QDI, whether or not
presently authorized, issued or outstanding. Except as set forth in Exhibit
-------
4.03, there are outstanding (i) no shares of capital stock or other voting
securities of QDI, (ii) no securities of QDI or any of its subsidiaries
convertible into or exchangeable for shares of capital stock or voting
securities of QDI, (iii) no options or other rights to acquire from QDI or any
of its subsidiaries, and no obligations of QDI or any of its subsidiaries to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of QDI, and (iv) no equity
equivalents, interest in the ownership or earnings of QDI or any of its
subsidiaries or other similar rights. There are no outstanding obligations of
QDI or any of its subsidiaries to repurchase, redeem or otherwise acquire any
securities of QDI.
4.04 No Violation. Neither the execution and delivery by QDI of this
Agreement nor the consummation by QDI of the transactions contemplated hereby in
accordance with the terms hereof will: (i) conflict with or result in a breach
of any provisions of the Articles of Incorporation or Bylaws of QDI or its
subsidiaries, (ii) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or result in the termination
or in a right of termination or cancellation of, or accelerate the performance
required by, or result in the triggering of any payment or compensation under,
or result in the creation of any Lien upon any of the properties of QDI or its
subsidiaries under, or result in being declared void, voidable, or without
further binding effect, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust or any material license, franchise,
permit, lease, contract, agreement or other instrument, commitment or obligation
of which QDI or its subsidiaries is a party, or by which QDI or its subsidiaries
or any of their respective properties or assets is bound or affected, except for
any of the foregoing matters which, singularly or in the aggregate, would not
have a material adverse effect on the business, results of operations, financial
condition or prospects of QDI ("QDI Material Adverse Effect"); (iii) other than
the Regulatory filings, require any material consent, approval or authorization
of, or declaration, filing or registration with, any domestic governmental or
regulatory authority, the failure to obtain or make which would have an QDI
Material Adverse Effect, as defined in Section 7.01(c) below, or (iv) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
QDI, any of its subsidiaries or any of their assets, except for violations which
in the aggregate would not have an QDI Material Adverse Effect or materially
adversely affect the ability of QDI to consummate the Merger.
4.05 Documents. QDI has delivered to United the following
reports and/or statements:
Unaudited financial statements for the period ended December 31, 2001.
ARTICLE V
COVENANTS
5.01 Conduct of Business. From and after the date of this Agreement
until the Merger is affected or this Agreement is terminated, unless United has
consented in writing thereto, QDI, and, with respect to (e) and (f) below,
United and QDI:
(a) Shall, and shall cause its subsidiaries to, conduct its operations
according to its usual, regular and ordinary course in substantially the same
manner as heretofore conducted;
(b) Shall use reasonable efforts, and shall cause its subsidiaries to
use reasonable efforts, to preserve intact its business organization and
goodwill, keep available the services of its officers and employees and maintain
satisfactory relationships with those persons having business relationships with
it;
(c) Shall confer on a regular basis with one or more
representatives of United to report operational matters of materiality and any
proposals to engage in material transactions;
(d) Shall not amend its Articles of Incorporation or By Laws;
(e) Shall promptly notify the other parties hereto of any material
emergency or other material change in the condition (financial or otherwise),
business, properties, assets, liabilities, prospects or the normal course of its
businesses or in the operation of its properties, any material litigation or
material governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or the breach in any material
respect of any representation or warranty contained herein;
(f) Shall promptly deliver to the other parties hereto true and
correct copies of any report, statement or schedule filed with or delivered to
the SEC, any other Governmental entity (other than routine corporate tax and
other filings in the ordinary course of business) or any shareholder of QDI or
United, as the case may be, subsequent to the date of this Agreement;
(g) Shall not (i) issue, sell or pledge, or agree to issue, sell
or pledge, any shares of its capital stock, effect any stock split or otherwise
change its capitalization as it existed on the date hereof, (ii) grant, confer
or award any option, warrant, conversion, right or other right to acquire any
shares of its capital stock or grant any right to convert or exchange any
securities of QDI for Common Stock, (iii) increase any compensation or enter
into or amend any employment agreement with any of its present or future
officers or directors, other than in the ordinary course of QDI' business, (iv)
adopt any new employee benefit plan, other than in the ordinary course of QDI'
business (including any stock option, stock benefit or stock purchase plan) or
amend any existing employee benefit plan in any material respect, other than in
the ordinary course of business, except, in each case, for changes which are
less favorable to participants in such plans or as may be required by applicable
law, or (v) amend any Officer Employment Agreement or increase any compensation
payable under such Agreements to an Officer.
(h) Shall not (i) except in the normal course of business as
consistent with prior practice, declare, set aside or pay any dividend (whether
in cash, stock or property) or make any other distribution or payment with
respect to any shares of its capital stock or (ii) directly or indirectly
redeem, purchase or otherwise acquire any shares of its capital stock or make
any commitment for any such action;
(i) Shall not, and shall not permit its subsidiaries to (i) sell,
lease or otherwise dispose of any assets of QDI or its subsidiaries (including
capital stock) which are of a material amount, individually or in the aggregate,
or (ii) make any acquisition, by means of merger or otherwise, of any assets or
securities which are of a material amount, individually or in the aggregate; and
(j) Shall not, and shall not permit its subsidiaries to, agree in
writing to take or otherwise take (i) any of the foregoing actions or (ii) any
action which would make any representation or warranty of QDI herein untrue or
incorrect.
5.02 Filings; Other Action. Subject to the terms and conditions
herein provided, QDI and United shall: (i) promptly make their respective
filings and thereafter make any other required submissions to the SEC with
respect to the Merger if required; (ii) use all reasonable efforts to cooperate
with one another in (a) determining which filings are required to be made prior
to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
governmental or regulatory authorities of the United States, the several states,
and other jurisdictions in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (b)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (iii) use best efforts to take, or cause to be
taken, all other action and do, or cause to be done, all other things necessary,
proper or appropriate to consummate and make effective the transactions
contemplated by this Agreement. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purpose of this
Agreement, the proper officers and directors of United and QDI shall use best
efforts to take all such necessary action.
5.03 Due Diligence Review. From the date hereof to the Effective Time,
each of United and QDI shall allow their respective designated officers,
attorneys, accountants and other representatives, as the case may be, access at
all reasonable times to the records and files, correspondence, audits and
properties, as well as to all information relating to commitments, contracts,
titles and financial position, or otherwise pertaining to the business and
affairs of United, QDI and their subsidiaries.
For the purpose of conducting their respective due diligence
investigations, each party will make available to the other for examination and
reproduction all documents and data of every kind and character relating to this
Agreement and the transactions contemplated hereby, in possession or control of,
or subject to reasonable access by either party. All such due diligence
investigation shall be completed and each party shall notify the other in
writing of the satisfaction or removal of this due diligence review condition on
or prior to the Effective Time.
Upon mutual agreement of the parties, additional time may be allowed to
complete such due diligence investigation. Should a party ("Reviewing Party")
become aware of any information during its due diligence investigation which, in
the opinion of the Reviewing Party, could have material adverse impact on this
Agreement and/or the transactions contemplated hereby, the Reviewing Party shall
immediately notify the other party ("Receiving Party") in writing of such
information and the concerns which such information has caused. The Receiving
Party shall have a reasonable time to respond to those concerns. In the event
that the concerns cannot be resolved to the satisfaction of the Reviewing Party,
the Reviewing Party shall have the right to terminate this Agreement without
further liability hereunder. Each party shall bear the costs and expenses of
its own due diligence investigation hereunder, including the fees and expenses
of professional advisors.
5.04 Further Action. Each party hereto shall, subject to the fulfillment
at or before the Effective Time of each of the conditions of performance set
forth herein or the waiver thereof, perform such further acts and execute such
documents as may be reasonably required to effect the Merger.
5.05 Expenses. Whether or not the Merger is consummated, except as provided
in Section 7.02 hereof or as provided otherwise herein, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
5.06 Consent of QDI Shareholders. QDI shall submit the Merger to the
shareholders of the Company for their consideration in accordance with Article
92A.120 of the Nevada Revised Statues and other provisions of applicable law,
and obtain the consent of its shareholders. QDI shall notify United in writing
that the consent of the shareholders has been obtained, and shall set forth the
names of any dissenting shareholders at least one (1) day prior to the Effective
Time.
5.07 Publicity. The initial press release relating to this Agreement shall
be a joint press release and thereafter QDI and United shall, subject to their
respective legal obligations (including requirements of the Nasdaq National
Market, stock exchanges and other similar regulatory bodies), consult with each
other, and use reasonable efforts to agree upon the text of any press release,
before issuing any such press release or otherwise making public statements with
respect to the transactions contemplated hereby and in making any filings with
any federal or state governmental or regulatory agency or with Nasdaq National
Market, or any national securities exchange with respect thereto.
5.08 Best Efforts to Close. The parties hereto agree to use their best
efforts to close the transactions contemplated hereby by February 28, 2002.
ARTICLE VI
CONDITIONS TO CONSUMMATION
OF THE MERGER
6.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) This Agreement shall have been approved by the affirmative vote of
the shareholders of QDI by the requisite vote in accordance with applicable law;
(b) No statute, rule, regulation, executive order, decree, injunction or
other order (whether temporary, preliminary or permanent), shall have been
enacted, entered, promulgated or enforced by any court or governmental authority
which is in effect and has the effect of prohibiting the consummation of
the Merger; provided, however, that each of the parties shall have used its best
efforts to prevent the entry of any injunction or other order and to appeal as
promptly as possible any injunction or other order that may be entered;
(c) This Agreement shall have been approved by the Board of Directors of QDI
and the affirmative vote of the shareholders of QDI by the requisite vote
in accordance with applicable law, if required, and by the Board of Directors of
United by resolution in accordance with applicable law. Each of the consents
and resolutions shall have been obtained and set forth on Exhibits 6.01(c),
6.01(c)(i) and 6.01(c)(ii) annexed hereto.
(d) QDI, on or before the Effective Time, shall have completed the issuance
of its Convertible Debentures ("Debentures") in the face amount of $1,000,000 to
, a Colorado limited liability company, upon the terms and conditions set
forth in the Subscription Agreement and other documentation relating to the
issuance of the Debentures, and a minimum of $400,000 shall have been funded.
Subject to and upon the Effective Time of this Agreement, United agrees to
assume the liabilities and obligation to pay principal and interest on the
Debentures. On or prior to the Effective Time, QDI shall secure, in writing,
from all of the holders of the Debentures, their consent to United's assumption
of QDI's liability and obligations under the Debentures.
(e) A Consulting Agreement between United and Xxxxx X. Xxxxxx Xx. has been
executed, a copy of which is annexed to this Agreement as Exhibit 6.01(e). This
Consulting Agreement shall become an obligation of the Surviving
Corporation.
(f) A Consulting Agreement between QDI and Xxxxxxx X. Xxxxxxxxxxx has
been executed, a copy of which is annexed to this Agreement as Exhibit 6.01(f).
This Consulting Agreement shall become an obligation of the Surviving
Corporation.
(g) QDI shall deliver the legal opinion of its general counsel,
substantially in the form annexed hereto as Exhibit 6.01(g) and United shall
deliver the legal opinion of its counsel, substantially in the form annexed
hereto as Exhibit 6.01(g)(1).
(h) Each party shall have completed its due diligence review and
notified the other in writing of the satisfaction or removal of the due
diligence review condition in accordance with Article 5.03 of this Agreement.
ARTICLE VII
TERMINATION; AMENDMENT; WAIVER
7.01 Closing and Termination. Except as otherwise set forth
in this Section 7.01, this Agreement shall close by no later than 11:59 p.m.
PDT, January 31, 2002, ("Closing Date") provided that either party may extend
this Agreement for an additional seven (7) day period by written notice to the
other party prior to the Closing Date. This Agreement shall terminate if not
closed by 11:59 p.m., PDT, February 7, 2002. Notwithstanding the foregoing
and/or the approval of this Agreement by the shareholders of QDI, this Agreement
may be terminated and the Merger contemplated hereby may be abandoned at any
time prior to the Effective Time:
(a) By mutual written consent, duly authorized by their respective Boards of
Directors, by United and QDI;
(b) By either United or QDI
(i) if any court of competent jurisdiction or any other governmental
body shall have issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise permanently prohibiting the
Merger and such order, decree, ruling or other action shall have become final
and non-appealable;
(ii) if, upon a vote at a duly held meeting or upon any adjournment
thereof, the shareholders of QDI shall have failed to give any required
approvals; or
(c) By United if QDI shall have breached any of its representations and
warranties or covenants contained herein and if such breach or breaches, either
individually or in the aggregate, will have, or are reasonably likely to have,
an QDI Material Adverse Effect as defined in Section 4.04 unless, in the case of
a breach of covenant, such failure to perform has been caused by a breach of
this Agreement by United.
(d) By QDI if United shall have breached any of its representations and
warranties and such breach or breaches, either individually or in the aggregate,
will have, or are reasonably likely to have, a United Material Adverse Effect,
as defined in Section 3.04, or if United shall have breached in any material
respect any of its covenants contained herein, unless, in the case of a breach
of any covenant, such failure to perform has been caused by a breach of this
Agreement by QDI;
7.02 Effect of Termination. In the event of the termination and abandonment
of this Agreement pursuant to Section 7.01, this Agreement, except for the
obligations of the parties pursuant to this Section 7.02 and the provisions of
Section 5.05, shall forthwith become void and have no effect, without any
liability on the part of any party or its directors, officers or shareholders;
provided that nothing in this Section 7.02 shall relieve any party to this
Agreement of liability for breach of this Agreement.
7.03 Amendment. To the extent permitted by applicable law, this
Agreement may be amended by the parties, at any time before or after approval of
this Agreement and the merger by the shareholders of QDI but, after any such
shareholder approval, no amendment shall be made that by law requires further
approval of such shareholders without the approval of such shareholders. This
Agreement may not be amended except by an instrument in writing signed on behalf
of all the parties.
7.04 Extension; Waiver. At any time prior to the Effective Time, the
parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein by any other
applicable party or in any document, certificate or writing delivered pursuant
hereto by any other applicable party, or (iii) subject to the terms hereof,
waive compliance with any of the agreements or conditions of the other parties
contained herein. Any agreement on the part of any party to any such extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. The failure of a party to this Agreement to assert any of
its rights under this Agreement shall not constitute a waiver of those rights.
7.05 Procedure for Closing, Termination, Amendment, Extension or
Waiver. A termination of this Agreement pursuant to Section 7.01, an amendment
of this Agreement pursuant to Section 7.03 or an extension or waiver pursuant to
Section 7.04 shall, in order to be effective, require (a) in the case of United,
action by its Board of Directors or the duly authorized designee of its Board of
Directors and (b) in the case of QDI, action by its Board of Directors.
ARTICLE VIII
MISCELLANEOUS
8.01 Nonsurvival of Representations, Warranties and Agreements. All
representations, warranties and agreements in this Agreement or in any
instrument delivered pursuant to this Agreement shall be deemed to be only
conditions to the Merger and shall not survive the Merger, provided, however,
that the representations and warranties contained in Section 1.07, and in this
Article VIII shall survive the Merger.
8.02 Assignment, Binding Effect; Benefit; Entire Agreement. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by operation of law or otherwise)
without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
Notwithstanding anything contained in this Agreement to the contrary, nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto or their respective heirs, successors, executors,
administrators and assign any rights, remedies, obligations or liabilities under
or by reason of this Agreement. This Agreement and any documents delivered by
the parties in connection herewith constitute the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior
agreements and understandings (oral and written) among the parties with respect
thereto. No addition to or modification of any provision of this Agreement
shall be binding upon any party hereto unless made in writing and signed by all
parties hereto.
8.03 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or otherwise affecting the validity or enforceability of any of the
terms or provisions of this Agreement in any other jurisdiction. If any
provision, clause, section or port of this Agreement is so broad as to be
unenforceable, the provision, clause, section or part shall be interpreted to be
only so broad as is enforceable, and all other provisions, clauses, sections or
parts of this Agreement which can be effective without such unenforceable
provision, clause, section or part shall, nevertheless, remain in full force and
effect.
8.04 Notices. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by facsimile transmission and by courier service
(with proof of service), hand delivery or certified or registered mail (return
receipt requested and first-class postage prepaid), addressed as follows:
If to QDI, to:
Quick Draw ATM, Inc.
Xxxxxxx X. Xxxxxxxxxxx
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Fax 000-000-0000
With copy to:
Xxxx Xxxxxxx
0000 Xxxxxx Xx., #000
Xxx Xxxxxxxxx, XX 00000
Fax 000-000-0000
If to United, to:
United Xxxxxxx.Xxx
00000 XxxXxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxx, President
Fax: (000) 000-0000
With a copy to:
Xxx Xxxxxxxxxx
000 X. Xxxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Fax: (000) 000-0000
or to such other address as any party shall specify by written notice so given,
and such notice shall be deemed to have been delivered as of the date it is
telecommunicated, personally delivered or mailed.
8.05 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without regard to its rules of
conflict of laws.
8.06 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled under the Arbitration
Rules of the State of Nevada.
8.07 Descriptive Headings. The descriptive headings herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
8.08 Counterparts and Facsimile Signatures. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies of this Agreement each of which may be signed by less than all
of the parities hereto, but together all such copies shall constitute one and
the same instrument. Execution and delivery of this Agreement by exchange of
facsimile copies bearing the facsimile signature of a party hereto shall
constitute a valid and binding execution and delivery of this Agreement by such
party. Such facsimile copies shall constitute enforceable original documents.
8.09 Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings ascribed to them below:
(a) "Affiliate" of a person means a person that directly or
---------
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first-mentioned person.
(b) "Control" (including the terms "controlling", "controlled by"
-------
and "under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
person, whether through ownership of voting securities, by contract, or
otherwise.
(c) "Person" means a natural person, company, corporation,
------
partnership, joint venture, association, trust, unincorporated organization or
other entity.
(d) "Subsidiary" of any person means a person in which such first
----------
referenced person owns directly or indirectly an amount of the voting
securities, other voting ownership or voting partnership interest which is
sufficient to elect at least a majority of its Board of directors or other
governing body (or, if there are no such voting interest, owns directly or
indirectly 50% or more of the equity interest).
8.10 Waivers. Except as provided in this Agreement, no action taken
pursuant to this Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a waiver by the party
taking such action of compliance with any representations, warranties, covenants
or agreements contained in the Agreement. The waiver by any party hereto to a
breach of any provision hereunder shall not operate or be construed as a waiver
of any prior or subsequent breach of the same or any other provision hereunder.
8.11 Incorporation of Exhibits. All Exhibits and annexes attached
hereto and referred to herein are hereby incorporated herein and made a part
hereof for all purposes as if fully set forth herein.
8.12 Interpretation. In this Agreement, unless the context otherwise
requires, words describing the singular number shall include the plural and vice
versa, words denoting any gender shall include all genders and words denoting
natural persons shall include corporations and partnerships and vice versa.
The balance of this page left blank
Signature page
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officers thereunto duly authorized, all
as of the day and year first above written.
UNITED XXXXXXX.XXX
By: s/Xxxxx X. Xxxxxx
-----------------------
Xxxxx X. Xxxxxx, President and CEO
QUICK DRAW ATM, INC.
By: s/Xxxxxxx X. Xxxxxxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxxxxxx, President
LIST OF EXHIBITS
Exhibit Number Description
--------------- -----------
1.04 List of Officers & Directors
1.05 (c) Distribution of QDI Common Stock
4.03 Outstanding QDI Common Stock & Rights
6.01 (c) Resolution of Board of Directors of QDI
6.01 (c)(i) Consent of shareholders of QDI
6.01 (c)(ii) Resolution of Board of Directors of United
6.01 (e) Corporate Officer employment Agreement between United and
Xxxxx X. Xxxxxx, XX
6.01 (f) Employment Agreement between QDI and Xxxxxxx X. Xxxxxxxxxxx
6.01 (g) Legal Opinion by QDI Counsel
6.01 (g)(1) Legal Opinion by United Counsel
