AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
Aerocom Industries, Inc.
Unique Merger Sub, Inc.
Unique Mobility, Inc.
Xxxxxx X. Xxxx, Xxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx
January 16, 1998
#352586.v6, January 12, 1998 (6:58am)
TABLE OF CONTENTS
I. THE MERGER AND REORGANIZATION.................................................................................1
1.1 The Merger........................................................................................1
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1.2 Merger Consideration..............................................................................2
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1.3 Conversion of Shares..............................................................................2
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1.4 Tax Status of Reorganization......................................................................2
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1.5 Delivery of Certificates..........................................................................3
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1.6 Closing...........................................................................................3
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1.7 Articles of Incorporation and Bylaws of the Surviving Corporation.................................3
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1.8 Board of Directors and Officers...................................................................3
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1.9 Dissenters Rights.................................................................................3
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II. REPRESENTATIONS AND WARRANTIES OF
AEROCOM AND THE SHAREHOLDERS......................................................................................3
2.1 Organization......................................................................................3
2.2 Capitalization....................................................................................4
2.3 Authorization.....................................................................................4
2.4 No Violation; Consents and Approvals..............................................................4
2.5 Subsidiaries and Other Capital Stock..............................................................5
2.6 Financial Statements..............................................................................5
2.7 Absence of Undisclosed Liabilities................................................................5
2.8 Absence of Certain Changes or Events..............................................................5
2.9 Title to and Condition of Non-Real Estate Assets..................................................6
2.10 Real Property.....................................................................................6
2.11 Transactions with Affiliates......................................................................6
2.12 Trademarks and Similar Rights.....................................................................7
2.13 Insurance.........................................................................................7
2.14 Contracts and Agreements..........................................................................7
2.15 Purchase Orders...................................................................................8
2.16 Accounts Receivable...............................................................................8
2.17 Licenses and Permits..............................................................................8
2.18 Bank Accounts.....................................................................................8
2.19 Litigation........................................................................................8
2.20 Employee Compensation; Employee Matters...........................................................8
2.21 Employee Benefit Plans............................................................................9
2.22 Collective Bargaining, Employment and Non-Competition Agreements.................................11
2.23 Taxes and Tax Returns............................................................................11
2.24 Compliance with Applicable Laws..................................................................12
2.25 SEC Disclosure...................................................................................12
2.26 Inventory........................................................................................13
III. REPRESENTATIONS AND WARRANTIES OF
UNIQUE AND UNIQUE SUB.....................................................................................13
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3.1 Organization.....................................................................................13
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3.2 Capitalization...................................................................................13
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3.3 Authorization....................................................................................13
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3.4 No Violation; Consents and Approvals.............................................................14
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3.5 SEC Filings and Financial Statements.............................................................14
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3.6 Merger Stock.....................................................................................15
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3.7 Litigation.......................................................................................15
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3.8 SEC Disclosure...................................................................................15
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IV. COVENANTS OF THE SHAREHOLDERS
AND AEROCOM..............................................................................................15
4.1 Announcements and Communications.................................................................15
4.2 Notice of Certain Actions........................................................................15
4.3 No-Shop Provision................................................................................15
4.4 Conduct of Business Pending the Merger...........................................................16
4.5 Cause Conditions to be Satisfied.................................................................17
V. COVENANTS OF UNIQUE AND UNIQUE SUB...........................................................................17
5.1 Announcements and Communications.................................................................17
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5.2 Capitalization of Aerocom........................................................................17
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5.3 Buy-Back of Equipment............................................................................17
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5.4 Cause Conditions to be Satisfied.................................................................18
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VI. UNIQUE COMMON STOCK - REGISTRATION RIGHTS...................................................................18
6.1 Unique Common Stock to be Issued.................................................................18
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6.2 Restrictive Legend...............................................................................18
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6.3 Information......................................................................................18
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6.4 Registration Rights..............................................................................19
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6.5 Post-Effective Matters...........................................................................20
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6.6 Additional Governmental Approval.................................................................21
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6.7 Registration Expenses............................................................................21
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VII. UNIQUE DUE DILIGENCE.......................................................................................21
7.1 Unique Due Diligence.............................................................................21
7.2 Supplemental Disclosure..........................................................................22
VIII. CONDITIONS PRECEDENT......................................................................................22
8.1 Conditions Precedent to Unique's and Unique Sub's Obligations....................................22
8.2 Conditions Precedent to Aerocom's and the Shareholders' Obligations..............................23
IX. DOCUMENTS TO BE DELIVERED AT CLOSING........................................................................24
9.1 Documents to be Delivered by Aerocom or the Shareholders at the
Closing........................................................................................24
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9.2 Documents to be Delivered by Unique and Unique Sub at the Closing................................25
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X. INDEMNIFICATION..............................................................................................25
10.1 Survival of Representations and Warranties.......................................................25
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10.2 Indemnification..................................................................................26
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10.3 Escrowed Shares; Indemnification Offsets.........................................................26
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10.4 Indemnification Procedure; Arbitration...........................................................26
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10.5 Escrow Not to Limit Indemnification..............................................................27
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XI. CERTAIN AGREEMENTS..........................................................................................28
11.1 Confidential Information.........................................................................28
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11.2 Liability for Events Prior to the Closing Date...................................................28
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11.3 Preparation of Registration Statement............................................................28
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11.4 Destruction of Assets............................................................................29
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11.5 Termination......................................................................................29
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11.6 Tax Compliance; Final Tax Return.................................................................30
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11.7 Assignment of Name...............................................................................30
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XII. MISCELLANEOUS..............................................................................................30
12.1 Expenses.........................................................................................30
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12.2 Notices..........................................................................................30
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12.3 Entire Agreement.................................................................................31
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12.4 Headings.........................................................................................31
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12.5 Successors in Interest...........................................................................31
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12.6 Counterparts.....................................................................................31
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12.7 Governing Law....................................................................................32
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12.8 Brokerage........................................................................................32
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12.9 Waiver...........................................................................................32
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12.10 Remedies for Breach; Specific Performance........................................................32
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12.11 Construction.....................................................................................32
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION, dated as of January
16, 1998 (the "Agreement"), is made and entered into by and among Unique
Mobility, Inc., a Colorado corporation ("Unique"), Unique Merger Sub, Inc., a
Colorado corporation and a subsidiary of Unique ("Unique Sub"), Aerocom
Industries, Inc., a Colorado corporation ("Aerocom"), (Aerocom and Unique Sub
being hereinafter sometimes referred to as the "Constituent Corporations"), and
Xxxxxx X. Xxxx ("Lang"), Xxxxx X. Xxxxxx ("Buschy"), Xxxxxx X. Xxxxxxx and Xxxx
X. Xxxxxx (the "Shareholders").
Whereas, the Shareholders together own 100% of the issued and outstanding
capital stock of Aerocom;
WHEREAS, the Boards of Directors of each of Unique, Aerocom and Unique
Sub have approved the proposed merger, on the terms and conditions set forth in
this Agreement, whereby Unique Sub shall merge with and into Aerocom (the
"Merger") and the Shareholders will exchange their shares of common stock of
Aerocom (the "Aerocom Common Stock"), for shares of common stock of Unique (the
"Unique Common Stock"); and
WHEREAS, the parties' obligations under this Agreement are conditioned
upon the Merger being declared effective by the Secretary of State of the State
of Colorado;
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein contained, the parties hereto agree as follows:
I. THE MERGER AND REORGANIZATION
1.1 The Merger. Subject to the terms and conditions of this Agreement
and the Articles of Merger, Unique Sub shall be merged with and into Aerocom,
the separate existence of Unique Sub shall cease, and Aerocom shall be the
surviving corporation of the Merger (hereinafter sometimes referred to as the
"Surviving Corporation") and shall continue its corporate existence under the
laws of the State of Colorado. The Merger shall be consummated when a properly
executed and certified copy of Articles of Merger is filed in accordance with
the Colorado Business Corporation Act (the "CBCA") with the Secretary of State
of the State of Colorado and the Secretary of State issues a Certificate of
Merger (hereinafter the "Effective Time"). From and after the Effective Time,
the Surviving Corporation shall possess all of the rights, privileges, powers
and franchises of a public as well as of a private nature, and shall be subject
to all the restrictions, disabilities and duties of each of the Constituent
Corporations, all as set forth in Sections 0-000-000 et seq. of the CBCA.
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1.2 Merger Consideration. (a) In consideration for the Merger, the
shareholders of Aerocom (the "Shareholders") shall receive the "Purchase Price"
(as defined below). The Purchase Price shall be $3,999,000 plus (i) the book
value of Aerocom's current assets as of January 1, 1998 minus (ii) the book
value of Aerocom's current liabilities and long-term debt as of January 1, 1998.
The Shareholders shall receive 10% of the Purchase Price on the Effective Date
in immediately available funds and the balance shall be paid on the Effective
Date in the form of Unique Common Stock. The number of shares of Unique Common
Stock to be delivered shall be based upon a price of $8.18 per share of Unique
Common Stock. 10% of the shares of the Unique Common Stock that is due to each
Shareholder at the Effective Date shall be delivered to Norwest Investment
Management & Trust as escrow agent (the "Escrow Agent") with assignments
executed in blank to be held pursuant to the Escrow Agreement in the form
attached hereto as Exhibit 1.2 (the "Escrow Shares").
(b) Aerocom has estimated the Purchase Price to be $3,377,020 (the
"Estimated Purchase Price"). The computation of the actual Purchase Price shall
initially be made by Lang and delivered to Unique within 45 days after the
Effective Date along with all accountants' work papers and similar documentation
used in making such determination. If Unique objects to the computation of the
Purchase Price as of the Effective Date made by Lang, then Unique shall notify
Lang of such objection within ten days of receipt of such computation. If the
parties cannot resolve such objections within 30 days of such notification by
Unique, then Unique and Lang shall jointly select an accountant or accounting
firm to resolve such matters which may, if Unique in its reasonable
determination believes to be necessary, undertake an audit of Aerocom. The
decision of such accounting firm shall be binding upon Aerocom, Unique and the
Shareholders. If the accountant or accounting firm selected determines that the
actual Purchase Price on the Effective Date has decreased by five percent or
more from that initially determined by Lang, then the Shareholders shall pay the
fees and disbursements of such accounting firm. In all other instances the fees
and expenses of such firm shall be paid by Unique.
(c) The number of shares of Unique Common Stock issued to the Shareholders
upon the Merger shall be adjusted accordingly in the event a stock split, stock
dividend or similar event becomes effective between the date of this Agreement
and the Effective Date.
1.3 Conversion of Shares. As specified in the Articles of Merger, upon
effectiveness of the Merger, by virtue of the Merger and without any further
action on the part of any of Unique, Unique Sub, Aerocom, or the Shareholders,
all of the outstanding shares of Aerocom Common Stock shall be converted into
the Purchase Price. Each outstanding share of Unique Sub capital stock shall be
converted into one share of the Surviving Corporation. Fractional shares shall
be rounded to the nearest whole number in an effort to equitably account for
otherwise fractional shares. No fractional shares or cash in lieu of fractional
shares will be issued.
1.4 Tax Status of Reorganization. The parties intend that the Merger
shall constitute a tax-free reorganization within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as
amended (the "Code"),except to the extent of the cash portion of the Purchase
Price.
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1.5 Delivery of Certificates. On the Effective Date, the Shareholders shall
surrender all certificates representing the Aerocom Common Stock to Unique.
1.6 Closing. Subject to the provisions of this Agreement, the closing
(the "Closing") of the transactions contemplated by this Agreement shall take
place at the offices of Holme Xxxxxxx & Xxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxx on January 16, 1998 at 3:00 p.m., or at such other time,
place or date as Unique, Unique Sub, the Shareholders and Aerocom may mutually
agree; provided, however, that if a condition to the Closing set forth in
Article VIII shall not have been fulfilled or waived at such time, any party
hereto entitled to the benefits of such condition may postpone the Closing by
notice to the other parties until such condition or conditions shall have been
met or waived, except that in no event shall the Closing occur after January 31,
1998, unless the parties otherwise agree in writing. The date and time of such
Closing are herein referred to as the "Closing Date." Concurrently with the
Closing, the Articles of Merger shall be filed with the Secretary of State of
the State of Colorado. Closing shall be conditioned upon the effectiveness of
the Merger.
1.7 Articles of Incorporation and Bylaws of the Surviving Corporation.
The Articles of Incorporation and Bylaws of Aerocom, as in effect immediately
prior to the Effective Time, shall be the Articles of Incorporation and Bylaws
of the Surviving Corporation, until thereafter changed or amended as provided
therein or by law.
1.8 Board of Directors and Officers. The directors and officers of
Unique Sub immediately prior to the Merger shall be the initial directors and
officers of the Surviving Corporation. Each of such directors and officers is to
hold office, subject to the applicable provisions of the Articles of
Incorporation and Bylaws of the Surviving Corporation, until his or her
successors are duly elected and qualified, or upon his or her earlier death,
resignation or removal. The Surviving Corporation may add such additional
officers and directors on or after the Closing Date as it shall see fit.
1.9 Dissenters Rights. Each Shareholder hereby waives any and all rights to
dissent from the Merger pursuant to the provisions of Section 0-000-000 et seq.,
a copy of which is attached hereto as Exhibit B.
II. REPRESENTATIONS AND WARRANTIES OF
AEROCOM AND THE SHAREHOLDERS
Aerocom and the Shareholders, jointly and severally, covenant,
represent and warrant with and to Unique, its successors and assigns, as
follows:
2.1 Organization. Aerocom (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado, (ii) has
full corporate power and authority to own, lease and operate all of its
properties and assets and to carry on its business as it is now being conducted,
(iii) is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of its properties or the nature of its business
makes such qualification necessary, and all such jurisdictions are listed in
Section 2.1 of the disclosure
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schedule delivered by Aerocom and the Shareholders to Unique and Unique Sub (the
"Disclosure Schedule"), and (iv) is in good standing in each jurisdiction in
which it is qualified to do business. The minute books of Aerocom made available
to Unique for review contain complete and accurate records of all meetings and
other corporate actions held or taken of Aerocom's Board of Directors, the
committees thereof, and the Shareholders. All actions reflected in said books
were duly and validly taken in compliance with the laws of the applicable
jurisdiction.
2.2 Capitalization. The authorized capital stock of Aerocom and the
number of such shares which are issued and outstanding and which are owned by
the Shareholders or others are as set forth on Section 2.2 of the Disclosure
Schedule. All issued and outstanding shares of Aerocom's capital stock have been
duly and validly issued and are fully paid and nonassessable, free of any claim
of preemptive rights, and no shares are held in treasury. There are no
outstanding rights to purchase or receive, or options, warrants, puts, calls,
contracts, commitments or demands of any character relating to Aerocom's
authorized or issued capital stock or which could require the issuance of
capital stock by Aerocom. There are no voting trusts or other agreements or
understandings to which Aerocom is a party with respect to the voting of the
capital stock of Aerocom.
2.3 Authorization. This Agreement and the Articles of Merger, the
execution and delivery hereof and thereof by Aerocom, the Merger and the
performance by Aerocom of its obligations and undertakings referenced herein and
under the Articles of Merger, have been duly authorized and approved by the
Shareholders and Board of Directors of Aerocom. The officers executing this
Agreement on behalf of Aerocom have authority to do so and upon execution this
Agreement by such officers and the Shareholders, this Agreement shall be the
valid and binding obligation of Aerocom and the Shareholders.
2.4 No Violation; Consents and Approvals. Except as set forth in
Section 2.4 of the Disclosure Schedule, neither the execution and delivery of
this Agreement and the Articles of Merger by Aerocom, nor the consummation of
the transactions contemplated hereby and thereby, will conflict with, result in
a breach of, permit any party to terminate or accelerate the provisions of, or
result in the imposition of any lien, encumbrance or restriction upon the
property or assets of Aerocom under (i) the provisions of the Articles of
Incorporation or the Bylaws of Aerocom, (ii) the provisions of any obligation,
indenture, agreement, permit or other instrument to which Aerocom is a party or
which Aerocom holds, or (iii) any statute or law or any order, decree, judgment,
rule or regulation of any court or governmental agency or authority having
jurisdiction over Aerocom. Except for (i) filing and recordation of the Articles
of Merger and such other appropriate merger documents as may be required by the
CBCA, and (ii) any filings required in connection with the issuance of the
shares of Unique Common Stock, no permit, consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority or other person (either governmental or private) is necessary in
connection with the execution and delivery by Aerocom or the Shareholders of
this Agreement and the Articles of Merger or the consummation by them of the
transactions contemplated hereby and thereby.
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2.5 Subsidiaries and Other Capital Stock. Aerocom does not have any
subsidiaries. As used herein, the term "subsidiaries" means any corporation or
other entity in which Aerocom is entitled by virtue of its ownership of
securities (or equivalent interests) to elect a majority of the directors (or
persons performing equivalent functions). Except as disclosed in Section 2.5 of
the Disclosure Schedule, Aerocom does not own, directly or indirectly, any
capital stock or other equity securities of any corporation or have any direct
or indirect equity or ownership interest in any other business. Except as
disclosed in Section 2.5 of the Disclosure Schedule, all capital stock or other
equity securities of any corporation owned, directly or indirectly, by Aerocom,
is owned free and clear of all liens, options, encumbrances, pledges, security
interests, claims or charges of any kind, and are validly issued, fully paid and
nonassessable, with no personal liability attaching to the ownership thereof,
and there are no outstanding options, rights or agreements of any kind relating
to the sale or transfer of any such capital stock or other equity securities.
2.6 Financial Statements.
(a) Section 2.6 of the Disclosure Schedule sets forth true and correct
copies of the reviewed balance sheet and income statement of Aerocom for the
years ended December 31, 1996 and 1995 and the unaudited balance sheet and
income statement of Aerocom for the year months ended December 31, 1997. The
foregoing Financial Statements and income statements are collectively referred
to herein as the "Financial Statements."
(b) The Financial Statements have been prepared from the books and records
of Aerocom as, at and for the periods indicated and have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods indicated, and present fairly the financial position of
Aerocom, and the results of its operations, as, at and for the periods
indicated. Aerocom has in its possession, and will deliver to Unique upon
request, all supporting documentation and work papers relating to the Financial
Statements to permit Unique to restate its financial statements if required.
2.7 Absence of Undisclosed Liabilities. Except to the extent shown on
the Financial Statements or in Section 2.7 of the Disclosure Schedule, as of
December 31, 1997 Aerocom did not have any liabilities or obligations of any
nature, whether accrued, absolute, contingent or otherwise.
2.8 Absence of Certain Changes or Events. Except as set forth on
Section 2.8 of the Disclosure Schedule, since January 1, 1997, there has not
been (a) any adverse change in the business, properties, assets, financial
condition or results of operation which would be material to Aerocom; (b) any
damage, destruction or loss, whether covered by insurance or not, materially and
adversely affecting the properties or business of Aerocom; (c) any declaration,
setting aside or payment of any dividend (whether in cash, stock or property) in
respect of Aerocom Common Stock, or any redemption or other acquisition of such
stock by Aerocom; (d) any increase in the compensation payable or to become
payable by Aerocom to its officers or key employees, or any material increase in
any bonus, insurance, pension or other employee benefit plan, payment or
arrangement made to, for or with any such officers or key employees; (e) any
labor or employee
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dispute involving Aerocom, other than routine matters, none of which is
material; (f) any borrowing or lending of money or guarantee of any obligation
by Aerocom; (g) any adoption, amendment or termination of any employee benefit
plan or arrangement of Aerocom; (h) any disposition of any material properties
or assets used in the business of Aerocom other than sales of inventory in the
ordinary course of its business; (i) any engagement by Aerocom in activities
outside the ordinary course of its business; (j) the incurring of any liability
of Aerocom (whether absolute or contingent) except liabilities which were
incurred in the ordinary course of business; (k) any changes in Aerocom's
distribution system or changes in inventory policy; (l) any change in the
general pricing policy of Aerocom for its services or any general price increase
charged for Aerocom's goods and services; or (m) any agreement (whether oral or
written) to do any of the foregoing.
2.9 Title to and Condition of Non-Real Estate Assets. Except for such
assets as have been disposed of in the ordinary conduct of Aerocom's business,
Aerocom has good and marketable title to, or valid leasehold interests in, all
non-real estate assets reflected on the Financial Statements or acquired by it
after December 31, 1997, free and clear of all liens, claims, mortgages,
charges, easements or other encumbrances of any kind whatsoever except: (i) to
the extent reflected or reserved against on the Financial Statements, or (ii)
for liens for property taxes not yet due. All the fixed assets reflected on the
Financial Statements, and those assets acquired since the date thereof, and not
disposed of as permitted hereunder, constitute all the fixed assets now used by
Aerocom and necessary to conduct its business as it is being conducted on the
date hereof and all leases of such fixed assets will, at the Closing, be in full
force and effect. To the best of the Shareholders' knowledge, all such fixed
assets, including all mechanical and component parts thereof, are in good
working condition, have been and will be properly maintained, and are not in
need of repair or replacement. All items of inventory are in good condition and
consist of items of a quality and quantity usable in the ordinary course of
Aerocom's business. The amount of inventory is sufficient in quality and
quantity to operate the business of Aerocom in the ordinary course. Aerocom
shall deliver to Unique prior to Closing a computer-generated fixed asset
register which will list all items of machinery, equipment and similar property
(including vehicles) owned by Aerocom on the Closing Date.
2.10 Real Property. Each parcel of real property owned by Aerocom,
including the legal description and address thereof, is listed on Section 2.10
of the Disclosure Schedule, and copies of all deeds, purchase documents,
mortgages, other encumbrances and title insurance policies or lawyer's title
opinions relating to such parcels have been provided to Unique. Aerocom has good
and marketable title to such real property, and such real property is subject
only to normal easements and restrictions that do not interfere with Aerocom's
use and currently intended future use of the real estate. Section 2.10 of the
Disclosure Schedule also lists all leases for real estate to which Aerocom is a
party. Copies of all such leases have been delivered to Unique. Aerocom is not
in default and no event of default has occurred under any such lease. No consent
to the Merger or the consummation of the transactions contemplated hereby is
required by the terms of any such lease.
2.11 Transactions with Affiliates. Except as set forth in Section 2.11 of
the Disclosure Schedule and except for compensation or other customary employee
benefits
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6
provided in the ordinary course of business, since December 31, 1997, Aerocom
has not entered into or been a party to any transaction which provided for
payment to or from, or the transfer of, any Company property to or from any
Shareholder, any director, officer or other employee of Aerocom, any member of
the family of any such person or any corporation, partnership, trust or other
entity in which any such person has an ownership interest or is an officer,
director, partner or trustee.
2.12 Trademarks and Similar Rights. Section 2.12 of the Disclosure
Schedule sets forth (a) all patents and patent applications, registered
copyrights and copyright registration applications, registered trademarks and
trademark registration applications, and registered trade names and trade name
registration applications, owned in whole or in part by Aerocom and used in the
conduct of its business, and (b) all licenses from third parties under which
Aerocom has been given the right to use any of the foregoing in the conduct of
its business. Except as indicated in Section 2.12 of the Disclosure Schedule,
neither the validity of, nor Aerocom's rights under, any of the items listed
therein, is being questioned or contested by others.
2.13 Insurance. Section 2.13 of the Disclosure Schedule sets forth all
insurance contracts in force with respect to Aerocom and its property, copies of
which have previously been made available to Unique; all such insurance
contracts are in full force and effect and will continue to be renewed and/or
maintained so as to be in full force and effect at the Closing. Aerocom will
notify Unique if any policies contain cancellation penalties or similar
penalties upon cancellation.
2.14 Contracts and Agreements. Section 2.14 of the Disclosure Schedule
sets forth a description of (a) all contracts and agreements (whether written or
oral) and all amendments thereto or modifications thereof to which Aerocom is a
party or by which it is bound which involve future payments by or to Aerocom of
$50,000 or more other than contracts which are terminable by Aerocom upon 30
days or less notice without cost or expense to Aerocom and (b) all notes,
mortgages, pledges, deeds of trust, security, loan or credit agreements and
similar instruments or arrangements to which Aerocom is a party or by which it
is bound and all amendments or modifications thereof (collectively (a) and (b),
referred to as the "Contracts"), together in each case with copies of all such
agreements, contracts and other instruments as Unique may reasonably request.
Except as set forth in Section 2.14 of the Disclosure Schedule:
(i) each Contract is a valid and binding agreement of
Aerocom and, to the best of each Shareholder's and Aerocom's knowledge,
is a valid and binding agreement of the other parties thereto; and
(ii) Aerocom has fulfilled all obligations required
pursuant to each Contract to have been performed by Aerocom on its part
prior to the date hereof, and Aerocom has no reason to believe that it
will not be able to fulfill, when due, all of its obligations under the
Contracts which remain to be performed after the date hereof; and
(iii) there has not occurred any default under any Contract on the part of
Aerocom; Aerocom has no knowledge that any default under any Contract on the
part of
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7
the other parties thereto has occurred; and Aerocom has no knowledge
that any event has occurred which with the giving of notice or the
lapse of time, or both, would constitute any default under any of the
Contracts.
2.15 Purchase Orders. Aerocom does not have, and will not have at Closing,
any written or oral purchase order or purchase commitment in excess of the
normal, ordinary and usual requirements of its business or at any excessive
price.
2.16 Accounts Receivable. A complete list of all accounts, notes and
other receivables of Aerocom as of December 31, 1997 and the aging thereof has
been separately delivered to Unique. All such accounts receivable and those
arising from December 31, 1997 through the Closing, arose in the ordinary course
of business and no entitlement to or claims of offset or reduction have been
made or exist and, subject to any allowance for doubtful accounts set forth on
the Financial Statements, all such accounts are fully collectible without offset
or compromise within 90 days of Closing except as otherwise disclosed in Section
2.16 of the Disclosure Schedule.
2.17 Licenses and Permits. Section 2.17 of the Disclosure Schedule sets
forth a list of, by facility location, and Aerocom is in possession of, all
licenses, permits and authorizations required for the conduct of Aerocom's
business (the "Permits"), and the Permits are valid and in full force and
effect. Except as set forth in Section 2.17 of the Disclosure Schedule, Aerocom
is in compliance with all conditions or requirements imposed by or in connection
with the Permits and with respect to the conduct of its business and Aerocom has
not received notice and Aerocom does not have any knowledge or reason to believe
that any authority intends to cancel, terminate or modify any of the Permits or
adopt or modify rules and regulations which would adversely affect the Permits.
2.18 Bank Accounts. Section 2.18 of the Disclosure Schedule sets forth
the name and address of each bank in which Aerocom has an account or safety
deposit box, the designation of such account and the names of all persons
authorized to draw thereon or enter therein, as may be the case.
2.19 Litigation. Section 2.19 of the Disclosure Schedule sets forth any
and all actions, suits, claims, proceedings, investigations or inspections
pending or threatened against or affecting Aerocom or any of its properties or
rights in any court or before any governmental authority.
2.20 Employee Compensation; Employee Matters. Section 2.20 of the
Disclosure Schedule sets forth, by facility location, the names, positions,
dates of hire and current compensation, including bonuses and customary
commissions, of all present officers and employees of Aerocom whose annual
compensation was $30,000 or more in calendar year 1997 or if not employed
throughout 1997, is expected to exceed $30,000 in calendar year 1998.
Except as set forth in Section 2.20 of the Disclosure Schedule:
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8
(a) Aerocom is in compliance with all federal and state laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours, and is not engaged in any unfair labor practices.
(b) All obligations of Aerocom, whether arising by operation of law, by
contract or by past custom, for payments by Aerocom directly to its employees or
to trusts or other funds or to any governmental agency, for employment
compensation benefits, workers compensation benefits, accident, sickness and
disability benefits, pension, profit sharing and any other retirement benefits,
social security benefits, vacation and holiday pay, bonuses and other forms of
compensation, or any other benefits, have been paid or adequate accruals
therefor have been made on the Financial Statements or, with respect to accruals
required from December 31, 1997 through the Closing, have been made in
accordance with Aerocom's normal accounting procedures and in compliance with
generally accepted accounting principles, consistently applied.
2.21 Employee Benefit Plans
(a) Except for the plans and arrangements set forth in Section 2.21 of the
Disclosure Schedule (the "Scheduled Plans"), neither Aerocom nor any member of
the Controlled Group now maintains, has ever maintained or contributed to, or
has any plans or commitments for, any employee benefit plans (as such term is
defined in section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) or any other retirement, pension, stock option, stock
appreciation right, profit sharing, incentive compensation, deferred
compensation, savings, thrift, vacation pay, severance pay, or other employee
compensation or benefit plan, agreement, practice, or arrangement, whether
written or unwritten, whether or not legally binding (collectively, the
"Plans"). For purposes of this Agreement, "Controlled Group" means a controlled
or affiliated group within the meaning of Code ss. 414(b), (c), (m), or (o) of
which Aerocom is a member. Aerocom has delivered to Unique correct and complete
copies of all Scheduled Plans (including a detailed written description of any
Scheduled Plan that is unwritten, including a description of eligibility
criteria, participation, vesting, benefits, funding arrangements and assets and
any other provisions relating to Aerocom) and, with respect to each Scheduled
Plan, a copy of each of the following: (i) the most recent favorable
determination letter, (ii) materials submitted to the Internal Revenue Service
in support of a pending determination letter request, (iii) the most recent
letter issued by the Internal Revenue Service recognizing tax exemption, (iv)
each insurance contract, trust agreement, or other funding vehicle, (v) the
three most recently filed Forms 5500 plus all schedules and attachments, and
(vi) each summary plan description or other general explanation or communication
distributed or otherwise provided to employees with respect to each Scheduled
Plan that describes the terms of the Scheduled Plan.
(b) Each Scheduled Plan has at all times been in compliance, in form and in
operation, in all material respects with all applicable requirements of law and
regulations, including without limitation ERISA. Each Scheduled Plan that is
intended to be a qualified plan has received a favorable determination letter
from the Internal Revenue Service; nothing has occurred since the date of the
most recent favorable determination letter that would cause the loss
#352586.v6, January 12, 1998 (6:58am)
9
of the Scheduled Plan's qualification; and each such Scheduled Plan has at all
times been in compliance, in form and in operation, in all material respects
with the applicable requirements of the Internal Revenue Code and the applicable
Treasury Regulations.
(c) Neither Aerocom nor any party in interest (as such term is defined in
ERISA ss. 3(14)) nor any disqualified person (as such term is defined in Code
ss. 4975) has engaged in any prohibited transaction within the meaning of ERISA
ss. 406 or Code ss. 4975 that would subject Aerocom to any liability.
(d) All contributions to Scheduled Plans for all periods ending prior to
the Closing Date (including periods from the first day of the current plan year
to the Closing Date) will be made prior to the Closing Date by Aerocom in
accordance with past practice and the recommended contribution in the applicable
actuarial report.
(e) All insurance premiums with respect to each Scheduled Plan have been
paid in full, subject only to normal retrospective adjustments in the ordinary
course for policy years or other applicable policy periods ending on or before
the Closing Date.
(f) Neither Aerocom nor any member of the Controlled Group, nor any of
their respective directors, officers, employees, or other fiduciary (as such
term is defined in ERISA ss. 3(21)) has any liability for failure to comply with
ERISA or the Code for any action or failure to act in connection with the
administration or investment of any Scheduled Plan.
(g) Neither Aerocom nor any member of the Controlled Group has ever
maintained, contributed to, or been obligated to contribute to any plan that is
subject to Title IV of ERISA or the minimum funding requirements of Code ss.
412. Neither Aerocom nor any member of the Controlled Group has ever contributed
to, been obligated to contribute to, or incurred any liability to a
multiemployer plan (as such term is defined in ERISA ss. 3(37)).
(h) With respect to each Scheduled Plan and Plan, there are no actions,
suits, grievances, arbitrations or other manner of litigation, or claim with
respect to any Scheduled Plan (except for routine claims for benefits made in
the ordinary course of plan administration for which plan administrative
procedures have not been exhausted) pending, threatened or imminent against or
with respect to any Scheduled Plan or Plan, any plan sponsor, or any fiduciary
(as such term is defined in ERISA ss. 3(21)) of such Scheduled Plan or Plan, and
Aerocom has no knowledge of any facts that could give rise to any action, suit,
grievance, arbitration or other manner of litigation, or action.
(i) Neither Aerocom nor any member of the Controlled Group has any
liability for post-retirement welfare benefits except for the continuation
coverage required by Code ss. 4980B.
(j) The consummation of the transactions contemplated by this Agreement
will not result in any "excess parachute payments" within the meaning of Code
ss. 280G.
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10
(k) No Plan provides retiree medical or retiree life insurance benefits to
any person and Aerocom is not contractually or otherwise obligated (whether or
not in writing) to provide any person with life insurance or medical benefits
upon retirement or termination of employment, other than as required by the
provisions of Sections 601 through 608 of ERISA and Section 4980B of the Code.
(l) Aerocom and the members of the Controlled Group have complied with the
continuation coverage requirements of Sections 601 through 608 of ERISA and
Section 4980B of the Code.
2.22 Collective Bargaining, Employment and Non-Competition Agreements.
Aerocom is not a party to any collective bargaining or similar labor agreement.
Section 2.22 of the Disclosure Schedule sets forth (i) all consulting agreements
to which Aerocom is a party and (ii) all employment, non-competition and
compensation agreements (whether written or oral) with officers or other
employees of Aerocom, together with a copy, or in the case of any oral
agreement, a summary, of each such agreement. If a form employment or
non-competition agreement is used, a copy of such form need only be included
with a list of all such employees which have signed such form. Except as set
forth in Section 2.22 of the Disclosure Schedule, all employees of Aerocom who
customarily have direct contact with Company customers (including all officers,
general managers, sales persons, drivers and distributors), have executed
written non-competition agreements or employment agreements containing
non-competition covenants in one of the forms attached hereto to Section 2.22.
Except as set forth in such Section 2.22 of the Disclosure Schedule, there exist
no labor grievances or other material problems involving labor relations of
Aerocom which have not been fully satisfied or discharged. Neither Aerocom nor
any Shareholder knows of any organizational effort to have any labor
organization certified by Aerocom.
2.23 Taxes and Tax Returns. Aerocom through the date of this Agreement
has duly and timely filed all federal, state and local (United States and all
foreign jurisdictions) tax returns required to be filed by it (unless a valid
extension therefore has been granted), and all such returns are, or will be when
filed, true, complete and correct in all material respects. Aerocom has duly and
timely paid or made adequate provision for the payment of all taxes, assessments
and other governmental charges which have been incurred as set forth in the
aforementioned tax returns or are otherwise due and payable. All sales taxes
required to be collected and remitted by Aerocom have been properly collected
and remitted. All necessary sales tax exemption certificates have been obtained
by Aerocom and all such certificates have been properly completed and
maintained. No tax return filed by Aerocom is under audit or examination by any
taxing authority and there are no applications or agreements for the extension
of the time for the filing of any tax return or for the assessment of any
amounts of tax nor any consent to an extension of the period of limitations
applicable to such assessment or to the collection of any tax. No issue or
issues have been raised in connection with any prior or pending inquiry into, or
audit of, any tax filings of Aerocom which may be expected to be raised in the
future by such taxing authorities and no facts exist or have existed which would
constitute grounds for the assessment of any further tax liabilities, which
individually or in the aggregate are material with respect to the periods which
have not been examined by the IRS. Aerocom has made available to
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11
Unique true and complete copies of all federal, state and local (United States
and foreign) income tax returns for each of the past three years as set forth in
Section 2.23 of the Disclosure Schedule which it has filed together with copies
of all schedules, work papers, elections, tax depreciation schedules and other
documents which were used in the preparation of each such tax return. There are
no liens for taxes upon the assets of Aerocom except for liens for taxes not yet
due. As used herein, "taxes" mean (a) all net income, gross income, gross
receipts, sales, use, transfer, franchise, profits, withholding, payroll,
employment, excise, severance, property or windfall profits taxes, or other
taxes of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority (domestic
or foreign) upon Aerocom with respect to all periods or portions thereof ending
on or before the Effective Time and/or (b) any liability of Aerocom for the
payment of any amounts of the type described in the immediately preceding clause
(a) as a result of being a member of an affiliated or combined group.
2.24 Compliance with Applicable Laws. Except as set forth in Section
2.24 of the Disclosure Schedule, Aerocom is conducting and has conducted its
business so as to comply with all applicable laws, ordinances, regulations,
decrees and orders, of any governmental entity, including without limitation all
city, county, state and Federal statutes, laws, regulations and ordinances
applicable to air or water pollution, environmental protection, soil
contamination, hazardous substances (as defined in any of the following statutes
which shall be deemed to include, without limitation, asbestos and PCBs),
hazardous waste generation, transportation, storage and disposal or other
environmental matters including the Resource, Conservation and Recovery Act of
1976, the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (CERCLA), the Clean Air Act, the Toxic Substances Control Act, the
Federal Water Pollution Control Act, the Federal Hazardous Substances Act, the
Solid Waste Disposal Act and other similar and related Federal and state laws
and regulations regulating the protection of the environment, all as amended,
compliance with the National Labor Relations Act as amended, the Welfare and
Pension Plans Disclosure Act, the Fair Labor Standards Act and Equal Pay Act,
Title 7 of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, the Occupational Safety and Health Act of 1970, the Americans With
Disabilities Act of 1990, and the Employees Retirement Income Security Act of
1974, and any other law, ordinance, regulation, decree or order, the failure to
comply with which might have a material adverse effect on the financial
condition, business, properties, reputation, results of operations or prospects
of Aerocom, Unique and Unique Sub. None of the real property or assets of
Aerocom have been used for hazardous waste storage or disposal or have been
contaminated by hazardous waste (as defined in the Resource Conservation and
Recovery Act, or applicable state law) or hazardous substances (as defined in
ss. 101(14), 42 U.S.C. ss. 9601(14), of CERCLA) and neither Aerocom's operations
nor assets have contaminated the lands or waters of others with hazardous waste
or hazardous substances. All underground or above-ground storage tanks contained
on or under real estate used by Aerocom is described in Section 2.24 of the
Disclosure Schedule. All such tanks are registered, were installed pursuant to
existing laws and regulations at the time of such installation, and are at this
date in full compliance with all applicable rules and regulations.
2.25 SEC Disclosure. None of the information supplied or to be supplied by
Aerocom for use in the Registration Statement (later defined), including
Aerocom's SEC (later
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12
defined) materials, contains any untrue statements of a material fact or omits
to state all material facts which are necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
misleading. As used in this Agreement, the term "Registration Statement" shall
mean the registration statement referred to in Section 6.4 hereof or as it
finally is effective. "SEC" refers to the Securities Exchange Commission.
Aerocom's "SEC materials" consists of the information furnished by Aerocom for
inclusion in the Registration Statement.
2.26 Inventory. None on the inventory reflected in the Financial Statements
is obsolete or not saleable.
III. REPRESENTATIONS AND WARRANTIES OF
UNIQUE AND UNIQUE SUB
Unique and Unique Sub jointly and severally covenant, represent and
warrant with and to Aerocom and to the Shareholders, their heirs, successors or
assigns, as follows:
3.1 Organization. Unique is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado and duly
authorized under its Articles of Incorporation and under applicable laws to
engage in the business conducted by it. Unique Sub is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Colorado and is duly authorized under its Articles of Incorporation and under
applicable laws to engage in the business conducted by it.
3.2 Capitalization. The authorized capital stock of Unique consists of
50,000,000 shares of Unique Common Stock, 14,222,970 of which were issued and
outstanding on January 5, 1998. The authorized capital stock of Unique Sub
consists of 10,000 shares of Unique Common Stock, 1,000 of which were issued and
outstanding on January 15, 1998. All issued and outstanding shares of Unique
Common Stock and Unique Sub's capital stock have been duly and validly issued
and are fully paid and non-assessable and free of any claim of pre-emptive
rights. Except as disclosed in filings with the SEC or as otherwise disclosed to
the Shareholders, there are no outstanding rights to purchase or receive, or
options, warrants, puts, calls, contracts, commitments or demands of any
character relating to the authorized or issued capital stock of Unique or Unique
Sub or which could require the issuance of capital stock by Unique or Unique
Sub.
3.3 Authorization. The respective Board of Directors of Unique and
Unique Sub each have approved, or will approve prior to Closing, the execution
and delivery of this Agreement and the Articles of Merger and the performance by
each of its respective obligations and undertakings hereunder and thereunder.
The officers executing this Agreement on behalf of Unique and Unique Sub have
authority to do so, and, upon execution by such officers, this Agreement shall
be the valid and binding obligation of Unique and Unique Sub. Unique, as the
sole shareholder of Unique Sub, has approved, or will approve prior to Closing,
the execution and delivery of the Articles of Merger and the consummation of the
transactions contemplated
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13
thereby. The foregoing actions are sufficient to approve this Agreement, the
Merger and all other transactions contemplated hereby in accordance with
applicable corporate statutes.
3.4 No Violation; Consents and Approvals. Neither the execution nor
delivery of this Agreement and the Articles of Merger by Unique or Unique Sub
nor the consummation of the transactions contemplated hereby and thereby will
conflict with, result in a breach of, permit any party to terminate or
accelerate the provisions of, or result in the imposition of any lien,
encumbrance or restriction upon the property or assets of Unique or any of its
subsidiaries under (a) the provisions of their respective charters or Bylaws,
(b) the provisions of any obligation, indenture, agreement, permit or other
instrument to which Unique or any of its subsidiaries is a party or which Unique
or any of its subsidiaries holds, or (c) any statute or law or any order,
decree, judgment, rule or regulation of any court or governmental agency or
authority having jurisdiction over Unique or any of its subsidiaries, except in
the case of clause (ii) above where such violations individually or in the
aggregate with all such other violations would not have a material adverse
effect on the financial condition, business, properties, results of operations
or prospects of Unique and its subsidiaries considered as a whole. Except for
(i) filing and recordation of the Articles of Merger and such other appropriate
merger documents as may be required by the CBCA and (ii) any filings required in
connection with the issuance of the shares of Unique Common Stock, no permit,
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority or other person (either
governmental or private) is necessary in connection with the execution and
delivery by Unique, Unique Sub or any of their subsidiaries of this Agreement
and the Articles of Merger or the consummation by them of the transactions
contemplated hereby and thereby.
3.5 SEC Filings and Financial Statements.
(a) Unique has furnished or, upon filing with the SEC, will furnish to the
Shareholders, true and complete copies of (i) its Annual Report on Form 10-K for
the fiscal year ended October 31, 1996, its Transition Report on Form 10-K for
the five months ended March 31, 1997, its quarterly reports on Form 10-Q for the
quarters ended June 30, 1997 and September 30, 1997 and its Current Reports on
Form 8-K dated June 18, 1997 and June 30, 1997 as filed with the SEC pursuant to
the Securities Exchange Act of 1934, as amended (the "Act"); (ii) its Proxy
Statement relating to the Annual Meeting of stockholders of Unique held on
August 19, 1997 (collectively, the "Unique SEC Filings"). The Unique SEC Filings
did not, or will not, as of their respective dates of filing, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading.
(b) The Unique SEC Filings contain true and complete copies of Unique's
consolidated financial statements as of September 30, 1997, June 30, 1997, March
31, 1997, and October 31, 1996 and 1995, consolidated statements of income, and
statements of common stockholders' equity and statements of cash flows for the
periods then ended (collectively, the "Unique Financial Statements"). The Unique
Financial Statements have been prepared from the books and records of Unique and
present fairly the consolidated financial
#352586.v6, January 12, 1998 (6:58am)
14
position of Unique and its subsidiaries as of the dates thereof, all in
conformity with United States generally accepted accounting principles applied
on a consistent basis for such periods.
3.6 Merger Stock. The Unique Common Stock to be issued in the Merger
will, when issued and delivered, be duly authorized, validly issued, fully paid,
nonassessable shares of Unique Common Stock, free of all claims of preemptive
rights.
3.7 Litigation. There are no actions, suits, claims, proceedings,
investigations or inspections, pending or threatened, against or affecting
Unique or its subsidiaries which could have a material adverse effect on Unique
and its subsidiaries considered as a whole. To Unique's best knowledge formed
after reasonable inquiry, there are no matters of litigation or governmental
proceedings expected to be brought against it or its subsidiaries which could
have a material adverse effect on the financial condition of Unique and its
subsidiaries considered as a whole.
3.8 SEC Disclosure. The Registration Statement will not contain any
untrue statement of a material fact nor will it omit to state a material fact
necessary to make the statements contained therein not misleading, except that
no representation is made with respect to information to be contained therein
regarding Aerocom and supplied by Aerocom or the Shareholders.
IV. COVENANTS OF THE SHAREHOLDERS
AND AEROCOM
4.1 Announcements and Communications. Aerocom and the Shareholders
shall not, without the prior written approval of Unique, make any public
announcement or furnish any information to the public concerning the
transactions contemplated by this Agreement. Aerocom and the Shareholders shall
promptly advise Unique of all communications which they receive pertaining to
the transactions contemplated by this Agreement, including, without limitation,
communications from governmental agencies and authorities.
4.2 Notice of Certain Actions. Aerocom shall promptly notify Unique of
any actions, suits, claims, investigations, or proceedings commenced or, to the
best of its knowledge, threatened against, relating to or involving or otherwise
affecting Aerocom which, if pending on the date hereof, would have been required
to have been disclosed in writing pursuant to this Agreement or which relate to
the consummation of the Merger.
4.3 No-Shop Provision. Until the Closing Date, neither Aerocom nor any
Shareholder: (i) shall seek to merge Aerocom into any entity other than Unique
or an affiliate of Unique, (ii) shall negotiate or entertain any other offer
with respect to the sale of all or part of the capital stock of Aerocom or
substantially all of Aerocom's assets or (iii) shall authorize or permit any
officer, director, employee, investment banker, attorney, accountant or other
representative to, solicit or encourage the making of any other proposals
reasonably expected to lead to the acquisition of all or part of the capital
stock of Aerocom or substantially all of Aerocom's assets.
#352586.v6, January 12, 1998 (6:58am)
15
Aerocom and the Shareholders shall promptly notify Unique and Unique Sub in
writing of any such proposal.
4.4 Conduct of Business Pending the Merger. The Shareholders and
Aerocom covenant and agree, prior to the Effective Time, unless Unique shall
otherwise agree in writing (which agreement will not be unreasonably withheld or
delayed) or as otherwise expressly permitted or contemplated by this Agreement
that:
(a) the business of Aerocom shall be conducted only in the ordinary course
of business and consistent with past practice and Aerocom shall not (i) make any
material change in its operations including any general overall increase in
pricing (which shall not prohibit price increases in the normal and ordinary
course of business) or (ii) purchase or sell any significant properties or
assets outside of the ordinary course of business or which would result in
Aerocom owning in the aggregate an amount of properties and assets less than the
aggregate amount of properties and assets owned by Aerocom on the date hereof;
(b) Aerocom shall not (i) split, combine or reclassify any shares of its
capital stock or (ii) declare, set aside or pay any dividend or other
distribution or make any payment in cash, stock or property in respect of any
shares of its capital stock;
(c) Aerocom shall not (i) amend its Articles of Incorporation or Bylaws,
(ii) issue or sell any shares of, or rights of any kind to acquire any shares of
or to receive any payment based on the value of, its capital stock or any
securities convertible into shares of any such capital stock, (iii) incur any
indebtedness other than trade credits or working capital loans drawn on
Aerocom's existing line of credit in the ordinary course of business, (iv)
acquire, directly or indirectly, by redemption or otherwise, any shares of its
capital stock, (v) cancel or decrease any existing insurance coverage, or (vi)
modify any existing contract, agreement, commitment or arrangement with respect
to any of the foregoing;
(d) Aerocom shall use its best efforts to preserve intact its business
organization, to keep available the services of its current officers and key
employees, and to preserve the goodwill of those having business relationships
with it;
(e) Aerocom shall not (i) increase in any manner the compensation of any of
its executive officers or key employees, (ii) increase in any manner the
compensation of any of its other officers or employees, except in the ordinary
course of business, (iii) pay or agree to pay any pension, retirement allowance
or other employee benefit not required by any existing plan, agreement or
arrangement with any director, officer or key employee, whether past or present,
(iv) except as required by the terms of any existing plan, agreement or
arrangement, adopt or commit itself to or enter into any additional pension,
profit-sharing, bonus, incentive, deferred compensation, stock purchase, stock
option, stock appreciation right, group insurance, severance pay, retirement or
other employee benefit plan, agreement or arrangement, or to any employment or
consulting agreement with or for the benefit of any director, officer or
employee, whether past or present or (v) amend any such plan, agreement or
arrangement;
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16
(f) other than pursuant to commitments set forth in Section 4.5 of the
Disclosure Schedule and other than in the ordinary course of business and
consistent with past practice, Aerocom shall not make any capital expenditures
or commitments for capital expenditures which individually exceed $25,000 or
which in the aggregate exceed $100,000;
(g) other than in the ordinary course of business and consistent with past
practice, Aerocom shall not waive any rights of substantial value or make any
payment, direct or indirect, of any material liability of such Company before
the same comes due in accordance with its terms;
(h) Aerocom shall not lease, mortgage, encumber or otherwise grant any
interest in any of its assets or properties, except for liens for current taxes
not yet due and liens or encumbrances that are not substantial in amount and do
not materially detract from the value or impair the use of the property subject
thereto;
(i) Aerocom shall, at all times up to and including the Effective Time,
maintain its existing insurance coverage of all types in effect or procure
substantially similar substitute insurance policies with financially sound and
reputable insurance companies in at least such amounts and against such risks as
are currently covered by such policies; and
(j) Aerocom shall not agree, in writing or otherwise, to take any of the
actions prohibited by the foregoing clauses (a) through (j).
4.5 Cause Conditions to be Satisfied. The Shareholders and Aerocom
shall use their best efforts to cause all of the conditions set forth in Section
8.1 hereof to be satisfied at the earliest practical time.
V. COVENANTS OF UNIQUE AND UNIQUE SUB
5.1 Announcements and Communications. Except as required by applicable
laws, (i) prior to the Closing, Unique and Unique Sub shall not, without the
prior written approval of the Shareholders, make any public announcement or
furnish any information to the public concerning the transactions contemplated
by this Agreement, and (ii) following the Closing, Unique shall not, without the
prior written approval of the Shareholders, make any public announcement or
furnish any information to the public concerning the price or terms of this
Agreement.
5.2 Capitalization of Aerocom. Within 30 days after the Closing Date,
Unique shall contribute an aggregate amount of $500,000 in cash to the capital
of Aerocom.
5.3 Buy-Back of Equipment. If within five years after the Closing Date
(i) Unique shall commence voluntary proceedings under the United States
Bankruptcy Code, or (ii) involuntary proceedings shall be commenced against
Unique and such proceedings shall not be dismissed within 90 days after filing,
then (i) the non-competition clauses of the Non- Competition Agreements shall be
terminated and (ii) the Shareholders shall have the option, to
#352586.v6, January 12, 1998 (6:58am)
17
be exercised by written notice from any of them to Unique, to purchase the
manufacturing equipment owned by Aerocom immediately preceding the Closing Date
together with all such equipment acquired after the Closing Date that is
necessary for the manufacture of gears for Funk Manufacturing Company. The
option purchase price shall be payable in cash in an amount equal to the
appraised value of the equipment on a date within 30 days of the date of
purchase. Upon exercise of an option to purchase, the Shareholders exercising
such option shall become jointly and severally obligated to consummate the
purchase.
5.4 Cause Conditions to be Satisfied. Unique shall use its best efforts
to cause all of the conditions set forth in Section 8.2 hereof to be satisfied
at the earliest practical time.
VI. UNIQUE COMMON STOCK - REGISTRATION RIGHTS
6.1 Unique Common Stock to be Issued. The Unique Common Stock to be
issued in the Merger will not be registered under the Securities Act of 1933
(the "Act") at the time of issuance and will be issued pursuant to an exemption
from registration. As a result, such shares must be held indefinitely unless
subsequently registered under the Act or unless an exemption from such
registration is available. Unique assumes no obligation to register the shares
of Unique Common Stock except as provided below. All shares of Unique Common
Stock to be issued in the Merger will hereafter for purposes of this Article VI
be referred to as the "Restricted Securities." The Restricted Securities will
cease to be restricted when they have been effectively registered under the Act
and disposed of in accordance with that registration or they have been
distributed to the public pursuant to Rule 144 under the Act or they have been
otherwise transferred and new certificates representing such securities have
been delivered which do not bear any legend restricting their transfer and such
securities are not subject to any stop transfer order or other restriction on
transfer. In certain circumstances after the expiration of the registration
rights provided for herein, sales of the Common Stock may be made in reliance
upon Rules 144 and 145 of the Act and the terms and conditions thereof. Unique
will supply the holders of such Unique Common Stock with such information as is
necessary to enable them to make sales of Unique Common Stock under Rules 144
and 145 of the Act.
6.2 Restrictive Legend. The certificates for shares issued pursuant to the
Merger will each bear a legend substantially as follows:
The securities represented by this Certificate have not
been registered under the Securities Act of 1933 or the
laws of any state and may not be transferred in the
absence of (a) an effective registration statement for the
securities under the Securities Act of 1933 and applicable
state laws or (b) an opinion of counsel satisfactory to
Unique that such registration is not required.
6.3 Investment Representations. Aerocom and the Shareholders each
acknowledge receipt of the Unique SEC Filings. The Shareholders acknowledge the
willingness of Unique to provide appropriate officers to answer any questions
that the Shareholders many have had with respect to the contents of the Unique
SEC Filings. Each Shareholder has such knowledge and
#352586.v6, January 12, 1998 (6:58am)
18
experience in financial and business matters that such Shareholder is capable of
evaluating the merits and risks of an investment in the Unique Common Stock.
Each Shareholder is able to bear the economic risk of the investment and has the
ability to hold the Stock indefinitely and the ability to suffer a complete loss
of his investment. Each Shareholder is acquiring the Unique Common Stock for
investment for his own account, for investment purposes only, without any
intention of subdividing or reselling such Stock prior to the time it is
registered under the Act. Each Shareholder understands that investment in the
Unique Common Stock is speculative and earnings therefrom are uncertain. Each
Shareholder also understands that he may not sell, offer for sale, assign,
pledge, hypothecate or otherwise transfer or encumber all or any part of his
interest in the Unique Common Stock in the absence of either (i) an effective
registration statement covering such transaction under the Act and effective
qualification or registration under all applicable state securities laws and
regulations, or (ii) an opinion of counsel satisfactory to Unique to the effect
that registration under the Act is not required and qualification or
registration under any such state securities laws and regulations is not
required (or that any applicable state qualification or registration
requirements have been satisfied in full). Each Shareholder also understands and
agrees that that, as a further condition to any disposition, Unique may require
that the proposed transferee furnish Unique with written representations
substantially the same as those made by the Shareholder herein. Each Shareholder
acknowledges that no representations or warranties have been made to him by
Unique or any officer, director, agent or employee of Unique. Each Shareholder
has had the opportunity to review the purchase of the Unique Common Stock
subscribed for with his tax and legal counsel and investment representatives.
Each Shareholder acknowledges that he may recognize taxable income to the extent
of all cash received by him in the Merger, that such income will be taxed at
ordinary income rates and that he will receive no opinion of tax counsel for
Unique in connection with the Merger and must rely on his own tax advisors for
tax advice in connection with the Merger. Each Shareholder agrees to indemnify
and hold harmless Unique, its directors, officers, shareholders, agents and
employees from and against any claim, demand, loss, liability and expense
(including, without limitations, attorneys' fees and disbursements) incurred as
a result of any misrepresentation or breach of any agreement, representation,
warranty or covenant made by such Shareholder herein or in any other document
furnished by such shareholder to any of such persons in connection with this
transaction.
6.4 Registration Rights.
(a) Unique agrees to file with the SEC within 15 business days after the
Effective Date, a registration statement on Form S-3 (the "Registration
Statement") with respect to the resale by the Shareholders of (i) the Closing
Shares and (ii) the Escrow Shares, if and when such shares are released from
escrow pursuant to the Escrow Agreement, and to use reasonable efforts to cause
the Registration Statement to become effective as soon as practicable
thereafter; provided, however, that Unique shall not be responsible for any
delay in filing or failure to file a Registration Statement which results from
the failure of the Shareholders to provide to Unique such information as Unique
requests in order to comply with the Act and regulations of the SEC. Unique will
promptly prepare and file with the SEC such amendments and supplements to each
such Registration Statement and the prospectus used in connection with such
Registration Statement as may be necessary to keep the Registration Statement
effective to comply with the
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19
provisions of the Act with respect to the disposition of all of the Shares
registered thereunder (collectively, the "Registered Shares") until the earlier
of (x) such time as all of the Registered Shares have been disposed of in
accordance with the intended methods of distribution by the Shareholders set
forth in the Registration Statement (which shall consist of sales on the
American Stock Exchange, in negotiated transactions or through a combination of
methods but which shall not include an underwritten public offering), or (y) one
year after the issuance of the shares covered thereby.
(b)(i) Unique shall promptly notify the Shareholders of the issuance by the
SEC of any stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose. Unique shall use
reasonable efforts to obtain the withdrawal of any such stop order. In the event
of any stop order suspending the effectiveness of the Registration Statement,
Unique shall be required to keep the Registration Statement effective until the
earlier of (x) such time as all Registered Shares offered thereby have been
disposed of in accordance with the intended methods of distribution set forth in
the Registration Statement or (y) the period required by paragraph (a) above
plus an extended period equal to the number of days during which any such
suspension was in effect.
(ii) Notwithstanding anything to the contrary set forth in this Agreement,
Unique's obligations under this Section to file the Registration Statement and
to use reasonable efforts to cause the Registration Statement to become and
remain effective (and the right of the Shareholders to use the prospectus
contained therein) shall be suspended in the event and during such period as
Unique determines that the existence of any fact or the happening of any event
(including without limitation pending negotiations relating to, or the
consummation of, a transaction or the occurrence of any other event) would
require additional disclosure of material information by Unique in the
Registration Statement, the confidentiality of which Unique has a business
purpose to preserve or which fact or event would render Unique unable to comply
with SEC requirements (in either case, a "Suspension Event"). The suspension of
Unique's obligations in accordance with the preceding sentence shall not exist
for any longer period of time than such suspension exists for other similarly
restricted shareholders of Unique. Unique shall notify the Shareholders promptly
in writing of the existence of any Suspension Event. In the case of any
Suspension Event occurring prior to and delaying the filing of the Registration
Statement, Unique shall file the Registration Statement as soon as practicable
after the conclusion of the Suspension Event.
(iii) Following the effectiveness of each Registration Statement, each
Shareholder agrees that he will not effect any sales of the Registered Shares
offered thereby at any time after he has received notice from Unique to suspend
sales as a result of a stop order or the occurrence or existence of any
Suspension Event. The Shareholders may recommence effecting sales of the
Registered Shares offered thereby following further notice to such effect from
Unique, which notice shall be given by Unique promptly after the withdrawal of
any stop order or the conclusion of any such Suspension Event.
6.5 Post-Effective Matters. Unique will deliver to the holders of such
Restricted Securities after effectiveness of any registration under this
Agreement, such reasonable number
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20
of copies of a definitive prospectus included in such Registration Statement and
of any revised or supplemental prospectus filed as such holders may from
time-to-time request. Unique shall file post-effective amendments or supplements
to such Registration Statement for a period continuing until the Shareholders
have held their Restricted Stock for a period of one year. So long as a
prospectus is required to be delivered under the Act, Unique agrees to use its
reasonable best efforts to keep the Registration Statement effective at all
times during such one year period and to at all times comply with the various
applicable federal and state securities laws (after which period Unique may
withdraw such Restricted Securities from registration), and shall deliver copies
of the prospectus contained therein as herein-above provided. Notwithstanding
the above, each Shareholder agrees to notify Unique if he sells all of his
Restricted Securities within one year of issuance. Upon receipt of such
notification from all of the Shareholders, Unique's obligation to keep the
Registration Statement effective shall terminate. Each Shareholder also agrees
to notify Unique at least two full business days in advance of any sale or
series of sales of the Restricted Securities aggregating 10,000 or more shares
of Unique Common Stock.
6.6 Additional Governmental Approval. If, in connection with the
registration under the Act, any Restricted Securities require registration or
qualification with or approval of any United States or State governmental
official or authority, other than registration under the Act, before such
Restricted Securities may be sold, Unique will use its best reasonable efforts
to take all actions required to be taken by Unique to cause any such shares to
be duly registered, approved or otherwise qualified for sale, as may be
required, provided, however, that it shall not be required to give a general
consent to service of process or to qualify as a foreign corporation or subject
itself to taxation as doing business in any such state.
6.7 Registration Expenses. Unique shall pay all of the expenses in
connection with the registration referenced herein, including without limitation
costs of complying with federal and state securities laws and regulations,
attorneys' fees of Unique, accounting fees, printing expenses and filing fees;
except transfer taxes, underwriting commissions, discounts and expenses, and
other expenses including attorneys' fees, of Aerocom and the Shareholders.
VII. UNIQUE DUE DILIGENCE
7.1 Unique Due Diligence. During the period prior to the Closing Date,
Aerocom and the Shareholders will give to Unique and its counsel, accountants,
actuaries and other experts and other representatives, full access, during
normal business hours, to Aerocom's and the Shareholders' (to the extent such
items are used by Aerocom in its business) assets (including the leased real
estate), contracts, commitments and other records (including computer files,
retrieval programs and other documentation relating to Aerocom's business) and
will furnish Unique and such representatives, with all such information and data
concerning the affairs of Aerocom as Unique or such representatives reasonably
may request for the purposes of verifying the representations and warranties
made herein and further investigating the business and affairs of Aerocom prior
to the Closing. Unique shall be permitted to conduct, through its
representatives, an environmental audit on any real estate leased by Aerocom at
the cost and expense of Unique. The performance of the due diligence of Unique
or Unique Sub or the acquisition of information
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21
by Unique or Unique Sub shall not relieve any Shareholder from any
representation, warranty or covenant made by him in this Agreement.
7.2 Supplemental Disclosure. Aerocom and the Shareholders shall each
have the continuing obligation to promptly supplement or amend the Disclosure
Schedules with respect to any matter hereafter arising or discovered which, if
existing or known at the date hereof, would have been required to be set forth
or described in the Disclosure Schedules; provided, however, that for the
purpose of the rights and obligations of the parties hereunder, any such
supplemental or amended disclosure shall not be deemed to have been disclosed as
of the date hereof unless so agreed to in writing by Unique.
VIII. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Unique's and Unique Sub's Obligations. The
performance of the obligations of Unique and Unique Sub under this Agreement are
subject, at the election of Unique, to the fulfillment or written waiver of each
of the following conditions on or before the Closing:
(a) All proceedings taken in connection with the transactions contemplated
by this Agreement and all instruments and documents required in connection
therewith or incident thereto shall be reasonably satisfactory in form and
substance to Unique.
(b) The representations and warranties of Aerocom and the Shareholders
contained in this Agreement, the Disclosure Schedule or any certificate or
document delivered to Unique or Unique Sub pursuant hereto shall be true and
correct in all material respects on the date hereof and on the Closing, subject
to any changes and exceptions thereto which are contemplated in this Agreement
or consented to in writing by Unique. Aerocom and the Shareholders shall have
performed and complied in all material respects with all agreements and
conditions required by this Agreement to be performed or complied with by them
on or before the Closing. Unique shall have been furnished with a certificate
from Aerocom executed by the Shareholders and on behalf of Aerocom by the
President or a Vice President of Aerocom dated the Closing Date, certifying to
the fulfillment of the foregoing conditions by Aerocom and further certifying
that to the best of such officer's knowledge there is no material pending or
threatened litigation, proceeding or governmental investigation relating to such
Company, and that there has been no material adverse change in the financial
condition or business of Aerocom or any damage or destruction of assets of
Aerocom which would affect Aerocom's ability to conduct business substantially
as theretofore conducted.
(c) There shall have been obtained written consents, in form and substance
reasonably satisfactory to Unique, of each party whose consent to the
transactions contemplated hereby is required including those set forth in
Section 2.4 of this Agreement.
(d) No bona fide litigation or proceeding shall be pending or threatened to
restrain, set aside or invalidate the transactions contemplated by this
Agreement and the Articles of Merger.
#352586.v6, January 12, 1998 (6:58am)
22
(e) The Shareholders as the majority shareholders of Aerocom and the Board
of Directors of each of Unique and Unique Sub shall have voted to approve the
matters referred to in this Agreement, the Articles of Merger and the
transactions contemplated thereby.
(f) Aerocom shall have delivered to Unique the documents required to be
delivered hereunder, including those to be delivered at the Closing pursuant to
Section 9.1 hereof.
(g) Each of the directors and officers of Aerocom shall have submitted his
resignation as director or officer in writing effective the Closing Date unless
otherwise approved in writing by Unique.
(h) The exchange of shares of Unique Common Stock for shares of Aerocom
Common Stock pursuant to this Agreement and the Articles of Merger shall be made
in compliance with applicable federal and state securities laws.
(i) The Merger shall be deemed to be effective under applicable CBCA.
8.2 Conditions Precedent to Aerocom's and the Shareholders'
Obligations. The performance of Aerocom and the Shareholders under this
Agreement is subject, at the election of the Shareholders, to the fulfillment or
written waiver of each of the following conditions on or before the Closing:
(a) The representations and warranties of Unique and Unique Sub contained
in this Agreement or in any certificate or document delivered to the
Shareholders pursuant hereto shall be true and correct on the date hereof and
shall be deemed to have been made again on the Closing Date and speak as of the
Closing and shall then also be true and correct, subject to any changes and
exceptions thereto which are contemplated in this Agreement or consented to in
writing by the Shareholders. Unique and Unique Sub shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by them, respectively, on or before the Closing. The
Shareholders shall have been furnished with certificates from Unique and Unique
Sub executed on behalf of Unique and Unique Sub by the President or a Vice
President of Unique and Unique Sub, respectively, dated as of the Closing,
certifying to the fulfillment of the foregoing conditions by Unique and Unique
Sub, respectively.
(b) No bona fide litigation or administrative proceeding shall be pending
or threatened to restrain, set aside or invalidate the transactions contemplated
by this Agreement or Articles of Merger.
(c) Unique and Unique Sub shall have delivered to the Shareholders at the
Closing the documents required to be delivered pursuant to Section 9.2 hereof.
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23
(d) At the time of Closing pursuant to this Agreement, Unique shall apply
for and use its best efforts to obtain a listing of the Restricted Securities on
the principal exchange on which any other Unique Common Stock is then listed.
(e) The exchange of shares of Unique Common Stock for shares of Aerocom
Common Stock pursuant to this Agreement and the Articles of Merger shall be made
in compliance with applicable federal and state securities laws.
(f) The Merger shall be deemed to be effective under applicable CBCA.
IX. DOCUMENTS TO BE DELIVERED AT CLOSING
9.1 Documents to be Delivered by Aerocom or the Shareholders at the
Closing. At the Closing, Aerocom or the Shareholders shall deliver to Unique and
Unique Sub:
(a) the Articles of Merger executed by Aerocom in the form of Exhibit A;
(b) copies certified by the Secretary or Assistant Secretary of Aerocom of
the resolutions of Aerocom's Board of Directors and the Shareholders approving
this Agreement and the Articles of Merger and authorizing the transactions
contemplated hereby and thereby;
(c) the written consents, in form and substance reasonably satisfactory to
Unique, of each party whose consent to the transactions contemplated hereby is
required;
(d) the resignations of each of the directors and officers of Aerocom, in
writing effective the Effective Date;
(e) custody of all of Aerocom's books, records, papers and other documents;
(f) an Employment Agreement (the "Employment Agreement") executed by Lang
and Buschy in the form of Exhibit 9.1(f);
(g) a Non-Competition and Non-Disclosure Agreement (the "Non-Competition
Agreement") executed by each of the Shareholders in the form of Exhibit 9.1(g);
(h) an Escrow Agreement executed by the Shareholders in the form of Exhibit
1.2 (the "Escrow Agreement");
(i) the Officer's certificate required under Section 8.1(b);
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24
(j) copies of the Articles of Incorporation, as amended, of Aerocom as
certified by the Secretary of State of Colorado and copies of the Bylaws of
Aerocom certified by the respective Secretary or an Assistant Secretary of
Aerocom;
(k) certificates of Good Standing of Aerocom issued by the Secretary of
State of Colorado, dated within ten days of the Closing Date; and
(l) the documents set forth in Section 8.1 to be delivered by Aerocom.
9.2 Documents to be Delivered by Unique and Unique Sub at the Closing. At
the Closing, Unique and Unique Sub shall deliver to Aerocom and the
Shareholders:
(a) a certified copy of the respective resolutions of the Board of
Directors of Unique and Unique Sub approving this Agreement and authorizing the
transactions contemplated hereby and, in the case of Unique, authorizing the
issuance of the shares of Unique Common Stock to be exchanged pursuant to the
Articles of Merger;
(b) a certified copy of resolutions of the shareholder of Unique Sub
approving this Agreement and the Articles of Merger and the transactions
contemplated hereby and thereby;
(c) the Articles of Merger executed by Unique and Unique Sub in the form of
Exhibit A;
(d) the Employment Agreements executed by Unique in the form of Exhibit
9.1(f);
(e) the Non-Competition Agreements executed by Unique in the form of
Exhibit 9.1(g);
(f) the Escrow Agreement executed by Unique in the form of Exhibit 1.2;
(g) the officer's certificate required under Section 8.2(b); and
(h) the documents set forth in Section 8.2 to be delivered by Unique and
such other certificates and documents as the Shareholders may reasonably
request.
X. INDEMNIFICATION
10.1 Survival of Representations and Warranties. All of the terms and
conditions of this Agreement, together with the warranties, representations and
covenants contained herein or in any instrument or document delivered or to be
delivered pursuant to or in connection with this Agreement, shall survive the
execution of this Agreement and the Closing notwithstanding any investigation or
due diligence heretofore or hereafter made by or on behalf of any party hereto;
#352586.v6, January 12, 1998 (6:58am)
25
provided, however, that (i) the agreements set forth in Articles VI and XI
hereof shall continue and survive until all obligations set forth therein shall
have been performed and satisfied, and (ii) all other representations,
warranties and agreements (including those made by Unique), shall terminate on
the three year anniversary of the Closing Date except (y) as to matters with
respect to which a party shall have given written notice of any claim within
such period and (z) as to the matters set forth in Sections 2.23 and 2.24 (to
the extent such representations and warranties in Section 2.24 relate to
environmental liabilities) which shall continue and survive until such time as
the applicable statute of limitations or tolling period for such acts, laws,
regulations or agreements shall have expired. Notwithstanding the above
limitations, indemnification for matters fraudulently concealed by any party
hereto shall extend indefinitely or until the applicable statute of limitations
period has expired.
10.2 Indemnification.
(a) Subject to the following provisions of this Article X, commencing on
the Closing Date, each Shareholder shall defend, indemnify and hold harmless,
Unique, Unique Sub and any of their respective officers, directors, employees
and affiliates, from any and all claims, damages, losses, liabilities, costs or
expenses (including, without limitation, amounts paid in settlement, reasonable
attorneys' fees and costs of investigation), whether fixed or contingent,
matured or unmatured, liquidated or unliquidated ("Claims"), which any of them
may incur or suffer as a result of or arising out of any breach of the
representations, warranties, covenants or agreements of Aerocom or the
Shareholders set forth in this Agreement except for those Claims, or portion of
a Claim, which are covered by insurance maintained by Aerocom prior to Closing.
(b) Subject to the following provisions of this Article X, commencing on
the Closing Date, Unique and Unique Sub, jointly and severally, shall indemnify
and hold the Shareholders harmless from all Claims which it may incur of suffer
as a result of or arising out of (i) any breach of the representations,
warranties, covenants or agreements of Unique or Unique Sub, set forth in this
Agreement for which Claim has been made during the applicable periods hereunder
except for those Claims, or portion of a Claim, which are covered by insurance
maintained by Aerocom prior to Closing, or (ii) any action or omission of Unique
in the operation of the business of Aerocom following the Closing.
(c) The indemnification provisions contained in this Article X shall be the
exclusive basis for the assertion of Claims or the imposition of liability by
one party against another party to this Agreement arising from actions or Claims
resulting from the breach or default of any representation, warranty, covenant
or agreement contained herein. This Article X shall not, however, be the
exclusive basis for asserting Claims arising from any subsequently entered into
document or agreement including any non-competition or similar agreement to be
entered into pursuant to this Agreement.
10.3 Escrowed Shares; Indemnification Offsets. Unique may satisfy any
Purchase Price adjustment set forth in Article I or any Claim which is the
subject of indemnification herein from the Escrow Shares. Certificates
evidencing the Escrow Shares, together with stock powers
#352586.v6, January 12, 1998 (6:58am)
26
executed in triplicate, shall be delivered to the Escrow Agent under the terms
and conditions of this Article X and the Escrow Agreement. The escrow shall
extend for three years subject to the terms of the Escrow Agreement.
10.4 Indemnification Procedure; Arbitration.
(a) Upon the commencement by any third party of any administrative or
judicial proceeding or notice with respect to which any Claim is to be made,
Unique shall deliver written notice of the Claim and the nature of the liability
to the Shareholders for purposes of contesting any Claim asserted by Unique.
With respect to any Claim that the Shareholders agree could, if successful,
result in an obligation the Shareholders to indemnify Unique under the terms of
this Article X, the Shareholders at their expense shall be entitled to control
the defense of such Claim with counsel reasonably satisfactory to Unique. Unique
shall control the defense of all other Claims. Neither party shall incur any
liability hereunder with respect to the settlement of any Claim if such
settlement is effected without such party's written consent, which consent shall
not be unreasonably withheld and shall be given or withheld within 15 days from
notice of any proposed settlement.
(b) Each party shall furnish written notice of any other Claim it may have
(other than third party Claims referred to in paragraph (a) above) hereunder
(the "Indemnitees") to the others (the "Indemnitors"), setting forth the amount
of the Claim, if known, and the nature of the liability. The Indemnitors shall
have ten business days following the receipt of a notice of a Claim within which
to deliver a written objection to the Indemnitees with respect to any Claim,
setting forth the grounds for the objection (a "Disputed Claim"). Each party
shall use its best efforts to settle any Disputed Claim within 20 business days
following receipt by the Indemnitees of such objection. If any Disputed Claim is
not settled within such 20 business day period, and such Disputed Claim involves
less than $30,000, or upon agreement of the parties if such Disputed Claim
involves more than $30,000, such dispute shall be submitted to arbitration to be
conclusively determined by a panel of three arbitrators, one arbitrator being
selected by Unique, one arbitrator being selected by the Shareholders, and the
third arbitrator being selected by the two so selected by Unique and the
Shareholders or, in the event of their inability to agree on a selection of a
third arbitrator, as designated by the American Arbitration Association. All
such arbitrators shall be appointed as soon as reasonably possible but in no
event later than 60 days after the identification of a Disputed Claim. A hearing
on such Disputed Claim shall be held within 60 days of the appointment of the
last of the three arbitrators and the decision of such arbitrators shall be made
within 30 days of such hearing. Such arbitration shall be conducted in
accordance with the commercial arbitration rules of the American Arbitration
Association. A written arbitral award shall be delivered to Unique and the
Shareholders promptly following the resolution of a Disputed Claim by the
arbitrators. Such award shall be final, binding and unappealable by any party
thereto. All reasonable fees and expenses of the arbitrators and costs of the
arbitration shall be paid as determined by the arbitrators and to the extent not
so determined, each party shall pay its own expenses. Arbitration shall be
conducted in Denver, Colorado.
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27
10.5 Escrow Not to Limit Indemnification. Notwithstanding anything
herein to the contrary, the Shareholders shall indemnify Unique, its successors
and assigns, to the extent provided in this Article X and such indemnification,
to the extent provided, shall continue after the termination of the escrow
provided in this Article X and shall not be limited to the Escrow Shares. Any
Shareholder obligation arising under Article I or this Article X not satisfied
by the Escrow Shares shall first be satisfied by the Shareholders returning
Unique Common Stock to Unique valued at $8.18 per share. If a sufficient number
of shares are not retained by the Shareholders to enable the Shareholders to
make such payments using Unique Common Stock, the Shareholders shall pay Unique
by the wire transfer of immediately available funds.
XI. CERTAIN AGREEMENTS
11.1 Confidential Information. In the event the transactions
contemplated by this Agreement are not consummated, each party hereto will hold
all non-public confidential information which it obtained from the other parties
hereto in the course of negotiating this Agreement, which it did not previously
know or which was not previously in the public domain, confidential. No party
will directly or indirectly use such information until the same shall become in
the public domain (other than by disclosure by a party hereto receiving such
information for use pursuant hereto). Each party will return to the applicable
party all documents, objects and records obtained from such other party pursuant
hereto which are not in the public domain.
11.2 Liability for Events Prior to the Closing Date. The Shareholders
shall be jointly and severally responsible for, and shall defend at their own
cost, all claims, demand, actions, causes of action, liabilities and losses not
set forth on the Aerocom Financial Statements arising from any bodily injury,
property damage, environmental contamination or other occurrence attributable to
or caused (in whole or in part) by any product sold, rented or supplied, or any
service furnished, or any property owned or operated by Aerocom, or any other
conduct of Aerocom. Any claim against Aerocom, Unique Sub or Unique alleging any
such injury, damage or other occurrence shall be a claim for which Unique Sub
and Unique are entitled to indemnity pursuant to Article X hereof and shall be
governed by the provisions of that Section. Unique Sub and Unique shall notify
the Shareholders upon Unique's becoming aware of any such claims.
11.3 Preparation of Registration Statement. Aerocom will furnish Unique
with such information concerning the business and financial condition of Aerocom
and shall provide such assistance to Unique as may be reasonably necessary to
enable Unique to describe Aerocom, this Agreement and the transactions
contemplated hereby, and to disclose any other required informa tion, in the
Registration Statement. Aerocom will cooperate with Unique to maintain the
accuracy and completeness of the information in the Registration Statement and
will promptly inform Unique of any material change, whether adverse or
favorable, in the condition of Aerocom, financial or otherwise, which may affect
the accuracy or completeness of the information set forth in the Registration
Statement and which may occur at any time prior to the Closing Date.
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28
11.4 Destruction of Assets. Notwithstanding any other provision of this
Agreement, if, on or prior to the Closing Date, assets or other material
properties of Aerocom with a fair market value in excess of $50,000 shall have
suffered loss or damage on account of fire, flood, accident, act of war, civil
commotion, or any other cause or event beyond the reasonable power and control
of Aerocom to an extent which materially adversely affects the value of Aerocom,
Unique shall have the right, at its election, exercisable not later than ten
days after it receives notice of such loss or damage, either to consummate the
transaction contemplated by this Agreement, or, in lieu of every other right or
remedy whatsoever, to terminate this Agreement or amend this Agreement with the
consent of the Shareholders. In the event Unique terminates this Agreement, all
parties shall be released from liability hereunder except as set forth in
Section 11.2 herein. In the absence of a contrary election, it shall be presumed
that Unique has elected to complete the transaction hereunder. If the
transaction hereunder is closed, there shall be no adjustment in the Purchase
Price payable hereunder as a result of such loss or damage unless agreed upon in
writing by the parties prior to Closing, and Unique shall then be entitled to
retain all insurance proceeds and correct the damage itself through use of
insurance proceeds and other funds available to it.
11.5 Termination. Except for those obligations set forth in Section
11.2 herein which shall not terminate, either Unique or Aerocom may, as
applicable, on or prior to the Closing Date, terminate this Agreement without
liability as set forth below (provided the terminating party is not responsible
for the event which permits termination hereunder):
(a) by Unique or the Shareholders, if a bona fide action or proceeding
brought by a person not a party to this Agreement is pending wherein an
unfavorable judgment, decree or order would prevent or make unlawful the
carrying out of the transaction contemplated by this Agreement;
(b) by Unique if, following examination by it of all matters set forth in
Section 7.1 and following completion of all other acts necessary to accomplish
its due diligence, should it be determined by Unique in its reasonable
discretion that the nature of Aerocom's business, assets, the condition of the
real property and improvements or other matters material to this Agreement are
substantially different as represented by Aerocom and the Shareholders, then
consistent with the acknowledgment of the parties that Unique and Unique Sub
executed this Agreement based upon the representations of Aerocom and the
Shareholders, without the opportunity of fully examining Aerocom's business,
assets and other factors, Unique and Unique Sub shall have the right to
terminate this Agreement without any liability whatsoever upon written notice to
the Shareholders, which notice shall be sent at any time prior to the Closing
Date;
(c) by Unique or the Shareholders if any governmental body or agency having
jurisdiction and authority to prevent consummation of the transactions
hereunder, has formally asserted that consummation of such transaction violates
or would violate any applicable laws, or any rule or regulation of such body or
agency;
#352586.v6, January 12, 1998 (6:58am)
29
(d) by Unique or the Shareholders if any condition precedent to the
obligation of such party to consummate the transaction has not been satisfied or
waived;
In no event will any party entitled to terminate this Agreement pursuant to this
Section 11.6 be liable to the other party for money or other damages (liquidated
or otherwise) for failure to consummate the transactions contemplated in this
Agreement for any reason set out in this Section 11.5.
11.6 Tax Compliance; Final Tax Return. Each of the parties agrees to
take, or cause to be taken, all actions and to do or cause to be done, all
things necessary, proper or advisable to qualify the transactions contemplated
by this Agreement as a reorganization described in Sections 368(a)(1)(A) and
Section 368(a)(2)(E) of the Code. Notwithstanding any other provision of this
Agreement, the provisions of this Section shall survive the Closing for a period
of three years or until six months following the expiration of the applicable
statute of limitations for the period that includes the transactions
contemplated by this Agreement, whichever is longer. Further, each Shareholder
agrees to prepare all federal, state and local tax returns required to be filed
by Aerocom through the Effective Time consistent with prior year returns,
subject to Unique's written approval of each such return, which approval will
not be unreason ably withheld.
11.7 Assignment of Name. Each Shareholder agrees to assign any and all
rights he may have in the name "Aerocom" to Aerocom.
XII. MISCELLANEOUS
12.1 Expenses. Except as provided for herein, each party hereto shall
pay all of its or his expenses incurred by it or him in connection with this
Agreement and in consummation of the transactions contemplated hereby and in
preparation therefor, including, without limitation, the fees and expenses of
its or his respective attorneys, accountants and financial advisors.
12.2 Notices. All notices, demands and requests required or permitted
to be given under the provisions of this Agreement shall be deemed duly given if
mailed by registered mail, postage prepaid, return receipt requested, or by
Federal Express or similar overnight delivery service, or if delivered
personally or by telecopy, at the following addresses pending the designation of
another address in accordance with the provisions hereof:
(a) If to Unique and/or Unique Sub:
Unique Mobility, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. French
Telecopy No. 000-000-0000
#352586.v6, January 12, 1998 (6:58am)
30
With a copy to:
Holme Xxxxxxx & Xxxx LLP
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Telecopy No. 303-866-0200
(b) If to Aerocom or the Shareholders:
Xxxxxx X. Xxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Telecopy No. 000-000-0000
All deliveries required to be delivered to or received from Unique or
Unique Sub shall be satisfied by delivery to or receipt from Unique.
12.3 Entire Agreement. This Agreement, the Articles of Merger and the
other exhibits hereto contain all the terms agreed upon between the parties with
respect to the subject matter hereof and supersede all prior agreements,
arrangements and communications, whether oral or written. This Agreement may not
be changed or modified, except by agreement in writing, signed by all of the
parties hereto.
12.4 Headings. The headings of the Sections of this Agreement are for
convenience of reference only and shall not be deemed to explain, limit or
amplify the provisions hereof.
12.5 Successors in Interest. Except as otherwise specifically provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respec tive heirs, legal representatives, personal
representatives, successors and assigns.
12.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which shall
be deemed but one and the same instrument.
12.7 Governing Law. This Agreement shall be construed and interpreted in
accordance with and governed in all respects by the laws of the State of
Colorado.
12.8 Brokerage. Aerocom, the Shareholders, Unique and Unique Sub
represent and warrant that all negotiations relating to this Agreement have been
carried on by them directly between the parties without the intervention of any
person or firm. Aerocom, the Shareholders, Unique and Unique Sub shall each
indemnify the others and hold them harmless against and in respect of any claim
for brokerage, finders fees, or other fees or commissions relating to this
#352586.v6, January 12, 1998 (6:58am)
31
Agreement or to the transactions contemplated hereby caused by their actions
relating to brokerage or similar fees.
12.9 Waiver. At any time prior to the Effective Time, the parties
hereto by action taken by their respective Board of Directors 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 or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements or conditions contained herein
to the extent permitted by law. Any agreement on the part of a party hereto to
any extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.
12.10 Remedies for Breach; Specific Performance. Each of the parties
acknowledges and agrees that the other party or parties would be irreparably
damaged in the event any covenant or agreement contained in this Agreement is
not performed in accordance with its specific terms or is otherwise breached.
Accordingly, each of the parties will be entitled, without bond or other
security, to an injunction or injunctions to prevent breaches of the covenants
or agreements contained in this Agreement and to enforce specifically this
Agreement and the covenants and agreements contained herein or therein in any
action instituted in any court of the United States or any state thereof having
subject matter jurisdiction, in addition to any other remedy to which such party
may be entitled, at law or in equity. Each party agrees that should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take any action required herein, the other party
shall not be entitled to specific performance of such provision or part hereof
or to any other remedy, including money damages, for breach hereof as a result
of such holding or order.
12.11 Construction. This Agreement is to be deemed to have been
prepared jointly by the parties hereto after arms-length negotiations, and any
uncertainty or ambiguity existing herein shall not be interpreted against any
party, but according to the application of the rules of interpretation of
contracts.
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32
- 33 -
IN WITNESS WHEREOF, Aerocom, the Shareholders, Unique and Unique Sub
each has caused this Agreement to be duly executed in its name and on its
behalf, all as of the day and year first above written.
AEROCOM INDUSTRIES INC.
By: _/s/_____________________
Xxxxxx X. Xxxx
President
UNIQUE MOBILITY, INC.
By: __/s/____________________
Name:Xxxxxx X. French
Treasurer
UNIQUE MERGER SUB, INC.
By:_/s/______________________
Name:Xxxxxx X. French
Treasurer
SHAREHOLDERS:
__/s/________________________
Xxxxxx X. Xxxx
_/s/_________________________
Xxxxx X. Xxxxxx
_/s/_________________________
Xxxxxx X. Xxxxxxx
_/s/_________________________
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered
into as of this 16th day of January, 1998, by and among Unique
Mobility, Inc., a Colorado corporation ("Unique"), Xxxxxx X.
Xxxx, Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxxx and Xxxx X. Xxxxxx (the
"Shareholders") and Norwest Bank Colorado, N.A.(the "Escrow
Agent").
W I T N E S S E T H :
WHEREAS, Unique and Shareholders have prior to the execution of this Escrow
Agreement entered into an Agreement and Plan of Merger and Reorganization dated
as of January 16, 1998 (the "Agreement");
WHEREAS, pursuant to the terms of the Agreement, the Shareholders have
agreed that of the total number of shares of Unique' Common Stock being
transferred to the Shareholders (the "Shares"), 10% of the Shares shall be held
in Escrow pursuant to the terms of this Escrow Agreement (the "Escrowed
Shares"); and
WHEREAS, in accordance with the provisions of the Agreement, Norwest Bank
Colorado, N.A. is designated to act as Escrow Agent for the parties hereto under
the terms of this Escrow Agreement and pursuant to the terms of the Agreement,
the pertinent provisions of which are incorporated herein by reference.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS
(1) Appointment of Escrow Agent. Unique and the Shareholders hereby appoint
Norwest Bank Colorado, N.A. as Escrow Agent and such person hereby agrees to
serve as Escrow Agent pursuant to the terms of this Escrow Agreement and the
Agreement.
(2) Deposit of Escrow Shares. Pursuant to the terms of the Agreement, the
Shareholders agree to assign, transfer and deliver all of the Escrowed Shares to
the Escrow Agent. The Escrowed Shares shall be evidenced by stock certificates
endorsed in blank by the Shareholders or with attached stock powers duly
executed in blank by the Shareholders in proper form for transfer, with all
signatures guaranteed and all required stock transfer stamps attached.
Thereafter, Escrow Agent shall hold the Escrowed Shares pursuant to the terms of
this Escrow Agreement and the Agreement. The Escrow Agent shall also hold any
and all Escrowed Funds pursuant to the terms of this Escrow Agreement. The term
"Escrowed Funds" shall include sale proceeds from the sale of any of the
Escrowed Shares pursuant to the terms of this Escrow Agreement and interest or
other amounts earned on such proceeds. Dividends paid on the Escrowed Shares
shall be paid to the Shareholders.
(3) Administration and Investment
of Stock Certificates and Escrowed Funds. The Escrow Agent
agrees to receive and hold in escrow the Escrowed Shares and/or Escrowed Funds
pursuant to the terms of the Agreement and this Escrow Agreement and to perform
the acts and duties imposed upon it under the terms and conditions of both this
Escrow Agreement and the Agreement. Upon written request of the Shareholders,
the Escrow Agent shall sell all or a portion of the Escrowed Shares pursuant to
instructions provided by the Shareholders provided such sale can be made
pursuant to the terms of the Agreement. The Escrow Agent shall invest and
reinvest the Escrowed Funds in savings accounts, money market funds, other
short-term investment vehicles which will not incur a penalty upon withdrawal
and which are FDIC insured instruments of United States banks, short-term
securities issued by the United States Government, or other investments if
authorized by both Unique and the Shareholders in writing. All interest,
dividends and other amounts earned or paid on the Escrowed Funds shall be held
by the Escrow Agent until released pursuant to this Escrow Agreement.
(4) Disbursement of Escrowed Funds and Escrowed Shares; Termination of
Escrow Agreement. Pursuant to the terms of the Agreement, the Escrow Agent may
satisfy any and all claims of Unique for which Unique is entitled to
reimbursement (such as in the event of a post-closing adjustment to the purchase
price) or indemnification pursuant to the terms of the Agreement (collectively a
"Claim" or "Claims") by transferring all or a portion of the Escrowed Shares or
Escrowed
Funds to Unique to satisfy all such Claims. Any such transfer may only be made
upon the unanimous agreement of the Shareholders or pursuant to a valid court
order, binding arbitration award or authorization as provided for herein or in
Article X of the Agreement. In satisfying such Claims the Escrow Agent shall
first disburse the Escrowed Shares or a portion thereof to Unique. To the extent
any such Claim is not fully satisfied after disbursing all of the Escrowed
Shares, the Escrow Agent shall disburse the Escrowed Funds or the portion
thereof necessary to satisfy any such Claim to Unique. The Escrowed Shares shall
be valued at $8.18 per share, subject to adjustment to reflect any stock split
or stock dividend paid on the Escrowed Shares (the "Unique Share Value") for
purposes of satisfying all such Claims regardless of what the market value may
be at the time any such Claim is satisfied. Upon written notification from
Unique and the Shareholders, or upon the 36 month anniversary of this Escrow
Agreement, whichever is earlier, Escrow Agent shall disburse the balance of the
Escrowed Shares and Escrowed Funds to the Shareholders or, if any Shareholder
has died, to his estate. Notwithstanding the foregoing, if on the date of the
escrow share distribution to the Shareholders as set forth above, there shall be
a pending Claim, there shall be withheld from the Escrowed Shares distribution
and retained in escrow that number of Escrowed Shares having a value (determined
on the basis of the Unique Share Value) and Escrowed Funds if necessary, equal
to the
amount reasonably estimated by Unique to cover the reimbursement or
indemnification obligation of the Shareholders for any such pending Claims. Any
action which has been threatened by a third party, which if brought might
constitute a Claim, shall be considered a pending Claim. Unique shall notify the
Shareholders and Escrow Agent in writing of any Claim or any such pending Claims
prior to the scheduled 36 month termination of this Escrow Agreement. Upon the
disbursement of all Escrowed Funds and/or delivery of the Escrowed Shares,
including those which continue to be held in Escrow after the 36 month
anniversary of this Escrow Agreement, this Escrow Agreement shall be terminated.
(5) Voting Rights, Stock Splits, etc. The Shareholders shall have the right
to vote the Escrowed Shares during the time such shares are held in escrow
pursuant hereto. All shares of Unique Common Stock payable in respect of
Escrowed Shares as a result of any stock split or other non-cash distribution
(including a stock dividend) shall be deposited with the Escrow Agent by the
Shareholders, together with appropriate stock powers executed by the
Shareholders.
(6) Deposit Records. The Escrow Agent shall forward all account records or
statements related to the Escrowed Shares or Escrowed Funds and interest earned
thereon to Unique and the Shareholders. The Escrow Agent shall deliver to Unique
and the Shareholders, upon final disbursement, a complete accounting of all
transactions relating to this Escrow
Agreement. The Shareholders shall be responsible for any income tax or other
tax, federal and state, levied upon interest earned on the Escrowed Funds or
dividends declared on the Escrowed Shares.
(7) Provisions Concerning Escrow Agent.
(a) The Escrow Agent shall be entitled to rely, and shall be protected in
acting or refraining from acting, upon any instruction, document or instrument
furnished to them hereunder and believed by it to be genuine and believed by it
to have been signed or presented by Unique or the Shareholders. Nothing herein
contained shall be deemed to impose upon the Escrow Agent any duty to exercise
discretion, it being the intention hereof that the Escrow Agent shall not be
obligated to act except upon written instructions or direction. The Escrow Agent
shall not be liable for any action (or refraining from any action) taken by it
in good faith and believed by it to be authorized or within the rights or powers
conferred upon it in this Escrow Agreement or the Agreement. The Escrow Agent
may consult with counsel of its choice and shall be fully protected and
indemnified in acting or refraining to act in good faith in accordance with the
opinion of such counsel.
(b) The Escrow Agent shall be entitled
to a $1,500 fee and reimbursement for out-of-pocket expenses, including, but not
limited to, reasonable attorneys' fees incurred in connection with the
performance of its duties hereunder, to be paid by Unique. The Escrow Agent
shall not collect any fee from the Escrowed Shares or Escrowed Funds.
(c) Unique and the Shareholders each agree to indemnify and hold the Escrow
Agent harmless against any and all loss, damage, liability or expense incurred
arising out of or in connection with the acceptance of its position as Escrow
Agent and the administration of this Escrow Agreement, including the costs and
expenses of defending against any claim in connection with the performance of
its duties hereunder; provided, however, that the Escrow Agent shall not be
indemnified for any loss, damage, liability or expense caused by or arising out
of such Escrow Agent's gross negligence, willful misconduct or failure to act in
good faith.
(d) It shall be the Escrow Agent's responsibility for the safekeeping of
the Escrowed Funds and Escrowed Shares, the disbursement and delivery of such
Escrowed Funds and Escrowed Shares in accordance with this Escrow Agreement and
the Agreement, and the maintenance of records in accordance with this Escrow
Agreement, and the Escrow Agent shall not be required to take any other action
with reference to any matters which might arise in connection with the Escrowed
Funds, the Escrowed Shares or this Escrow Agreement.
(e) If any disagreement should arise among Unique or the
Shareholders with respect to this Escrow Agreement, the Escrowed Funds or
Escrowed Shares, the Escrow Agent shall have the absolute right to do either or
both of the following: (i) withhold or stop all performance under this Escrow
Agreement (save and except the safekeeping of the Escrowed Funds and Escrowed
Shares) until the Escrow Agent is satisfied that such disagreement has been
resolved; or (ii) file a suit in interpleader and obtain an order from a court
of appropriate jurisdiction requiring all persons involved to litigate in such
court their respective claims arising out of or in connection with the Escrowed
Funds or the Escrowed Shares.
(f) The Escrow Agent is authorized to disregard any and all
notices or instructions given it by Unique or the Shareholders, or by any other
person, firm or corporation, except only such notices or instructions as are
provided for herein or any order or process of any court with jurisdiction. If
any property held hereunder is at any time attached, garnished, or levied upon
under any court order or by federal, state or local taxing authorities, or in
case the payment, assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or in case any order,
judgment or decree shall be made or entered by any court affecting such property
or any part thereof, then and in any of such events, the Escrow Agent is
authorized to rely upon and comply with any such
order, writ, levy, judgment or decree which it is advised by legal counsel of
its own choosing is binding upon it; and if it complies with any such order,
writ, levy, judgement or decree, it shall not be liable to any of the parties
hereto, or any other person, firm or corporation, by reason of such compliance
even though such order, writ, levy, judgment or decree may be subse quently
reversed, modified, annulled, set aside or vacated.
(g) The Escrow Agent shall not be required or have a duty to
notify any person of any payment or the maturity of any security held hereunder
nor shall it be required to take any legal action to enforce payment of any
security held hereunder.
(h) The Escrow Agent shall not be responsible for the
sufficiency or accuracy of the form, execution, validity or genuineness of
documents or securities now or hereafter deposited hereunder, or of endorsement
thereon, or for any lack of endorse ment thereon, or for any description
therein, nor shall it be responsible or liable in any respect on account of the
identity, authority or rights of the persons executing or delivering or
purporting to execute or deliver any such document, security, endorsement or
escrow instructions.
(i) Upon the resignation of the Escrow Agent, the
Shareholders and Unique may jointly appoint a successor Escrow
Agent.
(8) Miscellaneous.
(a) This Escrow Agreement shall be governed by and construed
in accordance with the laws of the State of Colorado. The parties hereto consent
to the jurisdiction of the courts of the State of Colorado to resolve any
disputes hereunder.
(b) This Escrow Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, administrators,
representatives, successors and assigns.
(c) All notices and communications hereunder shall be in
writing and shall be deemed to be duly given if delivered in accordance with the
giving of notice requirements set forth in the Agreement.
(d) This Escrow Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
(e) All capitalized terms used in this Escrow Agreement which
are not otherwise defined herein shall have the meaning assigned to them in the
Agreement unless the context hereof otherwise requires.
IN WITNESS WHEREOF, the parties have signed this Escrow Agreement as of
the date first above written.
Unique: UNIQUE MOBILITY, INC.
By /s/_____________________
Shareholders:
/s/________________________
XXXXXX X. XXXX
/s/________________________
Xxxxx X. Xxxxxx
/s/________________________
Xxxxxx X. Xxxxxxx
/s/________________________
Xxxx X. Xxxxxx
Escrow Agent:
Norwest Bank Colorado, N.A.
By /s/_____________________
