Plan of Reorganization and Stock Exchange Agreement
by and among
Unistone, Inc.,
▇▇▇▇▇▇ Services, Inc.,
Corporate Capital Management, LLC,
Cash Systems, Inc.,
and
The Cash Systems Stockholders
October 12, 2001
Table of Contents
Page
ARTICLE I EXCHANGE OF STOCK. . . . . . . . . . . . . . . . . . .2
1.1 Transfer and Number of Shares. . . . . . . . . . . . .2
1.2 Exchange of Certificates, Stock Options and Warrants
by the Cash Systems Stockholders; and Amendment of
Cash Systems Notes . . . . . . . . . . . . . . . . . .2
1.3 Further Assurances . . . . . . . . . . . . . . . . . .2
1.4 Cancellation of Shares of Unistone . . . . . . . . . .2
1.5 Authority to Change Name . . . . . . . . . . . . . . .3
1.6 Rule 701 Shares. . . . . . . . . . . . . . . . . . . .3
1.7 Cash Systems, Inc. 2001 Stock Option Plan. . . . . . .3
1.8 Registration Rights. . . . . . . . . . . . . . . . . .3
1.9 Lock-up/Leak-Out Agreement . . . . . . . . . . . . . .4
1.10 Indemnification. . . . . . . . . . . . . . . . . . . .4
1.11 Resignations of Present Directors and Executive
Officers and Designation of New Directors and
Executive Officers. . . . . . . . . . . . . . . . . . 4
1.12 Assets and Liabilities of Unistone at Closing. . . . .4
1.13 No Reverse Splits for a Period of Two Years. . . . . .4
1.14 Limitations on other Registration Statements on Forms
S-8 or S-3 of the Commission . . . . . . . . . . . . .5
1.15 Present Outstanding Securities of Unistone and
Acceptance of Opinions of Counsel. . . . . . . . . . .5
1.16 Execution. . . . . . . . . . . . . . . . . . . . . . .5
1.17 Private Placement of Securities of the Reorganized
Unistone . . . . . . . . . . . . . . . . . . . . . . .5
1.18 Escrow of ▇▇▇▇▇▇'▇ Unistone Shares . . . . . . . . . .5
ARTICLE II REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . .6
2.1 Representations and Warranties of Unistone and ▇▇▇▇▇▇
Services . . . . . . . . . . . . . . . . . . . . . . .6
(a) Power and Authority . . . . . . . . . . . . . . .6
(b) Unistone Financial Statements . . . . . . . . . .6
(c) No Material Adverse Effect. . . . . . . . . . . .6
(d) Due Organization; Power; Qualification;
Subsidiaries and Affiliates, Etc. . . . . . . . .6
(e) Capitalization. . . . . . . . . . . . . . . . . .7
(f) Financial Information: No Material Adverse Change7
(g) Tax Matters.. . . . . . . . . . . . . . . . . . .8
(h) No Conflict or Default; Enforceability; Corporate
Records; Compliance with Law . . . . . . . . . . 8
(i) Party to Agreements . . . . . . . . . . . . . . .9
(j) Litigation. . . . . . . . . . . . . . . . . . . .9
(k) Securities Filings. . . . . . . . . . . . . . . .9
(l) Governmental and Other Approval . . . . . . . . .9
(m) Salaries. . . . . . . . . . . . . . . . . . . . 10
(n) Accrued Compensation; Benefits. . . . . . . . . 10
(o) Employee Benefit Plans. . . . . . . . . . . . . 10
(p) Material Contracts, Etc . . . . . . . . . . . . 10
(q) Title and Authority . . . . . . . . . . . . . . 10
(r) Financial Information: Contingent Liabilities . 10
(s) Insider Transactions. . . . . . . . . . . . . . 11
(t) Bankruptcy. . . . . . . . . . . . . . . . . . . 11
(u) Environmental . . . . . . . . . . . . . . . . . 11
(v) No Liquidation of Cash Systems. . . . . . . . . 11
(w) No Reacquisition of Unistone Shares . . . . . . 12
(x) No Prior Ownership of Cash Systems Shares . . . 12
(y) No Investment Company Parties . . . . . . . . . 12
2.2 Representations and Warranties of Cash Systems . . . 12
(a) Power and Authority . . . . . . . . . . . . . . 12
(b) Cash Systems Financial Statements . . . . . . . 12
(c) No Material Adverse Effect. . . . . . . . . . . 12
(d) Due Organization; Power; Qualification;
Subsidiaries and Affiliates, Etc. . . . . . . . 12
(e) Capitalization. . . . . . . . . . . . . . . . . 13
(f) Financial Information: No Material Adverse
Change. . . . . . . . . . . . . . . . . . . . . 13
(g) Tax Matters.. . . . . . . . . . . . . . . . . . 13
(h) No Conflict or Default; Enforceability;
Corporate Records; Compliance with Law. . . . . 14
(i) Party to Agreements . . . . . . . . . . . . . . 14
(j) Litigation. . . . . . . . . . . . . . . . . . . 15
(k) Governmental and Other Approval . . . . . . . . 15
(l) Salaries. . . . . . . . . . . . . . . . . . . . 15
(m) Accrued Compensation. . . . . . . . . . . . . . 15
(n) Employee Benefit Plans. . . . . . . . . . . . . 15
(o) Material Contracts, Etc.. . . . . . . . . . . . 16
(p) Title and Authority . . . . . . . . . . . . . . 16
2.3 Additional Representations and Warranties of Cash
Systems. . . . . . . . . . . . . . . . . . . . . . . 16
(a) No Issuance of Cash Systems Shares. . . . . . . 16
(b) No Investment Company Parties . . . . . . . . . 16
(c) No Dissenters . . . . . . . . . . . . . . . . . 16
(d) Fair Market Value of Assets . . . . . . . . . . 16
(e) No Compensation for Cash Systems Shares . . . . 16
2.4 Representations and Warranties of Cash Systems
Stockholders. . . . . . . . . . . . . . . . . . . . .17
(a) Power and Authority . . . . . . . . . . . . . . 17
(b) Due Organization; Power . . . . . . . . . . . . 17
(d) Governmental and Other Approval . . . . . . . . 18
(e) No Investment Company Parties . . . . . . . . . 18
(f) No Disposition of Unistone Shares . . . . . . . 18
ARTICLE III COVENANTS. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE IV CERTAIN COVENANTS . . . . . . . . . . . . . . . . . 20
4.1 Directors' Meeting . . . . . . . . . . . . . . . . . 20
4.2 Conduct of Business Pending the Reorganization . . . 20
4.3 Disclosure . . . . . . . . . . . . . . . . . . . . . 20
4.4 Recommendation of Approval . . . . . . . . . . . . . 21
4.5 Access . . . . . . . . . . . . . . . . . . . . . . . 21
4.6 No Solicitation. . . . . . . . . . . . . . . . . . . 21
ARTICLE V CONDITIONS . . . . . . . . . . . . . . . . . . . . . 21
5.1 Conditions to the Obligations of Unistone and ▇▇▇▇▇▇
Services. . . . . . . . . . . . . . . . . . . . . . .21
5.2 Conditions to the Obligations of Cash Systems and the
Cash Systems Stockholders . . . . . . . . . . . . . .23
ARTICLE VI INDEMNIFICATION . . . . . . . . . . . . . . . . . . 24
ARTICLE VII CLOSING DATE . . . . . . . . . . . . . . . . . . . 27
ARTICLE VIII POST-CLOSING MATTERS. . . . . . . . . . . . . . . 27
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 27
9.1 Termination. . . . . . . . . . . . . . . . . . . . . 27
9.2 Expenses . . . . . . . . . . . . . . . . . . . . . . 28
9.3 Brokers. . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Arbitration. . . . . . . . . . . . . . . . . . . . . 28
9.5 Other Actions. . . . . . . . . . . . . . . . . . . . 28
9.6 Entire Agreement; Waiver and Amendment . . . . . . . 28
9.7 Applicable Law . . . . . . . . . . . . . . . . . . . 29
9.8 Descriptive Headings . . . . . . . . . . . . . . . . 29
9.9 Notices. . . . . . . . . . . . . . . . . . . . . . . 29
9.10 Counterparts . . . . . . . . . . . . . . . . . . . . 30
9.11 Publicity. . . . . . . . . . . . . . . . . . . . . . 30
9.12 Gender; Number . . . . . . . . . . . . . . . . . . . 30
9.13 Schedules. . . . . . . . . . . . . . . . . . . . . . 30
9.14 Binding Effect . . . . . . . . . . . . . . . . . . . 30
COUNTERPART SIGNATURE PAGE . . . . . . . . . . . . . . . . . . 31
PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT
PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT (the
"Agreement") dated as of October 9, 2001, by and among Unistone, Inc., a
Delaware corporation ("Unistone"); ▇▇▇▇▇▇ Services, Inc., a Utah corporation
and the principal stockholder of Unistone ("▇▇▇▇▇▇ Services"); Corporate
Capital Management, LLC, a Minnesota limited liability ("CCM"); Cash Systems,
Inc., a Minnesota corporation ("Cash Systems"); and the Cash Systems common
stockholders, stock option holders, warrant holders and convertible note
holders (respectively, the "Cash Systems Founding Stockholders," the "Cash
Systems Stock Option Holders," the "Cash Systems Warrant Holders" and the
"Cash Systems Note Holders"), all of whom are listed in Schedule 1.1 hereto
and who execute and deliver a copy of this Agreement. The Cash Systems
Founding Stockholders, the Cash Systems Stock Option Holders, the Cash Systems
Warrant Holders and the Cash Systems Note Holders are sometimes collectively
referred to as the "Cash Systems Stockholders."
W I T N E S S E T H :
WHEREAS, the respective Board of Directors of Unistone and Cash
Systems (sometimes referred to collectively as the "Constituent Corporations"
or individually as a "Constituent Corporation"), ▇▇▇▇▇▇ Services, CCM and the
Cash Systems Stockholders deem it advisable that at the closing (the
"Closing") of the transactions contemplated hereby all of the Cash Systems
Founding Stockholders shall exchange all of their shares of Cash Systems
common stock, $0.001 par value (sometimes called the "Cash Systems Shares")
for shares of Unistone common stock, $0.001 par value per share (sometimes
called the "Unistone Shares"), in the manner and in such amount as is set
forth in Article I hereof and Schedule 1.1 and upon the terms and conditions
otherwise set forth in this Agreement (the "Reorganization") in order that
Cash Systems shall become a 100% subsidiary of Unistone upon consummation of
the Reorganization; and
WHEREAS, pursuant to the Reorganization and in accordance with
Article I hereof and Schedule 1.1 and upon the terms and conditions otherwise
set forth in this Agreement, the Cash Systems Stock Option Holders and the
Cash Systems Warrant Holders shall exchange their respective stock options and
warrants for like stock options and warrants to acquire Unistone Shares and
the Cash Systems Note Holders shall amend their Cash Systems notes so they are
convertible into Unistone Shares; and
WHEREAS, to effectuate the foregoing, the parties desire to adopt
a plan of reorganization in accordance with the provisions of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, the parties do hereby agree,
subject to the terms and conditions hereinafter set forth, as follows:
ARTICLE I
EXCHANGE OF STOCK
1.1 Transfer and Number of Shares. The Cash Systems Founding
Stockholders agree to transfer to Unistone at the closing (the "Closing") 100%
of the outstanding Cash Systems Shares listed in Schedule 1.1 hereto (the
"Cash Systems Shares"), in exchange for 10,550,000 Unistone Shares, pro rata,
also as outlined in Schedule 1.1; and the Cash Systems Stock Option Holders
and the Cash Systems Warrant Holders agree to exchange their respective stock
options and warrants for like stock options and warrants to acquire shares of
Cash Systems common stock (respectively, the "Stock Options" and the
"Warrants") to acquire Unistone Shares and the Cash Systems Note Holders agree
to have their notes (the "Notes") amended so that they are convertible into
Unistone Shares. At Closing, and excluding the securities to be exchanged for
the Cash Systems Shares, the outstanding securities of Unistone will amount to
1,100,000 shares of $0.001 par value common stock, after taking into account
the cancellation of 2,407,493 of the outstanding Unistone Shares that are
owned by ▇▇▇▇▇▇ Services as outlined in Article 1.4. Accordingly, assuming
that all Cash Systems Stockholders become party to the Agreement, there will
be 11,650,000 post-Reorganization outstanding shares of common stock of
Unistone, outstanding options to acquire 300,000 Unistone Shares, 321,000
outstanding warrants to acquire Unistone Shares, and Cash Systems Notes
convertible into 640,000 Unistone Shares, all as outlined in Schedule 1.1.
1.2 Exchange of Certificates, Stock Options and Warrants by the Cash
Systems Stockholders; and Amendment of Cash Systems Notes. The transfer of
the Cash Systems Shares, Stock Options and Warrants shall be effected by the
delivery to Unistone at the Closing of stock certificate or certificates and
stock option agreements and warrant certificates representing the transferred
shares, stock options and warrants duly endorsed in blank or accompanied by
stock powers executed in blank with all signatures witnessed or guaranteed to
the satisfaction of Unistone and with all necessary transfer taxes and other
revenue stamps affixed and acquired at the holders' expense. At the Closing,
each of the Cash Systems Note Holders shall execute an amendment to his Note
so that it is convertible into Unistone Shares. At the Closing, Unistone
shall deliver new stock option agreements and warrants to the Cash Systems
Stock Option Holders and Cash Systems Warrant Holders, respectively, and shall
deliver amendments to the Notes to the Cash Systems Note Holders. Unistone
shall also issue instructions to its transfer agent to issue certificates for
Unistone Shares to the Cash Systems Founding Stockholders.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Cash Systems Stockholders shall execute such additional
instruments and take such other action as Unistone may request in order to
exchange and transfer clear title and ownership in the Cash Systems Shares,
Stock Options and Warrants to Unistone and to amend the Notes.
1.4 Cancellation of Shares of Unistone. On the Closing, ▇▇▇▇▇▇
Services, in consideration of this Agreement and the Reorganization, agrees to
deliver to Unistone for cancellation, 2,407,493 of the 3,192,125 Unistone
Shares that are owned by it.
1.5 Authority to Change Name. At or simultaneous with the Closing,
Unistone shall amend its Articles of Incorporation to change its name to "Cash
Systems, Inc.," by the authority granted to the Board of Directors as
contained in the Articles of Amendment of Unistone duly adopted, executed and
filed with the Secretary of State of the State of Delaware on or about July
13, 2001. Cash Systems shall also change its name.
1.6 Rule 701 Shares. On Closing, to the extent applicable, Unistone
shall adopt, ratify and approve any rights, privileges and preferences of any
stockholders of Cash Systems relative to Cash Systems Shares lawfully issued
under Rule 701 of the Securities and Exchange Commission (the "Commission").
1.7 Cash Systems, Inc. 2001 Stock Option Plan. Subject to Article
1.14, effective on the Closing, Unistone shall adopt, ratify and assume the
"Cash Systems, Inc. 2001 Stock Option Plan" that reserves 1,000,000 shares for
issuance to employees, directors, executive officers and outside consultants
and the option grants made thereunder, a copy of which is set forth on
Schedule 1.7, and Unistone shall approve prior to the Closing resolutions
which exempt the options granted thereunder from liability under Section 16 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
1.8 Registration Rights. All pre-Agreement shares of common stock of
Unistone that have been held over one year that cannot be presently lawfully
publicly sold under Rule 144 and current applicable interpretations thereof by
the Commission, 1,200,000 Unistone Shares issued to Cash Systems Founding
Stockholders, all Unistone Shares issuable upon the exercise of options held
by the Cash Systems Stock Option Holders, all Unistone Shares issuable upon
the exercise of warrants held by the Cash Systems Warrant Holders, all
Unistone Shares issuable upon the conversion of the Notes, and all shares
issued in the private placement described in Section 1.17 (each person holding
such shares a "Selling Shareholder") shall be accorded "registration rights"
that require the reorganized Unistone, at its sole cost and expense, to file a
registration statement and resale prospectus (the "Registration Statement")
covering these shares with the Commission, which shall be filed within 150
days of the closing of a contemplated private placement of securities of the
reorganized Unistone as outlined in Section 1.17. Unistone will use its "best
efforts" to have the Commission declare this Registration Statement effective
within 180 days of such closing. Unistone shall take such steps as are
necessary to keep the Registration Statement effective until the earlier of
(i) the date that all Unistone Shares covered by the Registration Statement
have been sold or (ii) one year from the date of the closing of the private
placement described in Section 1.17. Unistone shall notify, as soon as
reasonably practicable, each Selling Shareholder of the discovery that the
Registration Statement, once declared effective by the Commission, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statement therein not
misleading and will use its "best efforts" to amend the Registration Statement
as expeditiously as possible. All Selling Shareholders shall refrain from
selling Unistone Shares pursuant to the Registration Statement upon the
receipt of such notice and until notified by Unistone that the Registration
Statement has been appropriately amended.
1.9 Lock-up/Leak-Out Agreement. All securities of Unistone that are
owned or controlled, directly or indirectly, by any of the persons that are
named in the Lock-Up/Leak-Out Agreement are subject to the Lock-up/Leak-out
Agreement attached hereto as Schedule 1.9 and incorporated herein by
reference, which Schedule contains a list of all parties thereto and Unistone
Shares held by them, which agreement shall be executed and delivered at the
Closing.
1.10 Indemnification. On Closing of the Agreement, $202,500 shall be
paid by Maricopa Equity Management Corp., a Minnesota corporation, to ▇▇▇▇▇▇
Services in consideration of ▇▇▇▇▇▇ Services' indemnification of Unistone,
Cash Systems and the Cash Systems Stockholders against any and all past
liabilities of any type or nature whatsoever of Unistone existing at the
Closing of the Agreement, which will include all expenses related to the
Agreement and the compromise and settlement of any amounts due and owing to
▇▇▇▇▇▇ Services for advances or otherwise that were incurred by Unistone in
this respect prior to the Closing of the Agreement.
1.11 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. On Closing and once the
Cash Systems Stockholders have been determined to be stockholders of record of
Unistone, the present directors and executive officers of Unistone shall
designate the directors and executive officers nominated by Cash Systems to
serve in their place and stead, until the next respective annual meetings of
the stockholders and the Board of Directors of the reorganized Unistone, and
until their respective successors shall be elected and qualified or until
their respective prior resignations or terminations, who shall be: ▇▇▇▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Director and Chief Financial Officer; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Director;
and ▇▇▇▇▇ ▇▇▇▇▇, Director and President and Chief Executive Officer, and then,
the current directors and executive officers shall resign, in seriatim. Prior
to the Closing, the Board of Directors of Unistone shall adopt resolutions
specified by Cash Systems directing the issuance Unistone Shares to the
principals of Cash Systems so that the issuance of such shares is exempt
liability under Section 16 of the Exchange Act.
1.12 Assets and Liabilities of Unistone at Closing. Unistone shall
have no material assets and no material liabilities at Closing, and all costs
incurred by Unistone incident to the Agreement shall have been paid or
satisfied.
1.13 No Reverse Splits for a Period of Two Years. The reorganized
Unistone shall not reverse split its post-Agreement common stock for a period
of two years from the Closing without the prior written consent of the current
Board of Directors of Unistone, except when (i) the reverse split is necessary
to comply with or maintain qualifications for listing on the NASDAQ Automated
Quotations System or any nationally recognized securities exchange; or when
(ii) the reverse split is in connection with the completion of a financing in
excess of $2,500,000, excluding the financing contemplated in Section 1.17
hereof; or when (iii) the reverse split is in connection with a merger or
reorganization (excluding a "reverse" reorganization or merger) having a value
of in excess of $5,000,000. In the event any reverse split is effected in
violation of this Article during this period of time without this consent, all
pre-Agreement common stockholders of Unistone who are still stockholders of
Unistone shall be immediately issued without further consideration additional
shares of Unistone common stock so that the reverse split will have had no
effect on the number of their pre-reverse split shares of Unistone common
stock that are still owned by any of such persons.
1.14 Limitations on other Registration Statements on Forms S-8 or S-3
of the Commission. No registration statements on Forms S-8 or S-3 of the
Commission shall be filed by the reorganized Unistone for a period of the
earlier of twelve months from the Closing of the Reorganization or 90 days
after the effective date of the reorganized Unistone's Registration Statement
without the prior written consent of the current Board of Directors of
Unistone.
1.15 Present Outstanding Securities of Unistone and Acceptance of
Opinions of Counsel. Neither Cash Systems, the directors and executive
officers to be nominated by Cash Systems nor Unistone shall contest the
validity of any of the pre-Agreement and pre-Reorganization outstanding
Unistone common stock; and Cash Systems, subject to concurrence by its legal
counsel with any such opinion, agrees to accept opinions covering the resale
of any of the Unistone securities in accordance with Rule 144 of the
Commission from ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.,
which opinions shall be paid for by the party requesting such opinions.
1.16 Execution. This Agreement will be deemed to be executed upon the
execution and delivery of the Agreement by Cash Systems Stockholders
collectively owning not less than 80% of the outstanding Cash Systems Shares
and Options representing 80% of the Cash Systems Shares subject to such
Options and by CCM and Equity Securities as holders of Notes and Warrants.
1.17 Private Placement of Securities of the Reorganized Unistone.
Unistone will use its "best efforts" to raise a minimum of $3,000,000 and a
maximum of $7,000,000 as soon as is reasonably practicable following the
Closing by the offer and sale of "restricted securities" in a private
placement (the "PPM") at an offering price per share price acceptable to Cash
Systems with "registration rights" which permit the investors to participate
in the Registration Statement, as provided in Section 1.8 hereof. Unistone
will use its "best efforts" to commence the PPM within 60 days of the Closing.
1.18 Escrow of ▇▇▇▇▇▇'▇ Unistone Shares. At the Closing, ▇▇▇▇▇▇
Services, CCM and/or ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ shall deliver
to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq. ("LWB"), an aggregate of 771,513 Unistone
Shares to be held and distributed by LWB in accordance with the Stock Escrow
Agreement attached hereto as Schedule 1.18, which agreement shall be executed
and delivered at the Closing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Unistone and ▇▇▇▇▇▇ Services.
Unistone and ▇▇▇▇▇▇ Services, jointly and severally, represent and warrant to
Cash Systems and the Cash Systems Stockholders, as follows:
(a) Power and Authority. Each of Unistone and ▇▇▇▇▇▇ Services
has the corporate power and authority, to enter into this Agreement and to
carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the Board of Directors of Unistone and ▇▇▇▇▇▇ Services
and no other corporate proceedings on the part of Unistone or ▇▇▇▇▇▇ Services
are necessary to authorize this Agreement and the transactions contemplated
hereby. No stockholder approval of the Agreement or the Reorganization is
required the Delaware General Corporation Law.
(b) Unistone Financial Statements. Unistone has heretofore
delivered to Cash Systems its audited Balance Sheet and Income Statements for
the fiscal year ended December 31, 2000 (the "2000 Statements") and its
Balance Sheet and Income Statement for the six month period ended June 30,
2001 (the "June Balance Sheet"). As of the respective dates of the 2000
Statements and the June Balance Sheet (collectively, the "Financial
Statements"), the Financial Statements did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(c) No Material Adverse Effect. Except as set forth in Schedule
2.1(c), since June 30, 2001, there has not been any material adverse change in
the business, operations, properties, assets, condition, financial or
otherwise, or prospects of Unistone.
(d) Due Organization; Power; Qualification; Subsidiaries and
Affiliates, Etc.
(i) Each of Unistone and ▇▇▇▇▇▇ Services is a corporation
duly organized, validly existing, and in good standing under the
laws of the state of their respective states of incorporation and
has the corporate power to own its property and to carry on its
business as now conducted. The nature of the business now
conducted by Unistone, the character of the property owned by it,
or any other state of facts does not require Unistone to be
qualified to do business as a foreign corporation in any
jurisdiction. Unistone does not conduct and never has conducted,
any active trade or business.
(ii) Except as set forth in Schedule 2.1(d), Unistone has
no subsidiaries or affiliates (as that term is used in the
regulations promulgated under the Securities Act of 1933, as
amended (the "Securities Act")).
(e) Capitalization.
(i) The total authorized capital stock of Unistone
consists of 50,000,000 shares of common stock ($0.001 par value)
as of the date hereof and as of the Closing Date. As of the date
hereof 3,507,493 Unistone Shares represent all of the issued and
outstanding stock of Unistone. As of the Closing Date, 1,100,000
Unistone Shares shall represent all of the issued and outstanding
capital stock of Unistone. All of the outstanding Unistone Shares
have been, and all of the outstanding Unistone Shares as of the
Closing Date will be, duly authorized and validly issued and are
fully paid and non-assessable. None of the outstanding Unistone
Shares are subject to pre-emptive rights or were issued in
violation of any pre-emptive rights.
(ii) Except as set forth on Schedule 2.1(e)(ii) or as
contemplated in the confidential private placement memorandum to
be utilized in the PPM or Article I hereof, there are no present
and on the Closing Date there will be no outstanding
subscriptions, options, warrants, contracts, calls, puts,
agreements, demands or other commitments or rights of any type to
purchase or acquire any securities of Unistone, nor are there
outstanding securities of Unistone which are convertible into or
exchangeable for any shares of capital stock of Unistone, and
Unistone has no obligation of any kind to issue any additional
securities.
(f) Financial Information: No Material Adverse Change.
(i) Unistone has furnished to Cash Systems the Financial
Statements. The Financial Statements have been prepared in
accordance with generally accepted accounting principles, and
fairly present in all material respects, the financial condition
of Unistone as at the respective dates thereof, and the results of
operation of Unistone for the periods then ended.
(ii) Since June 30, 2001, there has been no material
adverse change in the business or financial condition or the
operations of Unistone except as set forth on Schedule 2.1(f).
(iii) At June 30, 2001, there were no liabilities, unknown,
accrued, absolute, contingent or otherwise of Unistone that were
not shown or reserved against on the balance sheets included in
the Financial Statements, except obligations under the contracts
shown on or as otherwise disclosed in Schedule 2.1(f). As of the
Closing Date, Unistone has no assets or liabilities of any kind,
whether known or unknown, accrued, absolute, contingent or
otherwise.
(iv) Since June 30, 2001, Unistone has not sold or
otherwise disposed of or encumbered any of the properties or
assets reflected on the Financial Statements, or other assets
owned or leased by it, except in the ordinary course of business,
or otherwise disclosed on Schedule 2.1(f).
(g) Tax Matters.
(i) Unistone has filed or caused to be filed with the
appropriate Federal, state, county, local and foreign governmental
agencies or instrumentalities, all tax returns and tax reports
required to be filed, and all taxes, assessments, fees and other
government charges have been fully paid when due (subject to any
extensions filed on a timely basis).
(ii) There is not pending nor, to the best knowledge of
Unistone or ▇▇▇▇▇▇ Services, is there any threatened Federal,
state or local tax audit of Unistone. There is no agreement with
any Federal, state or local taxing authority by Unistone that may
affect the subsequent tax liabilities of Unistone.
(iii) Without limiting the foregoing: (a) the Financial
Statements include adequate provisions for all taxes, assessments,
fees, penalties and governmental charges which have been or in the
future may be assessed against Unistone with respect to the period
then ended and all periods prior thereto; and (b) on the date
hereof, Unistone is not liable for any taxes, assessments, fees
or governmental charges.
(h) No Conflict or Default; Enforceability; Corporate Records;
Compliance with Law. Except as set forth on Schedule 2.1(h), neither the
execution and delivery of this Agreement, nor compliance with the terms and
provisions hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute, regulation or
ordinance of any governmental authority, or conflict with or result in the
material breach of any term, condition or provision of the Articles of
Incorporation, Certificate of Incorporation, By-laws or other charter
documents of Unistone or ▇▇▇▇▇▇ Services, nor of any agreement, deed,
contract, mortgage, indenture, writ, order, decree, legal obligation or
instrument to which Unistone or ▇▇▇▇▇▇ Services is a party or by which any of
them or any of their assets or properties are or may be bound; or constitute a
material default (or an event which, with the lapse of time or the giving of
notice, or both, would constitute a material default) thereunder, nor result
in the creation or imposition or any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any properties or assets
of Unistone or ▇▇▇▇▇▇ Services, nor give to others any interest or rights,
including rights of termination, acceleration or cancellation in or with
respect to any of the properties, assets, contracts or business of Unistone or
▇▇▇▇▇▇ Services. This Agreement and all other agreements and documents
delivered by Unistone or ▇▇▇▇▇▇ Services in connection herewith have been duly
executed and delivered by Unistone and ▇▇▇▇▇▇ Services and constitute the
binding obligations of Unistone and ▇▇▇▇▇▇ Services enforceable in accordance
with their respective terms. Unistone has permitted Cash Systems to examine
Unistone's corporate minute and stock records books. The corporate minute
books contain the Articles of Incorporation, Certificate of Incorporation,
By-laws and other charter documents of Unistone as in effect on the date
hereof, contain a true and complete record of all actions by and meetings of
the directors (and committees thereof) and stockholders of Unistone since the
date of its incorporation and accurately reflect all transactions referred to
therein. Unistone is not in violation of any outstanding arbitration award,
judgment, order or decree; or in violation of any statute, regulation or
ordinance ("Law"), including, but not limited to, any anti-discrimination,
hazardous and toxic substances, wage, hour, working condition, payroll
withholding, pension, building, zoning and tax Law. There have been no
allegations of or inquiries concerning any violations of Law by Unistone
within the past ten years.
(i) Party to Agreements. Except as set forth on Schedule
2.1(i), Unistone is not a party to any contract or other arrangement other
than this Agreement.
(j) Litigation. There are no actions, suits, investigations, or
proceedings pending, nor, to the knowledge of Unistone and ▇▇▇▇▇▇ Services,
threatened against Unistone, the performance of the terms and conditions
hereof, or the consummation of the transactions contemplated hereby, in any
court or by or before any governmental body or agency, including without
limitation any claim, proceeding or litigation for the purpose of challenging,
enjoining or preventing the execution, delivery or consummation of this
Agreement. Unistone is not subject to any order, judgment, decree,
stipulation or consent or any agreement issued by any governmental body or
agency.
(k) Securities Filings. The common stock of Unistone is listed
on the NASD OTC Electronic Bulletin Board. Unistone has heretofore provided
to Cash Systems true and correct copies of its annual report on Form 10-KSB
for the year ended December 31, 2000, and its quarterly reports on Form 10Q-SB
dated June 30, 2000, September 30, 2000, March 31, 2001 and June 30, 2001.
All such reports are true, correct and accurate as of the dates of filing and
do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except as disclosed on Schedule 2.1(k), no material adverse
change in the business, financial condition or operations of Unistone has
occurred since the date of such reports. Unistone will have on the Closing
Date, and thereafter, made all filings required to be made by Unistone with
the Commission and any state securities authorities. Unistone will be able to
register all of the Unistone Shares described in Section 1.8 hereof on Form
SB-2 of the Commission as provided in said Section, neither Unistone nor
▇▇▇▇▇▇ Services knows of any reason why the Registration Statement described
in Section 1.8 shall not be declared effective by the Commission and any
Unistone Shares issued to or issuable to the Cash Systems Stockholders will be
tradable under Rule 144 of the Commission one-year after the Closing.
(l) Governmental and Other Approval. Unistone has all permits,
licenses, orders and approvals of all federal, state, local or foreign
governmental or regulatory bodies required for Unistone to conduct its
business as presently conducted. All such permits, licenses, orders and
approvals are in full force and effect and no suspension or cancellation of
any of them is threatened, and none of such permits, licenses, orders or
approvals will be affected by the consummation of the transactions
contemplated by this Agreement. No approval or authorization of or filing with
any governmental authority, including the Commission, or any other person or
entity on the part of Unistone or ▇▇▇▇▇▇ Services is required as a condition
to the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby other than the filing of any documents
contemplated by this Agreement. Neither Unistone nor ▇▇▇▇▇▇ Services knows of
any reason why the NASD will not permit Unistone to register its shares for
trading on any other market or exchange operated by the NASD.
(m) Salaries. There is set forth on Schedule 2.1(m) annexed
hereto and made a part hereof, a true and complete list, as of the date of
this Agreement, of all of the persons who are employed by Unistone, together
with their compensation (including bonuses) for the calendar year ended
December 31, 2000, and the rate of compensation (including bonus arrangements)
currently being paid to each such employee.
(n) Accrued Compensation; Benefits. Unistone does not have any
outstanding liability for payment of wages, vacation pay (whether accrued or
otherwise), salaries, bonuses, pensions or contributions and does not have any
responsibility for providing medical insurance or medical benefits under any
labor or employment contract, whether oral or written, or pursuant to any law,
rule or regulation or by reason of any past practices with respect to its
current or former officers, directors or employees based upon or accruing with
respect to services of its present or former officers, directors or employees.
(o) Employee Benefit Plans. Except as set forth on Schedule
2.1(o), Unistone does not have, maintain or contribute to and never has had,
maintained or contributed to, any pension plan, profit sharing plan or
employee's savings plan, and is not otherwise subject to any applicable
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
(p) Material Contracts, Etc. Schedule 2.1(p) contains an
accurate list of all contracts, commitments, leases, instruments, agreements,
licenses or permits, written or oral, to which Unistone is a party or by which
it or its properties are bound (including without limitation contracts with
customers, joint venture or partnership agreements, contracts with any labor
organizations, employment agreements, consulting agreements, loan agreements,
indemnity or guaranty agreements, bonds, mortgages, options to purchase land,
liens, pledges or other security agreements).
(q) Title and Authority. The shareholders as listed in Schedule
2.1(q) are together the holders of record and, to the knowledge of Unistone,
the sole beneficial owners, of all of the outstanding Unistone Shares.
Schedule 2.1(q) shall not be deemed to be a publicly available Schedule to
this Agreement.
(r) Financial Information: Contingent Liabilities.
(i) At June 30, 2001, there were no liabilities, unknown,
accrued, absolute, contingent or otherwise of Unistone that were
not shown or reserved against on the balance sheets included in
the Financial Statements, except obligations under the contracts
shown on Schedule 2.1(r).
(ii) Since June 30, 2001, Unistone has not sold or
otherwise disposed of or encumbered any of the properties or
assets reflected on the Financial Statements, or otherwise owned
or leased by it, except in the ordinary course or business, or as
otherwise disclosed on Schedule 2.1(r).
(s) Insider Transactions. All transactions between Unistone and
its employees, officers, directors and shareholders, and between Unistone and
▇▇▇▇▇▇ Services and the employees, officers, directors and shareholders of
▇▇▇▇▇▇ Services, including the issuance of Unistone Shares and the reverse
stock splits completed by Unistone, have been made on an arm's length basis on
terms and conditions comparable to what Unistone would have given to unrelated
third parties. No director, officer or employee of Unistone or ▇▇▇▇▇▇
Services has any claim of any nature against Unistone.
(t) Bankruptcy. Unistone filed for bankruptcy under Chapter 7
of the U.S. Bankruptcy Code on April 30, 1993, which bankruptcy was discharged
on April 1, 1994. All of the debts of Unistone listed on the Voluntary
Petition have either been discharged, paid in full or settled or the
appropriate statute of limitations on such debt has expired.
(u) Environmental. There are no environmental liens, actions or
proceedings, nor is there any cause for any such lien, action or proceeding
related to the business operations of Unistone. There are no substances or
conditions which may support a claim or cause of action against Unistone or
any of Unistone' current or former officers, directors, agents or employees,
whether by a governmental agency or body, private party or individual, under
any Law or Hazardous Materials Regulations. "Hazardous Materials" means any
oil or petrochemical products, PCB's, asbestos, urea formaldehyde, flammable
explosives, radioactive materials, solid or hazardous wastes, chemicals, toxic
substances or related materials, including, without limitation, any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials" or "toxic substances" under any applicable
federal or state laws or regulations. "Hazardous Materials Regulations" means
any regulations governing the use, generation, handling, storage, treatment,
disposal or release of hazardous materials, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conversation and Recovery Act and the Federal Water Pollution Control
Act.
(v) No Liquidation of Cash Systems. Unistone has no plan or
intention to (i) liquidate Cash Systems, (ii) merge Cash Systems into any
other corporation, (iii) cause Cash Systems to sell or otherwise dispose any
of its assets, except for dispositions made in the ordinary course of
business, or (iv) sell or otherwise dispose of any of the Cash Systems Shares
acquired pursuant to this Agreement.
(w) No Reacquisition of Unistone Shares. Unistone has no plan
or intention to reacquire any of the Unistone Shares issued pursuant to this
Agreement.
(x) No Prior Ownership of Cash Systems Shares. Unistone does
not own, directly or indirectly, nor has it owned during the past five (5)
years, directly or indirectly, any Cash Systems Shares.
(y) No Investment Company Parties. Neither Unistone nor ▇▇▇▇▇▇
Services is an "investment company" as defined in IRC Sections
368(a)(2)(F)(iii) and (iv).
(z) The representation and warranties contained herein do not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein in light of the
circumstances under which they were made, not misleading.
(aa) All representations and warranties by Unistone and ▇▇▇▇▇▇
Services made herein and in the Schedules attached hereto and all information
provided by Unistone and ▇▇▇▇▇▇ Services for use in the PPM and the
Registration Statement shall be true and correct in all material respects when
made.
2.2 Representations and Warranties of Cash Systems. Cash Systems
represents and warrants to Unistone as follows:
(a) Power and Authority. Cash Systems has the corporate power
and authority to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by the Board
of Directors of Cash Systems, and, no other corporate proceedings on the part
of Cash Systems are necessary to authorize this Agreement and the transactions
contemplated hereby.
(b) Cash Systems Financial Statements. Cash Systems has
heretofore delivered to Unistone its audited financial statements for the
years ended December 31, 2000 and 1999 (the "Cash Systems Financial
Statements"). The Cash Systems Financial Statements did not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(c) No Material Adverse Effect. Except as set forth on Schedule
2.2(c), since June 30, 2001 there has not been any material adverse change in
the business, operations, properties, assets, condition, financial or
otherwise of Cash Systems.
(d) Due Organization; Power; Qualification; Subsidiaries and
Affiliates, Etc.
(i) Cash Systems is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Minnesota and has the corporate power to own its property and to
carry on its business as now conducted. Cash Systems is qualified
to do business as a foreign corporation in each jurisdiction where
the failure to qualify would have a material adverse effect on
Cash Systems.
(ii) Cash Systems has no subsidiaries (as that term is used
in the regulations promulgated under the Securities Act).
(e) Capitalization.
(i) The total authorized capital stock of Cash Systems
consists of 52,000,000 shares of capital stock, of which
50,000,000 shares are common stock, $.01 par value per share, of
which 10,550,000 shares are issued and outstanding as of the date
hereof, and 2,000,000 shares are preferred stock, no par value,
none of which are issued and outstanding as of the date hereof.
Except as set forth on Schedule 2.2(e)(i), all the outstanding
Cash Systems Shares have been duly authorized and validly issued,
and are fully paid and non-assessable.
(ii) There are no present and on the Closing Date there
will be no outstanding options, warrants, convertible securities
or rights which may require Cash Systems to issue additional
shares of its capital stock other than as listed on Schedule
2.2(e)(ii).
(f) Financial Information: No Material Adverse Change.
(i) At June 30, 2001, there were no material liabilities,
absolute or contingent of Cash Systems that were not shown or
reserved against on the balance sheets included in the Cash
Systems Financial Statements, except obligations under the
contracts shown on or as otherwise disclosed in Schedule
2.2(f)(i).
(ii) Since June 30, 2001, Cash Systems has not sold or
otherwise disposed of or encumbered any of the properties or
assets reflected on the Cash Systems Financial Statements, or
other assets owned or leased by it, except in the ordinary course
of business or as otherwise disclosed on Schedule 2.2(f)(ii).
(g) Tax Matters.
(i) Cash Systems has filed or caused to be filed with the
appropriate federal, state, county, local and foreign governmental
agencies or instrumentalities all tax returns and tax reports
required to be filed, and all taxes, assessments, fees and other
governmental charges have been fully paid when due (subject to any
extensions filed on a timely basis).
(ii) There is not pending nor, to the best knowledge of
Cash Systems, is there any threatened federal, state or local tax
audit of Cash Systems. There is no agreement with any federal,
state or local taxing authority that may affect the subsequent tax
liabilities of Cash Systems.
(iii) Without limiting the foregoing: (a) the Cash Systems
Financial Statements include adequate provisions for all taxes,
assessments, fees, penalties and governmental charges which have
been or in the future may be assessed against Cash Systems with
respect to the period then ended and all periods prior thereto;
and (b) Cash Systems is not, on the date hereof, liable for any
taxes, assessments, fees or governmental charges.
(h) No Conflict or Default; Enforceability; Corporate Records;
Compliance with Law. Except as set forth on Schedule 2.2(h), neither the
execution and delivery of this Agreement, nor compliance with the terms and
provisions hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute, regulation or
ordinance of any governmental authority, or conflict with or result in the
material breach of any term, condition or provision of the Certificate of
Incorporation or By-laws of Cash Systems, nor of any agreement, deed,
contract, mortgage, indenture, writ, order, decree, legal obligation or
instrument to which Cash Systems is a party or by which it or any of its
respective assets or properties are or may be bound; or constitute a material
default (or an event which, with the lapse of time or the giving of notice, or
both, would constitute a material default) thereunder, nor result in the
creation of imposition of any lien, charge or encumbrance, or restriction of
any nature whatsoever with respect to any properties or assets of Cash
Systems, nor give to others any interest of rights, including rights of
termination, acceleration or cancellation in or with respect to any of the
properties, assets, contracts or business of Cash Systems. This Agreement and
each other agreement and document delivered by Cash Systems in connection
herewith have been duly executed and delivered by Cash Systems and constitute
the binding obligations of Cash Systems enforceable in accordance with their
respective terms. Cash Systems has permitted Unistone to examine Cash
Systems's corporate minute and stock records books. The corporate minute
books contain the Articles of Incorporation, Certificate of Incorporation,
By-laws and other charter documents of Cash Systems as in effect on the date
hereof and a true and complete record of all actions by and meetings of the
directors (and committees thereof) and stockholders of Cash Systems and
accurately reflect all transactions referred to therein. Except as set forth
on Schedule 2.2(h), Cash Systems is not in violation of any outstanding
arbitration award, judgment, order or decree; or in violation of any Law,
including, but not limited to, any anti-discrimination, hazardous and toxic
substances, wage, hour, working condition, payroll withholding, pension,
building, zoning and tax Law. There have been no allegations of or inquiries
concerning any violations of Law by Cash Systems within the past three years.
(i) Party to Agreements. Except as set forth on Schedule
2.2(i), Cash Systems is not a party to any contract or other arrangement
except those made in the ordinary course of business or which are terminable
on the giving of sixty (60) days' (or less) notice of Cash Systems's intent to
terminate such contract. Except as set forth on Schedule 2.2(i), Cash Systems
is not in default in any material respect under any contract or agreement to
which it is a party or by which it or any of its assets is or may be bound.
(j) Litigation. Except as set forth on Schedule 2.2(j), there
are no actions, suits, investigations, or proceedings pending, nor, to the
knowledge of Cash Systems, threatened, against Cash Systems, the performance
of the terms and conditions hereof, or the consummation of the transactions
contemplated hereby, in any court or by or before any governmental body or
agency, including without limitation any claim, proceeding or litigation for
the purpose of challenging, enjoining or preventing the execution, delivery or
consummation of this Agreement. Cash Systems is not subject to any order,
judgment, decree, stipulation or consent or any agreement with any
governmental body or agency which affects its business or operations.
(k) Governmental and Other Approval. To the best of its
knowledge, Cash Systems has all permits, licenses, orders and approvals of all
federal, state, local or foreign governmental or regulatory bodies required
for Cash Systems to conduct its business as presently conducted. Except as
set forth on Schedule 2.2(k), all such permits, licenses, orders and approvals
are in full force and effect and no suspension or cancellation of any of them
is threatened, and none of such permits, licenses, orders of approvals will be
affected by the consummation of the transactions contemplated by this
Agreement. Except as set forth on Schedule 2.2(k), no approval or
authorization of or filing with any governmental authority or any other person
or entity on the part of Cash Systems is required as a condition to the
execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby other than the filing of documents
contemplated by this Agreement.
(l) Salaries. There is set forth on Schedule 2.2(l) annexed
hereto and made a part hereof, a true and complete list, as of the date of
this Agreement, of all the persons who are both currently employed by Cash
Systems together with their compensation (including bonuses) for the calendar
year ended December 31, 2000 and the rate of compensation (including bonus
arrangements) currently being paid to each such employee.
(m) Accrued Compensation. Cash Systems does not have any
outstanding liability for payment of wages, vacation pay (whether accrued or
otherwise), salaries, bonuses, pensions or contributions under any labor or
employment contract, whether oral or written or by reason of any past
practices with respect to such employees based upon or accruing with respect
to services of present or former employees of Cash Systems, except as
disclosed in Schedule 2.2(m).
(n) Employee Benefit Plans. Cash Systems does not have,
maintain or contribute to, and never has had, maintained or contributed to,
any pension plan, profit sharing plan or employees' savings plan, and Cash
Systems is not otherwise subject to any applicable provisions of ERISA except
as set forth on Schedule 2.2(n).
(o) Material Contracts, Etc. Schedule 2.2(o) contains an
accurate list of all contracts, commitments, leases, instruments, agreements,
licenses or permits, written or oral, to which Cash Systems is a party or by
which it or its properties are bound (including without limitation contracts
with customers, joint venture or partnership agreements, contracts with any
labor organizations, employment agreements, consulting agreements, loan
agreements, indemnity or guaranty agreements, bonds, mortgages, options to
purchase land, liens, pledges or other security agreements) that (i) may give
rise to obligations or liabilities exceeding $10,000, (ii) generate revenues
or income exceeding $10,000, or (iii) to which Cash Systems and any affiliate
of Cash Systems is a party or any officer, director or shareholder of Cash
Systems is a party, exclusive of any contracts relating to the operation of an
ATM (collectively, the "Material Contracts").
(p) Title and Authority. The shareholders as listed in Schedule
2.2(p) are together the holders of record and, to the knowledge of Cash
Systems, the sole beneficial owners of all of the outstanding shares of Cash
Systems capital stock being exchanged pursuant to this Agreement.
(q) The representation and warranties contained herein do not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein in light of the
circumstances under which they were made, not misleading.
(r) All of the representations and warranties of Cash Systems
made herein and in the Schedules attached hereto and all information provided
by Cash Systems for use in the PPM and the Registration Statement shall be
true and correct in all material respects when made.
2.3 Additional Representations and Warranties of Cash Systems. Cash
Systems represents and warrants to the Cash Systems Stockholders as follows:
(a) No Issuance of Cash Systems Shares. Cash Systems has no
plan or intention to issue additional Cash Systems Shares that would result in
Unistone losing control of Cash Systems within the meaning of IRC Section
368(c)(i).
(b) No Investment Company Parties. Cash Systems is not an
"investment company" as defined in IRC Sections 368(a)(2)(F)(iii) and (iv).
(c) No Dissenters. There will be no stockholders of Cash
Systems entitled to prevail in any action to obtain dissenter's rights under
the Minnesota General Corporation Law.
(d) Fair Market Value of Assets. The fair market value of Cash
Systems's assets exceeds the sum of its liabilities plus the liabilities, if
any, to which the assets are subject.
(e) No Compensation for Cash Systems Shares. None of the
compensation received by any stockholder-employee of Cash Systems will be
separate consideration for, or allocable to, any of Cash Systems Shares owned
by any of them, none of the Unistone Shares received by any
stockholder-employee of Cash Systems will be separate consideration for, or
allocable to, any employment agreement, and the compensation paid to any
stockholder of Cash Systems will be for services actually rendered and will be
commensurate with amounts paid to third parties bargaining at arms' length for
similar services.
2.4 Representations and Warranties of Cash Systems Stockholders. Each
Cash Systems Stockholder, with respect to, for and on behalf of itself only,
represents and warrants to Unistone as follows:
(a) Power and Authority. The Cash Systems Stockholder, if it is
an entity, has the corporate (or other applicable entity) power and authority,
and the Cash Systems Stockholder, if it is an individual, has the capacity and
authority, to enter into this Agreement and carry out his or its obligations
hereunder. The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly authorized by the Board
of Directors (or other appropriate entity governing body) of the Cash Systems
Stockholder, if it is an entity, and no other corporate (or other applicable
entity) proceedings on the part of such Cash Systems Stockholder who is an
entity are necessary to authorize this Agreement and the transactions
contemplated hereby.
(b) Due Organization; Power. The Cash Systems Stockholder, if
it is an entity, is a corporation (or other appropriate entity) duly
organized, validly existing, and in good standing under the laws of their
respective states of incorporation (or other appropriate formation) and has
the corporate (or other appropriate entity) power to own its property and to
carry on its business as now conducted.
(c) No Conflict or Default; Enforceability. Neither the
execution and delivery of this Agreement, nor compliance with the terms and
provisions hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute, regulation or
ordinance of any governmental authority, or conflict with or result in the
material breach of any term, condition or provision of the Articles of
Incorporation, Certificate of Incorporation, By-laws or other charter
documents of the Cash Systems Stockholder, if it is an entity, nor of any
agreement, deed, contract, mortgage, indenture, writ, order, decree, legal
obligation or instrument to which the Cash Systems Stockholder is a party or
by which he or it or any of his or its assets or properties are bound; or
constitute a material default (or an event which, with the lapse of time or
the giving of notice, or both, would constitute a material default)
thereunder, nor result in the creation or imposition of any lien, charge or
encumbrance, or restriction of any nature whatsoever with respect to any
properties or assets of the Cash Systems Stockholder, nor give to others any
interest or rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets, contracts or
business of the Cash Systems Stockholder. This Agreement and each other
agreement and document delivered by the Cash Systems Stockholder in connection
herewith have been duly executed and delivered by such Cash Systems
Stockholder and constitute the binding obligations of such Cash Systems
Stockholder enforceable in accordance with their respective terms.
(d) Governmental and Other Approval. No approval or
authorization of or filing with any governmental authority or any other person
or entity on the part of the Cash Systems Stockholder is required as a
condition to the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby other than the filing of any documents
of any document contemplated by this Agreement.
(e) No Investment Company Parties. The Cash Systems Stockholder
is not an "investment company" as defined in IRC Sections 368(a)(2)(F)(iii)
and (iv).
(f) No Disposition of Unistone Shares. There is no plan or
intention by the Cash Systems Stockholders to sell, exchange, or otherwise
dispose of a number of Unistone Shares that would reduce the Cash Systems
Stockholders' ownership of Unistone Shares to a number having a value, as of
the Closing Date, of less than fifty percent (50%) of the value of all of the
outstanding capital stock of Cash Systems outstanding as of the Closing Date.
ARTICLE III
COVENANTS
3.1 Cash Systems agrees that prior to the Closing Date:
(a) Except as set forth on Schedule 3.1, no dividend shall be
declared or paid by other distribution (whether in cash, stock, property or
any combination thereof) or payment declared or made in respect to Cash
Systems Shares, nor shall Cash Systems purchase, acquire or redeem or split,
combine or reclassify any shares of its capital stock unless prior to the
record date for such dividend or the effective date of such split, combination
or reclassification, it tenders to Unistone its agreement to amend this
Agreement so as to effect an appropriate adjustment in the number of shares
deliverable upon the Effective Time.
(b) Except for such option grants to existing or prospective
employees and consultants as may be contemplated by the Cash Systems Financial
Statements or the PPM (including the capitalization chart set forth therein),
no change shall be made in the number of shares of authorized or issued Cash
Systems Shares; nor shall any option, warrant, call, right, commitment or
agreement of any character be granted or made by Cash Systems relating to its
authorized or issued Cash Systems Shares; nor shall Cash Systems issue, grant
or sell any securities or obligations convertible into or exchangeable for
shares of Cash Systems Shares.
(c) Cash Systems will not take, agree to take, or knowingly
permit to be taken any action or do or knowingly permit to be done anything in
the conduct of the business of Cash Systems or otherwise, which would be
contrary to or in breach of any of the terms or provisions of this Agreement,
or which would cause any of Cash Systems's representations contained herein to
be or become untrue in any material respect at the Closing Date.
(d) Except as set forth on Schedule 3.1(d) or as contemplated by
Article I hereof, Cash Systems will not (i) incur any indebtedness for
borrowed money; (ii) assume, guarantee, endorse, or otherwise become liable or
responsible (whether directly, contingently or otherwise) for the obligations
of any other individual, firm or corporation, or (iii) make any loans,
advances or capital contributions to or investments in, any other individual,
firm or corporation in excess of $100,000, except with the consent of Unistone
which consent shall not be unreasonably withheld.
(e) Except as set forth on Schedule 3.1(e) or as contemplated in
the Cash Systems Financial Statements or the PPM, Cash Systems will not make,
alter or change any employment or other contract with any of its personnel or
make, adapt, alter, revise, or amend any pension, bonus, profit-sharing or
other employee benefit plan, or grant any salary increase or bonus to any
person without the prior written consent of Unistone, except for normal
year-end or anniversary salary adjustments for employees, excluding officers,
except with the consent of Unistone which consent shall not be unreasonably
withheld.
3.2 Unistone agrees that prior to the Closing Date:
(a) No dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or payment
declared or made in respect of Unistone Shares, nor shall Unistone purchase,
acquire or redeem or split, combine or reclassify any shares of its capital
stock.
(b) Except as contemplated by the PPM or as set forth in Article
1 hereof, no change shall be made in the number of authorized or issued
Unistone Shares (other than pursuant to this Agreement); nor shall any option,
warrant, call, right, commitment or agreement (other than this Agreement) of
any character be granted or made by Unistone relating to its authorized or
issued Unistone Shares; nor shall Unistone issue, grant or sell any securities
or obligations convertible into or exchangeable for Unistone Shares.
(c) Unistone will not take, agree to take, or knowingly permit
to be taken any action, nor do or knowingly permit to be done anything in the
conduct of the business of Unistone or otherwise, which would be contrary to
or in breach of any of the terms or provisions of this Agreement, or which
would cause any of Unistone's representations and warranties contained herein
to be or become untrue in any material respect at the Closing Date including
without limitation amending Unistone's charter documents and By-laws, except
as otherwise provided hereby.
(d) Except as contemplated by Article I, Unistone nor will not
(i) incur any indebtedness for borrowed money; (ii) assume, guarantee,
endorse, or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other individual, firm
or corporation; or (iii) make any loans, advances or capital contributions to
or investments in, any other individual, firm or corporation.
(e) Unistone will not make, alter or change any employment or
other contract with any of its management personnel or make, adopt, alter,
revise, or amend any pension, bonus, profit-sharing or other employee benefit
plan, or grant any salary increase or bonus to any person without the prior
written consent of Cash Systems, except for normal year end or anniversary
salary adjustments for employees, excluding officers.
3.3 Each party to this Agreement agrees that the fair market value of
the Unistone Shares received by each Cash Systems Stockholder pursuant to this
Agreement will be approximately equal to the fair market value of the Cash
Systems Shares surrendered by such Cash Systems Stockholder in the exchange.
ARTICLE IV
CERTAIN COVENANTS
4.1 Directors' Meeting. Each of Cash Systems, Unistone and ▇▇▇▇▇▇
Services will take all actions necessary in accordance with applicable law and
its Certificate of Incorporation and By-laws to convene a meeting or obtain
the written consent of its directors as promptly as practicable to consider
and vote upon the approval of the transactions contemplated by this Agreement.
4.2 Conduct of Business Pending the Reorganization. Prior to the
effective date of the Reorganization, unless Unistone and Cash Systems shall
otherwise agree in writing, each company shall not (i) operate its business
otherwise than in the ordinary course, or (ii) authorize, recommend or propose
any merger, consolidation, acquisition of assets, disposition of assets,
material change in its capitalization or any comparable event, not in the
ordinary course of business (in each case, other than the transactions
contemplated hereby or in the PPM and transactions as to which written notice
has been given to the other companies prior to the date hereof), provided,
however, that Cash Systems shall be able to undertake any of the foregoing
with the consent of Unistone which consent shall not be unreasonably withheld.
4.3 Disclosure. Each party acknowledges that it has, and will have,
possession of important confidential information ("Confidential Information")
regarding the other parties. Each party hereto agrees that it shall not use
any confidential information except in furtherance of the transactions
contemplated hereby and shall not divulge, communicate, furnish or make
accessible any Confidential Information to any person, firm, partnership,
corporation or other entity. No party hereto shall make any public statement
from the date of this Agreement forward, including without limitation any
press release, with respect to this Agreement and the transactions
contemplated hereby, without the prior written consent of the other parties
(which consent may not be unreasonably withheld), except as may be required by
law, in which case the parties shall consult with each other as to the nature
and scope of the required disclosure and any protective measures which should
be taken to preserve the confidentiality of the disclosed information. If any
party becomes legally compelled to disclose information relating to this
Agreement, such party shall provide the other parties with notice of such
requirement to allow such party to seek a protective order or other remedy.
If such protective order or other remedy is not obtained, or if compliance
hereof is waived, each party agrees to disclose only that portion of
information which is legally required to be disclosed and to permit the other
parties at their expense to take all reasonable steps to preserve the
confidentiality of the transactions hereunder.
4.4 Recommendation of Approval. The Board of Directors of Unistone
and Cash Systems shall continue to recommend to their respective shareholders
approval of this Agreement and the transactions contemplated hereby except as
the fiduciary obligations and other duties of each such Board of Directors may
otherwise require.
4.5 Access. Prior to the Closing, Cash Systems shall afford to the
officers, attorneys, accountants, and other authorized representatives of
Unistone free and full access to the premises, books and records of Cash
Systems in order that Unistone may make such investigation as it may desire of
the affairs of Cash Systems, provided such access is not unreasonably
disruptive to Cash Systems's business. Prior to the Closing, Unistone shall
afford to the officers, attorneys, accountants, and other authorized
representatives of Cash Systems free and full access to the premises, books
and records of Unistone so that it may make such investigations as it may
desire of the affairs of Unistone, provided such access is not unreasonably
disruptive to Unistone.
4.6 No Solicitation. Neither Cash Systems nor Unistone will (nor will
either of them permit any agent or affiliate to) solicit, initiate or
encourage any Acquisition Proposal (as hereinafter defined) or furnish any
information to, or cooperate with, any person, corporation, firm or other
entity with respect to an Acquisition Proposal. As used herein "Acquisition
Proposal" means a proposal for a merger or other business combination
involving such entity or for the acquisition of a substantial equity interest
in, or a substantial portion of the assets of such entity other than the
Reorganization. ▇▇▇▇▇▇ Services shall not sell any of the Unistone Shares
held by it and shall not permit any of its affiliates to sell their Unistone
Shares and neither ▇▇▇▇▇▇ Services nor any of its affiliates shall agree to an
Acquisition Proposal.
ARTICLE V
CONDITIONS
5.1 Conditions to the Obligations of Unistone and ▇▇▇▇▇▇ Services.
The obligations of Unistone and ▇▇▇▇▇▇ Services to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at or before
the consummation of the transactions contemplated hereby of each of the
following conditions:
(a) No action shall have been taken, and no statute, rule,
regulation or order shall have been promulgated, enacted, entered, enforced or
deemed applicable to the transactions contemplated hereby by any federal,
state or foreign government or governmental authority or by any court,
domestic or foreign, including entry of a preliminary or permanent injunction,
which would, in the reasonable opinion of Unistone, (i) make the transactions
contemplated hereby illegal, (ii) require the divestiture by Unistone or any
subsidiary of Unistone of the shares of any company or of a material portion
of the business of Unistone and its subsidiaries taken as a whole, (iii)
impose material limits on the ability of Unistone to effectively control the
business of Unistone and its subsidiaries, (iv) otherwise materially adversely
affect Unistone and its subsidiaries taken as a whole, or (v) if the
transactions contemplated hereby are consummated, subject any officer,
director, or employee of Unistone to criminal penalties or to civil
liabilities not adequately covered by insurance or enforceable indemnification
maintained by Unistone;
(b) No action or proceeding before any court or governmental
authority, domestic or foreign, by any government or governmental authority or
by any other person, domestic or foreign, shall be threatened, instituted or
pending which would reasonably be expected to result in any way of the
consequences referred to in clauses (i) through (v) of paragraph (a) above;
(c) Cash Systems shall have complied in all material respects
with its agreements and covenants herein, and all representations and
warranties of Cash Systems herein shall be true and correct in all material
respects at the time of Closing as if made at that time, except to the extent
they expressly relate to an earlier date, and Unistone shall have received a
certificate to that effect to the best of the knowledge of Cash Systems,
signed by the President of Cash Systems;
(d) Each Cash Systems Stockholder shall have complied in all
material respects with its agreements and covenants herein, and all
representations and warranties of each Cash Systems Stockholder herein shall
be true and correct in all material respects at the time of the Closing as if
made at that time, except to the extent they expressly relate to an earlier
date, and Unistone shall have received a certificate to that effect to the
best knowledge of each Cash Systems
Stockholder, signed by each Cash Systems Stockholder;
(e) A Good Standing Certificate of Cash Systems, dated no more
than 10 days prior to the Closing Date, from the Secretary of State of
Minnesota;
(f) The holders of at least eighty percent (80%) of the issued
and outstanding Cash Systems Shares owned by the Cash Systems stockholders
listed on Schedule 5.1(f) shall have agreed to exchange their Cash Systems
Shares pursuant hereto; and
(g) Each Cash Systems Stockholder shall have delivered to
American Registrar and Transfer Company, Unistone's transfer agent,
certificates representing such Cash Systems Stockholder's Cash Systems Shares
which are being transferred hereunder, which certificate shall have been duly
endorsed in black by such Cash Systems Stockholder or with blank stock powers
attached, in proper form for transfer to Unistone.
(h) The delivery of an opinion from ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ in the
form set forth on Schedule 5.1(h).
(i) Executed copies of Investment Letters in the form set forth
on Schedule 5.1(i) from each Cash Systems Stockholder who agrees to exchange
his or her Cash Systems Shares for Unistone Shares and holders of Options,
Notes and Warrants who agree to comply with Section 1.2 hereof.
5.2 Conditions to the Obligations of Cash Systems and the Cash Systems
Stockholders. The obligations of Cash Systems and the Cash Systems
Stockholders to consummate the transactions contemplated hereby are subject to
the satisfaction, at or before the consummation of the transactions
contemplated hereby, of each of the following conditions:
(a) The directors of Cash Systems shall have duly approved the
transactions contemplated hereby in accordance with applicable law;
(b) No action shall have been taken, and no statute, rule,
regulation or order shall have been promulgated, enacted, entered, enforced or
deemed applicable to the transactions contemplated hereby by any federal,
state or foreign government or governmental authority or by any court,
domestic or foreign, including the entry of a preliminary or permanent
injunction, which would (i) make the transactions contemplated hereby illegal,
(ii) require the divestiture by Cash Systems or any subsidiary of Cash Systems
of the shares of any company or of a material portion of the business of Cash
Systems and its subsidiaries taken as a whole, (iii) impose material limits on
the ability of Cash Systems to effectively control the business of Cash
Systems and its subsidiaries, (iv) otherwise materially adversely affect Cash
Systems and its subsidiaries taken as a whole or any Cash Systems Stockholder,
or (v) if the transactions contemplated hereby are consummated, subject any
officer, director or employee of Cash Systems to criminal penalties or to
civil liabilities not adequately covered by insurance or enforceable
indemnification maintained by Cash Systems;
(c) No action or proceeding before any court or governmental
authority, domestic or foreign, by any government or governmental authority or
by any other person, domestic or foreign, shall be threatened, instituted or
pending which would reasonably be expected to result in any of the
consequences referred to in clauses (i) through (v) of paragraph (b) above;
(d) Unistone shall have complied in all material respects with
its agreements and covenants herein, and all representations and warranties of
Unistone herein shall be true and correct in all material respects at the time
of Closing as if made at that time, except to the extent they expressly relate
to an earlier date, and Cash Systems shall have received a certificate to that
effect, signed by the Presidents of Unistone and ▇▇▇▇▇▇ Services;
(e) ▇▇▇▇▇▇ Services shall have complied in all material respects
with its agreements and covenants herein, and all representations and
warranties of ▇▇▇▇▇▇ Services herein shall be true and correct in all material
respects at the time of the Closing as if made at that time, except to the
extent they expressly relate to an earlier date, and Cash Systems and the Cash
Systems Stockholders shall have received a certificate to that effect, signed
by the President of ▇▇▇▇▇▇ Services;
(f) A Good Standing Certificate of Unistone, dated no more than
10 days prior to the Closing Date, from the Secretary of State of Delaware;
(g) All necessary third party and governmental consents and
approvals required for transactions contemplated hereby shall have been
obtained;
(h) Unistone shall have changed its name to "Cash Systems,
Inc.," and ▇▇▇▇▇▇ Services shall have caused the number of its Unistone Shares
outlined in Article 1.4 to have been delivered to Unistone for cancellation;
(i) Unistone shall have delivered to American Registrar and
Transfer Company, Unistone's transfer agent, certificates representing the
Unistone Shares which are being transferred hereunder, to be issued to the
Cash Systems Stockholders in accordance with the terms of this Agreement; and
(j) The conditions set forth in Sections 1.2, 1.7, 1.9, 1.10,
1.12 and 1.18 shall have been complied with by the appropriate parties.
(k) All of the holders of Options and Warrants shall have agreed
to exchange such Options and Warrants for comparable options and warrants for
Unistone Shares and all of the holders of the Notes shall have executed
amendments providing that such Notes are convertible into Unistone Shares.
(l) The delivery of an opinion from LWB in the form set forth on
Schedule 5.2(l) which will also cover the exchange of the Cash Systems Rule
701 Shares for Unistone Shares and provide that such Unistone Shares will be
freely tradeable.
ARTICLE VI
INDEMNIFICATION
6.1 ▇▇▇▇▇▇ Services hereby agrees to indemnify and hold Cash Systems,
its officers, directors, employees and agents and each person, if any, who
controls Cash Systems within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, the Cash Systems Stockholders and, following the
Closing, Unistone and all of its then officers, directors, employees and
agents and each person, if any, who then controls Unistone within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, harmless from and
against the following:
(a) Any and all liabilities, losses, claims, costs, expenses,
damages and judgments (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter,
including any action, that could give rise to such liabilities, losses,
claims, costs, expenses, damages and judgments and any action to enforce this
Article VI) (collectively, the "Losses") resulting from or arising out of any
breach of any representation, warranty, or non-performance of any covenant or
agreement on the part of Unistone or ▇▇▇▇▇▇ Services contained in this
Agreement or in any statement or certificate furnished or to be furnished by
Unistone or ▇▇▇▇▇▇ Services pursuant hereto or in connection with the
transactions contemplated hereby;
(b) Any and all Losses they suffer resulting from or arising out
of any untrue statement or alleged untrue statement of a material fact
concerning Unistone or ▇▇▇▇▇▇ Services contained in the PPM or the
Registration Statement or resulting from any omission or alleged omission to
state therein a material fact concerning Unistone or ▇▇▇▇▇▇ Services required
to be stated therein or necessary to make the statements therein concerning
Unistone or ▇▇▇▇▇▇ Services not misleading; and
(c) Any and all losses resulting from or arising out of the
conduct of any business, any act or any omissions by or on behalf of Unistone
prior to the Closing.
(d) Any and all past liabilities of any type or nature
whatsoever of Unistone existing at the Closing of the Agreement, which
includes all expenses related to the Agreement and the compromise and
settlement of any amounts due and owing to ▇▇▇▇▇▇ Services for advances or
otherwise that were incurred by Unistone in this respect prior to the Closing
of the Agreement.
6.2 Cash Systems hereby agrees, to indemnify and hold Unistone and
▇▇▇▇▇▇ Services, and their respective officers, directors, employees and
agents and each person, if any, who controls Unistone or ▇▇▇▇▇▇ Services
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act
harmless from and against the following:
(a) Any and all Losses resulting from or arising out of any
breach of any representation, warranty, or non-performance of any covenant or
agreement on the part of Cash Systems or any Cash Systems stockholder
contained in this Agreement or in any statement or certificate furnished or to
be furnished by Cash Systems pursuant hereto or in connection with the
transactions contemplated hereby; and
(b) Any and all Losses they suffer resulting from or arising out
of any untrue statement or alleged untrue statement of a material fact
concerning Cash Systems or any Cash Systems Stockholder contained in the PPM
or the Registration Statement or resulting from any omission or alleged
omission to state therein a material fact concerning Cash Systems or any Cash
Systems Stockholder required to be stated therein or necessary to make the
statements therein concerning Cash Systems or any Cash Systems Stockholder not
misleading.
6.3 Cash Systems hereby agrees to indemnify and hold the Cash Systems
Stockholders harmless from and against any and all Losses resulting from or
arising out of any breach of any representation, warranty, covenant or
agreement on the part of Cash Systems contained in Article 2.3 of this
Agreement.
6.4 Each Cash Systems Stockholder hereby agrees to indemnify and hold
Unistone and ▇▇▇▇▇▇ Services, and their respective officers, directors,
employees and agents and each person, if any, who controls Unistone or ▇▇▇▇▇▇
Services within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act harmless from and against any and all Losses resulting from or
arising out of any breach of any representation, warranty, covenant or
agreement on the part of such Cash Systems Stockholder contained in Article
2.4 of this Agreement.
6.5 In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Article 6.1, 6.2 or 6.4
(the "Indemnified Party"), the Indemnified Party shall promptly notify the
person against whom such indemnity may be sought (the "Indemnifying Party") in
writing. A delay in giving notice shall only relieve the Indemnifying Party
of liability to the extent the Indemnifying Party suffers actual prejudice
because of the delay. The Indemnifying Party shall have the right, at its
option and expense, to participate in the defense of such a proceeding or
claim, but not to control the defense, negotiation or settlement thereof,
which control shall at all times rest with the Indemnified Party, unless the
proceeding or claim involves only money damages or relates to a corporate
restructuring, recapitalization or stock issuance while the Indemnifying Party
was a principal stockholder of Unistone prior to the Closing, not an
injunction or other equitable relief, and unless the Indemnifying Party:
(i) irrevocably acknowledges in writing complete
responsibility for and agrees to indemnify the Indemnified Party,
and
(ii) furnishes satisfactory evidence of the financial
ability to indemnify the Indemnified Party,
in which case the Indemnifying Party may assume such control through counsel
of its choice and at its expense, but the Indemnified Party shall continue to
have the right to be represented, at its own expense, by counsel of its choice
in connection with the defense of such a proceeding or claim. If the
Indemnifying Party does not assume control of the defense of such a proceeding
or claim, (i) the entire defense of the proceeding or claim by the Indemnified
Party, (ii) any settlement made by the Indemnified Party, and (iii) any
judgment entered in the proceeding or claim shall be deemed to have been
consented to by, and shall be binding on, the Indemnifying Party as fully as
though it alone had assumed the defense thereof and a judgment had been
entered in the proceeding or claim in the amount of such settlement or
judgment, except that the right of the Indemnifying Party to contest the right
of the Indemnified Party to indemnification under the Agreement with respect
to the proceeding or claim shall not be extinguished. If the Indemnifying
Party does assume control of the defense of such a proceeding or claim, it
will not, without the prior written consent of the Indemnified Party settle
the proceeding or claim or consent to entry of any judgment relating thereto
which does not include as an unconditional term thereof the giving by the
claimant to the Indemnified Party a release from all liability in respect of
the proceeding or claim. The parties hereto agree to cooperate fully with
each other in connection with the defense, negotiation or settlement of any
such proceeding or claim.
6.6 The remedies provided for in this Article 6 are the exclusive
remedies of the parties with respect to the breach of any representation,
warranty, covenant or agreement set forth herein.
6.7 The parties agree that all of the representations and warranties
contained herein shall survive the Closing and continue to be binding
regardless of any investigation made at any time by any party.
ARTICLE VII
CLOSING DATE
7.1 The closing for the consummation of the Reorganization
contemplated by this Agreement (the "Closing") shall unless another date or
place is agreed to in writing by the parties hereto, take place at the offices
of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq, on the date which is no later than the fifth
business day after the last to occur of the following dates (the actual date
of the Closing shall be referred to as the "Closing Date"):
(a) The date on which all the other conditions set forth in
Article V hereof shall have been satisfied, except to the extent any such
conditions shall have been waived by Unistone or Cash Systems; or
(b) October 15, 2001 unless extended by the parties.
ARTICLE VIII
POST-CLOSING MATTERS
At the Closing, subject to the Cash Systems Stockholders being deemed to
be stockholders of record of the reorganized Unistone, Unistone will cause all
of its officers and directors to resign from office and to cause to be elected
to the Board of Directors of Unistone those persons designated by Cash Systems
to wit: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; and ▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE IX
MISCELLANEOUS
9.1 Termination. With respect to each company, this Agreement may be
terminated and the transactions contemplated hereby may be abandoned (i) by
the mutual consent of Unistone and Cash Systems at any time, or (ii) by either
Cash Systems or Unistone if the transactions contemplated hereby have not been
consummated prior to October 15, 2001 for any reason, or (iii) by either Cash
Systems or Unistone if either discovers a material breach of a representation,
warranty, covenant or agreement by the other and such breach is not cured
within ten (10) days of the breaching party's receipt of a notice from the
non-breaching party. In the event of such termination and abandonment, none
of Unistone, Cash Systems, ▇▇▇▇▇▇ Services nor the Cash Systems Stockholders
(or any of their respective directors or officers) shall have any liability or
further obligation to any other party to this Agreement, except that nothing
herein will relieve any party from liability for any willful breach of this
Agreement.
9.2 Expenses. Whether or not the transactions contemplated are
consummated, all out-of-pocket costs and expenses incurred in connection with
the this Agreement and the transactions contemplated will be paid by the party
incurring such expenses, except that Cash Systems shall bear all auditing
costs relating to the books and records of Cash Systems, all legal costs and
fees for preparing registration statements to be filed with the Federal and/or
state securities agencies, costs and fees of any registration statements.
9.3 Brokers. No broker or finder is entitled to any brokerage or
finder's fee or other commission or fee from any company or based upon
arrangements made by or on behalf of any party with respect to the
transactions contemplated by this Agreement, except as disclosed on Schedule
9.3 annexed hereto, and the party so indicated on Schedule 9.3 shall be liable
for the payment thereof.
9.4 Arbitration. Any controversy arising out of, connected to, or
relating to any transactions herein contemplated, or this Agreement, including
the indemnification provisions contained herein, or the breach thereof,
including, but not limited to any claims of violations of Federal and/or state
securities acts, banking statues, consumer protection statutes, federal and/or
state anti-racketeering (e.g. RICO) claims as well as any common law claims
and any state law claims of fraud, negligence, negligent misrepresentations,
and/or conversion and any disputes as to the arbitrability of any such claim
shall be settled by arbitration in the county in which Cash Systems principal
operations are situated in the State of Minnesota and in accordance with the
commercial rules of the American Arbitration Association by three (3)
arbitrators appointed in accordance with such rules. Any judgment on the
arbitrator's award may be entered in any court having jurisdiction thereof.
The arbitrators shall hear and determine the matter and shall execute and
acknowledge its award, in writing, and if requested by either party, shall
make findings of fact and conclusions of law. Any award determined by the
arbitrators shall be final and binding on the parties, however, in the event
of any misconduct, partiality, corruption or the like of any arbitrator, the
parties shall retain any rights of appeal to which they may be entitled
pursuant to applicable law. The cost and expense of arbitration, including
the fees of the arbitrator, and the reasonable legal and accounting fees and
expenses of the parties, shall be divided between the parties in such
proportion as the arbitrators may determine, and may be assessed against one
party if the arbitrators so determine.
9.5 Other Actions. Each of the parties hereto agrees to execute and
deliver such other documents, certificates, agreements and other writings and
to take such other actions as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
9.6 Entire Agreement; Waiver and Amendment. This Agreement, the
exhibits and schedules hereto contain the entire agreement by and among
Unistone, Cash Systems, ▇▇▇▇▇▇ Services and the Cash Systems Stockholders with
respect to the transactions contemplated hereby. Any and all prior
discussions, negotiations, commitments and understandings relating to the
subject matter of this Agreement are superseded by this Agreement. This
Agreement may not be modified, amended or terminated except by a written
agreement specifically referring to this Agreement signed by all of the
parties hereto. No waiver of any breach or default hereunder shall be
considered valid unless in writing signed by the party giving such waiver, and
no such waiver shall be deemed a waiver of any subsequent breach or default of
the same or similar nature.
9.7 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to its
principles of conflicts of laws.
9.8 Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.9 Notices. All notices or other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by registered or certified mail postage prepaid, addressed as follows:
If to Unistone: Unistone, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Hermes Building, Suite 205
455 East ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Cash Systems: Cash Systems, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
Suite 300
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, #▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
9.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute but one agreement.
9.11 Publicity. All public announcements relating to this Agreement or
the transactions contemplated hereby will be made only as may be agreed upon
by Unistone and Cash Systems or as required by Law. If public disclosure or
notice is required by Law, the disclosing party will use its best efforts to
give the other prior written notice of the disclosure to be made.
9.12 Gender; Number. The use of a particular pronoun herein shall not
be restrictive as to gender, and the use of the singular or plural shall not
be restrictive as to number, but shall be interpreted in all cases as the
context may require.
9.13 Schedules. The Schedules attached hereto and/or delivered
herewith are an integral part of this Agreement as if fully re-written herein.
9.14 Binding Effect. This Agreement will be binding upon and will
inure to the benefit of the parties and their respective heirs, personal
representatives, successors and permitted assigns. Except as herein provided,
no party will have the right to assign this Agreement, or any of such party's
rights hereunder, without the prior written consent of the other parties.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
herein above written.
UNISTONE, INC.
By:/S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
▇▇▇▇▇▇ SERVICES, INC.
By:/s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
CASH SYSTEMS, INC.
By:/s/▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, President
CORPORATE CAPITAL MANAGEMENT, LLC
By:/s/▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, President
PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Plan of Reorganization
and Stock Exchange Agreement (the "Agreement") dated as of the 7th day of
September, 2001, among Unistone, Inc., a Delaware corporation ("Unistone");
▇▇▇▇▇▇ Services, Inc., a Utah corporation and principal stockholder of
Unistone ("▇▇▇▇▇▇ Services"); Corporate Capital Management, LLC, a Minnesota
limited liability company ("CCM"); Cash Systems, Inc., a Minnesota corporation
("Cash Systems"); and the Cash Systems common stockholders, stock option
holders, warrant holders and note holders (respectively, the "Cash Systems
Founding Stockholders," the Cash Systems Stock Option Holders" and the "Cash
Systems Warrant Holders" and the "Cash Systems Note Holders"), all of whom are
listed in Schedule 1.1 hereto and who execute and deliver a copy of this
Agreement, with the Cash Systems Founding Stockholders, the Cash Systems Stock
Option Holders, the Cash Systems Warrant Holders, the Cash Systems Note
Holders are sometimes collectively referred to as the "Cash Systems
Stockholders," and by which the undersigned, through execution and delivery of
this Counterpart Signature page, intends to be legally bound by the terms of
the Agreement.
Equity Securities Investments, Inc.
Name (Please Print)
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
City State Zip
/s/
(Signature)
October 11, 2001
(Date)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name (Please Print)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. S. E.
Street Address
Prior Lake, MN 55372
City State Zip
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(Signature)
October 9, 2001
(Date)
▇▇▇▇▇ ▇▇▇▇▇
Name (Please Print)
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
City State Zip
/s/▇▇▇▇▇ ▇▇▇▇▇
(Signature)
October 11, 2001
(Date)
▇▇▇▇▇ ▇▇▇▇▇▇
Name (Please Print)
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
City State Zip
/s/▇▇▇▇▇ ▇▇▇▇▇▇
(Signature)
10/10/01
(Date)
▇▇▇▇▇ ▇. ▇▇▇▇
Name (Please Print)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
City State Zip
/s/▇▇▇▇▇ ▇. ▇▇▇▇
(Signature)
10/10/01
(Date)
▇▇▇▇▇▇▇ ▇▇▇▇▇
Name (Please Print)
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
City State Zip
/s/▇▇▇▇▇▇▇ ▇▇▇▇▇
(Signature)
10/10/01
(Date)
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name (Please Print)
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
City State Zip
/s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Signature)
10/10/01
(Date)
SCHEDULES TO THAT CERTAIN PLAN OF REORGANIZATION AND STOCK EXCHANGE AGREEMENT
BETWEEN UNISTONE, INC., A DELAWARE CORPORATION ("UNISTONE"); ▇▇▇▇▇▇ SERVICES,
INC., A UTAH CORPORATION ("▇▇▇▇▇▇ SERVICES"); CORPORATE CAPITAL MANAGEMENT,
LLC, A MINNESOTA LIMITED LIABILITY COMPANY ("CCM"); CASH SYSTEMS, INC., A
MINNESOTA CORPORATION ("CASH SYSTEMS"); AND THE STOCKHOLDERS, OPTION HOLDERS,
WARRANT HOLDERS AND CONVERTIBLE NOTE HOLDERS OF CASH SYSTEMS (THE "CASH
SYSTEMS STOCKHOLDERS")
Schedule 1.1 Exchange of Shares
Unistone Shares
To be Received
Cash Systems Outstanding Common in Exchange
▇▇▇▇▇▇▇ ▇▇▇▇▇ 9,045,000 (Cert. 6) 9,045,000 (1)
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 502,500 (Cert. 7) 502,500 (1)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 502,500 (Cert. 8) 502,500 (1)
Total Outstanding Shares 10,050,000 10,050,000
Rule 701 Shares Issued to Principles of
Corporate Capital Management, LLC.
▇▇▇▇ ▇▇▇▇▇▇ 167,000 167,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 167,000 167,000
▇▇▇▇ ▇▇▇▇▇▇▇ 166,000 166,000
Total 701 Shares 500,000 500,000
Unistone Options
To be Received
Cash Systems Stock Option Plan and Outstanding Options in Exchange
▇▇▇▇▇ ▇▇▇▇▇ 100,000 shares 100,000 (2)
vesting immediately @ $1.38/sh
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 25,000 shares 25,000 (2)
vesting immediately @ $1.25/sh
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 25,000 shares 25,000 (2)
vesting immediately @ $1.25/sh
▇▇▇▇▇ ▇▇▇▇▇▇ 50,000 shares 50,000 (2)
vesting immediately
and 50,000 shares 50,000 (2)
in one year @ $1.25/sh
▇▇▇▇▇ ▇▇▇▇ 25,000 shares 25,000 (2)
vesting immediately
and 25,000 shares 25,000 (2)
in one year @ $.10/sh
(non-qualified)
Total Contemplated
Options 300,000 300,000
Unistone Warrants
To be Received
Cash Systems Outstanding Warrants (all at $1.50 per share in Exchange
Corporate Capital Management, LLC 156,000 (W1) 156,000 (3)
Equity Securities Investments, Inc. 27,500 (W3) 27,500 (3)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ 16,250 (W4) 16,250 (3)
▇▇▇▇▇ ▇▇▇▇▇▇ 8,750 (W5) 8,750 (3)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,500 (W6) 2,500 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,000 (W2) 10,000 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 10,000 (W2) 10,000 (3)
US Internet 10,000 (W2) 10,000 (3)
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,500 (W2) 2,500 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 (W2) 1,250 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 (W2) 1,250 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 15,000 (W2) 15,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 10,000 (W2) 10,000 (3)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Special Trust 5,000 (W2) 5,000 (3)
▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Revocable Trust 5,000 (W2) 5,000 (3)
August ▇. ▇▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇ ▇. ▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,250 (W2) 1,250 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ 5,000 (W2) 5,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇ 2,500 (W2) 2,500 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,250 (W2) 1,250 (3)
Total Warrants 321,000 321,000
Convertible Notes Unistone Shares
to be Received to be Received
Cash Systems Outstanding Convertible Notes in Exchange on Conversion
Corporate Capital
Management LLC $250,000 @ $1.25 $250,000 200,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $50,000 @ $1.25 $50,000 40,000 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ $50,000 @ $1.25 $50,000 40,000 (3)
US Internet $50,000 @ $1.25 $50,000 40,000 (3)
▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ $12,500 @ $1.25 $12,500 10,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,250 @ $1.25 $6,250 5,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,250 @ $1.25 $6,250 5,000 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $75,000 @ $1.25 $75,000 60,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $50,000 @ $1.25 $50,000 40,000 (3)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ Special Trust $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇ & ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Revocable Trust $25,000 @ $1.25 $25,000 20,000 (3)
August ▇. ▇▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇ ▇. ▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ $6,250 @ $1.25 $6,250 5,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇▇ $25,000 @ $1.25 $25,000 20,000 (3)
▇▇▇▇▇ ▇▇▇▇▇▇ $12,500 @ $1.25 $12,500 10,000 (3)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ $6,250 @ $1.25 $6,250 5,000 (3)
Total Bridge Loan Amounts $800,000 $800,000 640,000
(1) The registration rights provided in Section 1.8 of the Agreement shall
be accorded to the following shares of common stock of these persons: ▇▇▇▇▇▇▇
▇▇▇▇▇, 400,000 shares; ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 400,000 shares; and ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, 400,000 shares.
(2) The registration rights provided in Section 1.8 of the Agreement shall
be accorded to all of the shares of common stock of these persons that
underlie these options.
(3) The registration rights provided in Section 1.8 of the Agreement shall
be accorded to all of the shares of common stock of these persons or entities
acquired upon the exercise of the warrants or the conversion of the notes.
Schedule 1.7 Cash Systems, Inc. 2001 Stock Option Plan
CASH SYSTEMS, INC.
2001 STOCK OPTION PLAN
1. Purpose. The purpose of the Cash Systems, Inc. 2001 Stock Option
Plan is to induce certain designated persons to continue to provide valuable
services to Cash Systems, Inc. (the "Company") and to encourage such persons
to secure or increase on reasonable terms their stock ownership in the
Company. The Board of Directors of the Company believes the Plan is in the
best interest of the Company and will promote the success of the Company.
This success will be achieved by encouraging continuity of management and
increased incentive and personal interest in the welfare of the Company by
those who are primarily responsible for shaping and implementing the
long-range plans of the Company.
Certain Options granted under this Plan are intended to be Incentive
Stock Options qualified under Section 422 of the Code. The Plan also permits
the grant of Nonqualified Stock Options.
2. Definitions. For purposes of this Plan, the following terms shall
have the meanings indicated below:
(a) "Capital Stock" or "Common Stock": any of the Company's
authorized but unissued shares of common stock.
(b) "Code": the Internal Revenue Code of 1986, as amended from
time to time.
(c) "Fair Market Value": the price per share determined by the
Board of Directors at the time any Option is granted. Fair Market Value
of Incentive Stock Options shall be determined consistent with the Code
and regulations.
(d) "Incentive Stock Option": an option defined in Section 422
of the Code to purchase shares of the Common Stock of the Company.
(e) "Non-Qualified Stock Option": an option, not intended to
qualify as an Incentive Stock Option as defined in Section 422 of the
Code, to purchase Common Stock of the Company.
(f) "Option": the term shall refer to a Stock Option granted
under this Plan.
(g) "Option Agreement": a written agreement pursuant to which
the Company grants an Option to an Optionee and sets the terms and
conditions of the Option.
(h) "Option Date": the date upon which an Option Agreement for
an option granted pursuant to this Plan is duly executed by or on behalf
of the Company.
(i) "Option Stock": the Common Stock of the Company (subject to
adjustment as described in Section 7) reserved for options pursuant to
this Plan, or any other class of stock of the Company which may be
substituted therefore by exchange, stock split or otherwise.
(j) "Optionee": a person who is eligible to receive an Option
under Section 5 of the Plan and to whom an Option has been granted under
the Plan.
(k) "Plan": this Cash Systems, Inc. 2001 Stock Option Plan
effective September 25, 2001, and as amended hereafter from time to
time.
(l) A "Subsidiary": any corporation in an unbroken chain of
corporations beginning with the Company, if, at the time of granting the
option, each of the corporations other than the last corporation in the
chain owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other
corporations in such chain. The term shall include any subsidiaries
which become such after adoption of this Plan.
3. Options Available Under Plan. An aggregate of 1,000,000 shares of
the Company's authorized but unissued shares of Common Stock are hereby made
available for grant, and shall be reserved for issuance, under this Plan. The
aggregate number of shares available under this Plan shall be subject to
adjustment on the occurrence of any of the events and in the manner set forth
in Section 7. If an Option shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares, shall (unless the Plan
shall have been terminated) become available for other Options under the Plan.
4. Administration. The Plan shall be administered by the Board of
Directors of the Company. At all times subject to the authority of the Board
of Directors, the Board of Directors may from time to time delegate some or
all of its authority under the Plan to a committee consisting of three (3) or
more Directors (the "Committee"), and/or obtain assistance or recommendations
from such Committee. If no separate committee is appointed, the Board shall
constitute the Committee, and references to the Committee shall include the
entire Board of Directors.
The Company shall grant Options pursuant to the Plan upon determinations
of the Committee as to which of the eligible persons shall be granted Options,
the number of shares to be Optioned and the term during which any such Options
may be exercised. At all times, a majority of the members of the Committee
making determinations about the grant of Options to employee-directors or
employee-officers must be disinterested in the grant being made. The
Committee may from time to time adopt rules and procedures for carrying out
the Plan and interpretations and constructions of any provision of the Plan,
which shall be final and conclusive.
5. Eligibility for Stock Options. Incentive Stock Options under the
Plan may only be granted to such employees of the Company or any Subsidiary
thereof, as selected by the Committee. Non-Qualified Stock Options may be
granted to key employees, non-employee directors and any other persons
providing valuable services to the Corporation.
In selecting the employees or other persons to whom Stock Options shall
be granted, as well as determining the number of shares subject to each
Option, the Committee shall take into consideration such factors as it deems
relevant in connection with accomplishing the purpose of the Plan. For any
calendar year, the aggregate Fair Market Value (determined at the Option Date)
of the stock with respect to which any Incentive Stock Options are exercisable
for the first time by any individual employee (under all Incentive Stock
Option plans of the Company and all subsidiary corporations) shall not exceed
$100,000. Subject to the provisions of Section 3, an optionee who has been
granted an Option may, if he or she is otherwise eligible, be granted an
additional Option or Options if the Committee shall so determine. Any
Incentive Stock Option that becomes exercisable and exceeds the above
limitation shall be treated as a Non-Qualified Option.
No Stock Option may be granted under this Plan later than the expiration
of ten (10) years from the Effective Date.
6. Terms and Conditions of Options. Whenever the Committee shall
designate an Optionee, it shall communicate to the Secretary of the Company
the name of the Optionee, the number of shares to be Optioned and such other
terms and conditions as it shall determine, not inconsistent with the
provisions of this Plan. The President or other officer of the Company shall
then enter into an Option Agreement with the Optionee, complying with and
subject to the following terms and conditions and setting forth such other
terms and conditions of the Option as determined by the Committee:
(a) Number of shares and option price. The Option Agreement
shall state the total number of shares to which it pertains. The price
of Incentive Stock Option Stock shall be not less than one hundred
percent (100%) of the Fair Market Value of the Option Stock at the
Option Date. In the event an Incentive Stock Option is granted to an
employee, who, at the Option Date, owns more than ten percent (10%) of
the voting power of all classes of the Company's stock then outstanding,
the price of the shares of Option Stock which will be covered by such
Option shall be not less than one hundred ten percent (110%) of the Fair
Market Value of the Option Stock at the Option Date. Non-Qualified
Options may be granted at a price equal to, greater than or less than
Fair Market Value at the date of grant. The Option price shall be
subject to adjustment as provided in Section 7 hereof.
(b) Period of options and right to exercise. Options granted
under this Plan shall be subject to such terms and conditions, shall be
exercisable at such times and shall be evidenced by such form of written
Option Agreement as the Committee shall determine, provided that such
determinations are not inconsistent with Code Section 422 and the
regulations thereunder. The Option Agreement may, at the discretion of
the Committee, provide for the acceleration of vesting of Options upon a
"Change in Control" of the Company, as defined in Section 6(h) below.
In addition, no Option granted, shall by its terms, be exercisable after
the expiration of ten (10) years from the date such Option is granted.
Except, however, Incentive Stock Options granted to any employee who at
the Option Date owns more than ten percent (10%) of the voting power of
all shares of the classes of Company's stock then outstanding, may not
be exercisable after expiration of five (5) years from the Option Date.
The period during which the Option may be exercised, once it is granted,
shall not be reduced, except as provided in paragraphs (c), (d) and (e)
below. The exercise of any Option will be contingent upon receipt by
the Company of payment as provided in paragraph (f) below for the full
purchase price of such shares. No Optionee or his or her legal
representatives, legatees or distributees, as the case may be, will be,
or will be deemed to be, a holder of any shares subject to an Option
unless and until certificates for such shares are issued under the terms
of the Plan.
(c) Termination of Employment or Service. Unless the Option
Agreement otherwise provides, in the event that an Optionee shall cease
to be employed by (or performing services for, in the event of a Non-
Qualified Stock Option) the Company for any reason other than death,
subject to the condition that no Incentive Stock Option shall be
exercisable after the expiration of ten (10) years from the date it is
granted, such Optionee shall have the right to exercise any outstanding
Options at any time within three (3) months after the termination of
employment (or service in the case of a Non-Qualified Stock Option).
Notwithstanding the foregoing, in the case of a disabled employee or
other Optionee, the Board of Directors at its discretion may permit
exercise of Options within one year of termination of employment). In
the event an Optionee shall cease to be employed, or in the case of an
independent consultant, shall cease to provide services to the Company,
for "cause," any outstanding Options in favor of such Optionee shall
immediately terminate and such Optionee shall have no right to exercise
any such Options. For purposes of this Plan, the terms "disability "
and "cause" shall have the meanings ascribed such terms in the
employment or independent consulting agreements between the Company and
any such Optionees.
(d) Death of Optionee. If the Optionee holding a "Qualified
Stock Options" shall die (i) while in the employ of or while providing
services to the Company or any Subsidiary, or (ii) within a period of
three (3) months after the termination of his or her employment with the
Company or any subsidiary as provided in paragraph (c) of this section,
and in either case shall not have fully exercised his or her Options,
any Options granted pursuant to the Plan shall be exercisable until the
earlier of the originally stated date of termination or one year from
the date of death. Such Option shall be exercised pursuant to
subparagraph (f) of this Section by the person or persons to whom the
Optionee's rights under the Option shall pass by the Optionee's will or
by the laws of descent and distribution, and only to the extent that
such Options were exercisable at the time of his or her death.
(e) Transfer of Option. Each Option granted hereunder shall, by
its terms, not be transferable by the Optionee other than by will or by
the laws of descent and distribution, and shall be, during the
Optionee's lifetime, exercisable only by the Optionee. Except as
permitted by the preceding sentence, each Option granted under the Plan
and the rights and privileges thereby conferred shall not be
transferred, assigned or pledged in any way (whether by operation of law
or otherwise), and shall not be subject to execution, attachment or
similar process. Upon any attempt to so transfer, assign, pledge, or
otherwise dispose of the Option, or of any right or privilege conferred
thereby, contrary to the provisions of the Option or the Plan, or upon
levy of any attachment or similar process upon such rights and
privileges, the Option, and such rights and privileges, shall
immediately become null and void.
(f) Manner of Exercise of Options. An Option may be exercised,
in whole or in part, at such time or times and with respect to such
number of shares, as the Board of Directors, in its sole discretion,
shall determine at the time that the Option is granted. The Option
terms shall be set forth in the Option Agreement granting the Option.
Such Option shall be exercisable only within the Option period and only
by (i) written notice to the Company of intent to exercise the Option
with respect to a specified number of shares of stock; (ii) tendering
the original Option Agreement to the Company; and (iii) payment to the
Company of the amount of the Option purchase price for the number of
shares of stock with respect to which the Option is then exercised.
Payment of the Option purchase price may be made in cash, by cashier's
check (by personal check at the discretion of the Company) or by a
"cashless exercise" procedure established between the Company and a
stock brokerage firm, subject to compliance with applicable securities
laws. When shares of stock are issued to the Optionee pursuant to the
exercise of an Option, the fact of such issuance shall be noted on the
Option Agreement by the Company before the Agreement is returned to the
Optionee. When all shares of Optioned stock covered by the Option
Agreement have been issued to the Optionee, or the Option shall expire,
the Option Agreement shall be canceled and retained by the Company.
(g) Delivery of Certificate. As promptly as practicable after
receipt of the written notice and payment specified above, the Company
shall deliver to the Optionee certificates for the number of shares with
respect to which the Option has been exercised, issued in the Optionee's
name; provided, however, that such delivery shall be deemed effected for
all purposes when the Company, or the stock transfer agent for the
Company, shall have deposited such certificates in the United States
mail, postage prepaid, addressed to the Optionee at the address
specified in the written notice of exercise.
(h) Change in Control. A "Change in Control" shall, unless the
Board otherwise directs by resolution adopted prior thereto, be deemed
to occur if (i) any "person" (as that term is used in Sections 13 and
14(d)(2) of the Securities Exchange Act of 1934 as amended ("Exchange
Act")) is or becomes the beneficial owner (as that term is used in
Section 13(d) of the Exchange Act), directly or indirectly, of 50% or
more of the voting Capital Stock of the Company ("Voting Stock") or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof, unless the election or the
nomination for election by the Company's shareholders of each new
director was approved by a vote of at least three-quarters of the
directors then still in office who were directors at the beginning of
the period. Any merger, consolidation or corporate reorganization in
which the owners of the Company's capital stock entitled to vote in the
election of directors prior to said combination, own 50% or more of the
resulting entity's Voting Stock shall not, by itself, be considered a
change in control for the purposes of this Plan.
(i) Other Provisions. The Option Agreements authorized under
this Section shall contain such other provisions as the Committee shall
deem advisable.
7. Adjustment of Number of Shares. If, and to the extent that, the
number of issued shares of the Capital Stock of the Company shall be increased
or reduced by change in par value, recapitalization, reorganization, merger,
consolidation, split up, distribution of a dividend payable in stock or the
like, the number of shares subject to the Option and the Option price therefor
shall be equitably adjusted by the Committee consistent with such change to
prevent substantial dilution or enlargement of the rights granted to or
available to Optionees.
Subject to the foregoing, the grant of an Option pursuant to the Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations, or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
8. No Rights as Stockholder. An Optionee shall not, by reason of any
Option granted hereunder, have any right of a stockholder of the Company with
respect to the shares covered by his or her Option until such shares shall
have been issued to the Optionee.
9. No Obligation to Exercise Option. The granting of an Option shall
impose no obligation upon the Optionee to exercise such Option. Neither shall
the Plan confer upon the Optionee any rights respecting continued employment
nor limit the Optionee's rights or the employer Company's rights to terminate
such employment.
10. Withholding Taxes. If required by law, upon a disqualified
disposition of an Incentive Stock Option, the Company shall have the right to
require any Optionee that is or was an employee as of the Option Date, to
remit to the Company an amount sufficient to satisfy any federal and state
withholding or other employment taxes, if any, resulting from such option
exercise or early disposition of Option Stock. Payment of such amount may be
made in the same manner as payment of the exercise price or by tendering
previously owned shares of the Company's Common Stock with a Fair Market Value
on the date of exercise equal to such amount, subject to compliance with
applicable securities laws.
11. Common Stock Acquired for Investment. Common Stock acquired by an
Optionee under this Plan by exercise of any Option shall be acquired by the
Optionee for investment and without intention of resale, unless, in the
opinion of counsel of the Company, such common stock may be purchased without
any investment representation. Where an investment representation is deemed
necessary, the Committee may require a written representation to that effect
by the Optionee as a condition of the Optionee exercising an Option under this
Plan, and the Committee may place an appropriate legend on the common stock
issued to the Optionee indicating that such common stock has not been
registered under federal or state securities laws. Each Option shall be
subject to the requirement that if, at any time, the Committee shall determine
in its discretion that the listing, registration or qualification of the
shares subject to such Option upon any securities exchange or under any state
or federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with, the
granting of such Option or the issuance or purchase of shares thereunder, then
such Option shall not be granted or exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
Nothing contained herein shall require the Company to register the Options or
the shares of voting common stock purchased upon the exercise of said Options.
12. Effective Date. This Plan shall be effective September 25, 2001
(the "Effective Date") as approved by the Board of Directors, subject to
approval by the shareholders of the Company. However, unless within 12 months
after the Plan is adopted by the Board of Directors, the Plan is approved by
the vote of the holders of a majority of the outstanding Capital Stock of the
Company, the Plan and options granted hereunder shall not qualify under
Section 422 of the Code.
All subsequent stock options granted hereunder will be Non-Qualified Stock
Options. All Options granted prior to disqualification of the Plan for
failure to obtain shareholder approval shall be converted to Non-Qualified
Stock Options.
13. Liquidation. Upon the complete liquidation of the Company, any
unexercised Options theretofore granted under this Plan shall be deemed
canceled, except as otherwise provided in Section 7 in connection with a
merger, consolidation or reorganization of the Company.
14. Termination and Amendment of the Plan. This Plan shall terminate
ten (10) years after the Effective Date or at such earlier time as the Board
of Directors shall determine. Any termination shall not affect any Options
then outstanding under the Plan.
The Board may make such modifications of the Plan as it shall deem
advisable, but may not, without further approval of the stockholders of the
Company, except as provided in Section 7 hereof, (a) increase the number of
shares reserved for Options under this Plan, (b) change the manner of
determining the Option price for Incentive Stock Options, (c) increase the
maximum term of the Options provided for herein or (d) change the class of
persons eligible to receive Options under the Plan.
15. Governing law. The Plan shall be governed by and construed in
accordance with the internal laws of the State of Minnesota without reference
to the principles of conflicts of law thereof.
Schedule 1.9 Lock-up/Leak-out Agreement
LOCK-UP/LEAK-OUT AGREEMENT
THIS LOCK-UP/LEAK-OUT AGREEMENT (the "Agreement" is made and
entered into as of the _____ day of October, 2001, respecting the Plan of
Reorganization and Stock Exchange Agreement between Unistone, Inc., a Delaware
corporation ("Unistone"); ▇▇▇▇▇▇ Services, Inc., a Utah corporation and the
principal stockholder of Unistone ("▇▇▇▇▇▇ Services"); Corporate Capital
Management, LLC, a Minnesota limited liability ("CCM"); Cash Systems, Inc., a
Minnesota corporation ("Cash Systems"); and the Cash Systems common
stockholders, stock option holders, warrant holders and convertible note
holders (respectively, the "Cash Systems Founding Stockholders," the "Cash
Systems Stock Option Holders," the "Cash Systems Warrant Holders" and the
"Cash Systems Note Holders"), by and among Unistone and the persons and
entities listed in Exhibit A attached hereto and incorporated herein by
reference (sometimes collectively referred to herein as the "Shareholders" and
each, a "Shareholder," or by the reference opposite their respective names),
as the record or beneficial Shareholders of certain shares of common stock,
$.001 par value per share (the "Common Stock"), of Unistone.
RECITALS:
WHEREAS, Unistone, CCM and ▇▇▇▇▇▇ Services, are or will be parties
to that certain Plan of Reorganization and Stock Exchange Agreement (the
"Reorganization Agreement") dated or to be dated in October, 2001, pursuant to
which the Reorganization (as defined in the Reorganization Agreement) will be
consummated, a copy of which is annexed hereto and incorporated herein by this
reference; and
WHEREAS, following the closing of the Reorganization Agreement,
each Shareholder will be the beneficial owner of the shares of Common Stock of
Unistone listed in Exhibit A; and
WHEREAS, in order to facilitate the consummation of the
transactions contemplated by the Reorganization Agreement and to provide for
an orderly market for the Common Stock of Unistone subsequent to the
Reorganization contemplated thereby, the undersigned desire to enter into this
Agreement and restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of the Common Stock, all on the terms set forth
below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Notwithstanding anything contained in this Agreement, a
Shareholder may transfer its shares of Common Stock to its affiliates,
partners in a partnership, subsidiaries and trusts, spouses or lineal
descendants for estate planning purposes provided that the transferee (or the
legal representative of the transferee) executes an agreement to be bound by
all of the terms of this Agreement.
2. Except as otherwise expressly provided herein, and except as
each Shareholder may be otherwise restricted from selling shares of Common
Stock ("Shares"), each Shareholder may only sell Shares subject to the
following conditions in relation to the sale of said Shares prior to, during
and after the effective date of a registration statement (other than in
connection with a merger or employee benefit plans pursuant to Forms S-3 or
S-8) pertaining to Unistone's Common Stock (the "Registration Statement") for
the 18 month period specified herein. The Shares, to the extent deemed
required or necessary for public resale, shall be included in Unistone's
Registration Statement that is to be filed respecting other shares of Common
Stock that will be sold pursuant to Unistone's Confidential Private Offering
Memorandum to be prepared following the Closing of the Reorganization (the
"Memorandum"). The provisions of Section 2 shall be effective until and shall
not terminate for a period of eighteen (18) months from the effective date of
the Reorganization and shall be effective, without limitation, during the
period the Registration Statement is effective, and after the end of said 18
month period, all provisions contained herein shall cease and be of no further
force and effect.
2.1 No Shareholder may sell any Shares except as covered by this
Agreement, unless agreed otherwise in writing by the
parties. For purposes of the restrictions contained in this
paragraph 2, the Shareholders shall collectively be
considered one Shareholder.
2.2 Each Shareholder shall be allowed to sell Shares in blocks
of 5,000 Shares or less per transaction.
2.3 The Shares may only be sold at the "offer" or "ask" price
stated by the relevant market maker. Each Shareholder
agrees that it/he will not sell Shares at the "bid" price.
2.4 After a Shareholder sells 10,000 Shares, such Shareholder
may not sell any other Shares unless the "offer" or "ask "
price of the Common Stock increases by 25 basis points above
such Shareholder's last sale price.
2.5 Notwithstanding the foregoing, if, after a Shareholder sells
10,000 Shares, a market maker in the Common Stock (other
than the market maker involved in the first transaction)
continues to show an "offer" or "ask" price at the same
price as the first 10,000 Share transaction, the Shareholder
may, on one occasion only, sell an additional 10,000 Shares
at that price.
2.6 The Shares may not be sold at a price below $2.00 per share.
2.7 Each Shareholder shall be allowed to sell up to twenty (20%)
percent of its/his Shares held as of the date hereof during
each three month period; provided, however, that in the
event any Shareholder does not sell its/his full 20% during
any three-month period, such Shareholder may sell the
difference between 20% of the Shares held as of the date
hereof and the Shares actually sold during such three-month
period in the next successive three-month period.
2.8 The Shareholders agree that they will not engage in any
short selling of the Shares.
3. If required by the Securities and Exchange Commission, all
of the Shares owned or to be acquired as outlined herein, shall be included in
the Registration Statement for the benefit of the Shareholders, at no cost to
them.
4. Notwithstanding anything to the contrary set forth herein,
Unistone may, at any time and from time to time, waive any of the conditions
or restrictions contained herein to increase the liquidity of the Common Stock
or if such waiver would otherwise be in the best interests of the development
of the trading market for the Common Stock.
5. In the event of a tender offer to purchase all or
substantially all of Unistone's issued and outstanding securities, or a
merger, consolidation or other reorganization with or into an unaffiliated
entity, this Agreement shall terminate and the Shares restricted pursuant
hereto shall be released from such restrictions if the requisite number of the
record and beneficial owners of Unistone's securities then outstanding are
voted in favor of such tender offer, merger, consolidation or reorganization.
6. Except as otherwise provided in this Agreement or any other
agreements between the parties, the Shareholders shall be entitled to their
respective beneficial rights of ownership of the Shares, including the right
to vote the Shares for any and all purposes.
7. The Shares and per share price restrictions covered by this
Agreement shall be appropriately adjusted should Unistone make a dividend or
distribution, undergo a forward split or a reverse split or otherwise
reclassify its shares of Common Stock.
8. No transfer of any of the Shares that are subject to this
Agreement in any transaction other than a "broker's transaction" shall be made
unless the transferee executes and deliver a copy of this Agreement prior to
the transfer of any stock certificate representing any of the Shares so
transferred.
9. This Agreement may be executed in any number of counterparts
with the same force and effect as if all parties had executed the same
document.
10. All notices, instructions or other communications required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by certified mail, return receipt requested, overnight delivery
or hand-delivered to all parties to this Agreement at the addresses set forth
above. All notices shall be deemed to be given on the same day if delivered
by hand or on the following business day if sent by overnight delivery or the
second business day following the date of mailing.
11. This Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter hereof, and may not be
amended except by a written instrument executed by the parties hereto.
12. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts
entered into and to be performed wholly within said State.
IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Agreement as of the day and year first above written.
CORPORATE CAPITAL MANAGEMENT LLC
Date: ________________ By______________________________________
Its_______________________________________
Date: ________________ _________________________________________
▇▇▇▇ ▇▇▇▇▇▇
Date: ________________ _________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇▇
Date: ________________ _________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ SERVICES, INC.
Date: ________________ By_______________________________________
Its_______________________________________
Date: ________________ _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Date: ________________ _________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: ________________ _________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: ________________ _________________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date: ________________ __________________________________________
Claus Voellmecke
Date:_________________ _________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
Date:_________________ _________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Date:_________________ _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Date:_________________ _________________________________________
▇▇▇ ▇▇▇▇▇▇▇▇▇
MARICOPA EQUITY MANAGEMENT CORP.
Date:_________________ By_______________________________________
Its_______________________________________
GREAT NORTH CAPITAL CORP.
Date:_________________ By_______________________________________
Its_______________________________________
Date:_________________ _________________________________________
▇▇▇ ▇▇▇▇▇▇
TW STRATEGIC CAPITAL
Date:_________________ By_______________________________________
Its_______________________________________
EXHIBIT A
Lock-Up/Leak-Out Presently Outstanding Unistone Shares Respecting
Plan of Reorganization and Stock Exchange Agreement (the "Reorganization
Agreement") Between Unistone, Inc., a Delaware corporation ("Unistone");
▇▇▇▇▇▇ Services, Inc., a Utah corporation and the principal stockholder of
Unistone ("▇▇▇▇▇▇ Services"); Corporate Capital Management, LLC, a Minnesota
limited liability ("CCM"); Cash Systems, Inc., a Minnesota corporation ("Cash
Systems"); and the Cash Systems common stockholders, stock option holders,
warrant holders and convertible note holders (respectively, the "Cash Systems
Founding Stockholders," the "Cash Systems Stock Option Holders," the "Cash
Systems Warrant Holders" and the "Cash Systems Note Holders")
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇, Esq. 60,750
Corporate Capital 169,894
Management, LLC
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 24,960
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ 7,500
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 35,360
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 62,179
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 57,940
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 60,020
▇▇▇▇ ▇▇▇▇▇▇▇ *166,667
▇▇▇ ▇▇▇▇▇▇▇▇▇ 16,422
Maricopa Equity
Management Corp. 160,500
▇▇▇▇ ▇▇▇▇▇▇▇▇ *166,666
Great North
Capital Corp. 169,894
▇▇▇ ▇▇▇▇▇▇ 16,422
▇▇▇▇ ▇▇▇▇▇▇ *166,667
TW Strategic
Capital 169,894
Claus Voellmecke 30,000
Total: 1,541,735
* These shares include an aggregate of 500,000 shares issued by Cash
Systems pursuant to Rule 701 to principals of CCM that were
exchanged under the Reorganization Agreement.
Schedule 1.18 Escrow Agreement
STOCK ESCROW AGREEMENT
As described in the Letter of Intent dated July 13, 2001 relating to the
proposed Plan of Reorganization and Stock Exchange Agreement among Unistone,
Inc. ("UI"), Cash Systems, Inc. ("CSI"), Corporate Capital Management, LLC
("CCM"), ▇▇▇▇▇▇ Services, Inc. ("▇▇▇▇▇▇"), and the shareholders of CSI (the
"Agreement"), those who would be parties to the Agreement have agreed that
after the consummation of the Reorganization, the stockholders of UI would
hold a total of 1,100,000 shares of common stock of UI and that CCM and ▇▇▇▇▇▇
and their respective affiliates, directly or indirectly, would hold 1,041,735
of such shares with CCM acquiring 771,513 shares of UI common stock from
▇▇▇▇▇▇ and its affiliates prior to the consummation of the Reorganization. In
addition, certain affiliates of CCM (▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇) will exchange 500,000 shares of CSI common stock for 500,000 shares
of UI common stock pursuant to the Agreement. Following the consummation of
the Reorganization, ▇▇▇▇▇▇ and its affiliates and CCM and its affiliates would
control, directly or indirectly, 1,541,735 shares of UI common stock. It has
also been agreed that at least $3,000,000 would be raised in the form of
equity from investors (the "Raise") after the consummation of the
Reorganization in accordance with the terms and conditions of the Exhibits B
and C to the Agency Agreement between CSI and Equity Investment Securities,
Inc., a copy of which is attached hereto as Exhibit A (the "Term Sheets");
provided, however, that any debt that is sold on behalf of CSI (and accepted
by CSI prior to such sale) shall be included as part of the Raise; provided,
further, that any debt sold to the Virtual Fund shall not be included as part
of the Raise. To date, none of the $3,000,000 has been raised. Therefore,
CSI and CCM agree as follows:
1. At the closing of the Reorganization, CCM shall deliver 771,513
shares of UI common stock (the "Shares") to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Esq. ("LWB") to be held in accordance with the terms of this
agreement.
2. Within five (5) days from the date of the Raise being cancelled
because the $3,000,000 was not funded as set forth in the Term
Sheets, CSI shall instruct LWB in writing to return all Shares
held by LWB pursuant to this agreement hereto to UI and LWB shall
return such Shares within three (3) days after the date of such
written notice.
3. Within five (5) days from the date the Gross Proceeds of the
Raise in the amount of at least $3,000,000 are available as
immediately available funds, the escrow agent for the Raise (which
shall be a bank reasonably acceptable to CSI) shall instruct LWB
in writing to deliver all of the Shares held by LWB pursuant
hereto to CCM and LWB shall deliver such Shares within three (3)
days after such written notice. In the event the Gross Proceeds
of the Raise are less than $3,000,000 and CSI elects, in its sole
discretion, to accept said proceeds, the escrow agent (after
notifying CSI that the Gross Proceeds are available as immediately
available funds) shall instruct LWB in writing to deliver all of
the Shares held by LWB pursuant hereto to CCM and LWB shall
deliver such Shares within three (3) days after such written
notice.
4. Any Shares returned to UI pursuant hereto shall be cancelled
without any consideration to CCM and CCM hereby waives any and all
rights with respect to such Shares.
5. In the event the Raise is cancelled due to a material adverse
change in the business of CSI or because the private placement
memo contained an untrue statement of material fact about CSI or
UI or omitted to state a material fact about CSI or UI required to
be stated therein or necessary in order to make the statements
therein not misleading, then CSI shall instruct LWB in writing to
deliver all Shares held by LWB pursuant hereto to CCM and LWB
shall deliver such Shares with three (3) days after such written
notice.
6. All parties agree that any and all Shares held by LWB in
accordance with the terms of this agreement will have full voting
rights and be eligible for all dividends including cash or stock.
In the event LWB has not delivered the Shares to UI or CCM
pursuant hereto and UI is being purchased in whole or part by an
outside entity, CSI shall instruct LWB in writing to deliver all
of the Shares held by LWB pursuant hereto to CCM immediately prior
to the closing of such acquisition and LWB shall so deliver such
Shares within three (3) days after such written notice.
CCM agrees that all shares of UI common stock held by it following the
consummation of the Reorganization, including the Shares, will be subject to
the Lock-up/Leak-out Agreement described in the Agreement.
CCM and CSI agree that each party is responsible for any of the costs, fees or
expenses incurred by it or its affiliates in complying with this agreement or
the Agreement.
LWB, as escrow agent hereunder, shall not be liable to anyone whatsoever by
reason of any error of judgment or for any act done or step taken or omitted
by him in good faith in accordance with the terms of this agreement of for any
mistake of law or for anything which he may do or refrain from doing in
connection herewith unless caused by or arising out of his own gross
negligence or willful misconduct. In the event that any legal action is
instituted against LWB, as escrow agent hereunder, provided that such legal
action does not involve any gross negligence or willful misconduct on the part
of LWB, as escrow agent hereunder, (a) LWB may interplead the parties hereto
in such action and may deposit with the court in which such action is pending
the securities which are the subject of this agreement and which are also the
subject matter of such action, and LWB shall thereupon be relieved of and
discharged from any and all obligations and liabilities as escrow agent under
and pursuant to this agreement in respect of such securities as deposited with
said court; and (b) the parties hereto will indemnify and hold harmless LWB
from and against any and all loss, damage, liability or expense incurred,
arising out of or connected therewith.
If the foregoing is acceptable to you, please indicate your acceptance and
approval by signing in the space provided below on both copies of this letter.
In Witness Whereof, this Agreement has been duly executed by the duly
authorized officers of the parties and the undersigned individuals as of the
____ day of October, 2001.
Very truly yours, ACCEPTED AND
APPROVED
CORPORATE CAPITAL MANAGEMENT LLC CASH SYSTEMS, INC.
By: By:
Its: Its:
______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
Schedule 2.1(c) Unistone-Material adverse effect.
No Exceptions.
Schedule 2.1(d) Unistone-Subsidaries or affiliates
▇▇▇▇▇▇ Services, Inc., principal stockholder and an affiliate;
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, principal stockholder of ▇▇▇▇▇▇ Services and an affiliate;
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, director and executive officer and an affiliate; ▇▇▇▇▇
▇▇▇▇▇▇, director and executive officer and an affiliate; and ▇▇▇▇ ▇▇▇▇▇▇▇▇,
director and executive officer and an affiliate.
Schedule 2.1(f) Unistone-Financial Statements-no material adverse change
No Exceptions.
Schedule 2.1(h) Unistone-Conflict or default; enforceability; corporate
records; compliance with law
No corporate minutes from October, 1989, to July, 1996.
Schedule 2.1(i) Unistone-Party to agreements
No Exceptions.
Schedule 2.1(k) Unistone-Securities filings
No Exceptions.
Schedule 2.1(m) Unistone-Salaries
No Exceptions.
Schedule 2.1(o) Unistone-Employee benefit plans
No Exceptions.
Schedule 2.1(p) Unistone-Material contracts
No Exceptions.
Schedule 2.1(q) Unistone-Title and authority
No Exceptions.
Schedule 2.1(r) Unistone-Contingent liabilities
No Exceptions.
Schedule 2.2(c) Cash Systems-Material adverse effect
No Exceptions
Schedule 2.2(e)(i) Cash Systems-Outstanding shares duly authorized and
validly issued, and are fully paid and non-assessable
No Exceptions
Schedule 2.2(e)(ii) Cash Systems-Outstanding options, warrants,
convertible securities or rights
See response to Schedule 1.1
Schedule 2.2(f)(i) Cash Systems-Contracts
No material adverse change
Schedule 2.2(f)(ii) Cash Systems-Assets owned or leased
No exceptions
Schedule 2.2(h) Cash Systems-Conflict or default; enforceability;
corporate records; compliance with law
No Exceptions.
Schedule 2.2(i) Cash Systems-Party to agreements
Cash Systems has received demand from Fidelity Bank to reimburse
it for ATM shortages in the amount of approximately $420,000. The
basis for this claim is a Vault Agreement with Fidelity Bank. It
is Cash Systems' position that it carried insurance with The St.
▇▇▇▇ Companies for such loss. A lawsuit is being initiated to
enforce this insurance contract.
Schedule 2.2(j) Cash Systems-Litigations
Fidelity Bank matter referenced above
Cash Systems had a verbal agreement with Casino Morongo in
Cabazon, CA to provide ATM service starting in January 2001.
Our services were terminated in April 2001. There is a dispute
with the Casino over the amount of ATM surcharge they are to
receive. Negotiations for settlement are taking lace.
Before installing our ATMs at the Casino, we submitted a
temporary vendor application to the Morongo Gaming Agency and
were told that a complete application must be submitted in the
near future. Because we never received a signed contract from
the Casino, this application was never submitted. The Gaming
Agency is threatening to revoke our license for failure to
submit an application. It is our position that they cannot
revoke a license that was never applied for. In any case, we
expect to receive permission from the Gaming Agency to withdraw
our license application when the dispute with the Casino is
resolved.
Schedule 2.2(k) Governmental and Other Approval.
To the best of Cash Systems' knowledge, all permits, licenses,
etc. have been obtained. Since our business is gaming related,
many licenses and permits are required. We have obtained all
governmental approvals which we are aware of. It is possible that
we are unaware of an approval which is required.
It is possible that the Unistone transaction will require Cash
Systems to apply for new governmental approvals. As Cash Systems
becomes aware of such requirements, it will address and obtain
them prior to closing.
Schedule 2.2(l) Cash Systems-Salaries
2000 Salary Current Salary
▇▇▇▇▇ ▇▇▇▇▇ $72,000 $16,000/mo.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $36,000 $8,000/mo.
▇▇▇▇▇ ▇▇▇▇▇▇ $36,000 $6,000/mo.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ NA $15/hr.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ NA $3,000/mo.
▇▇▇▇▇▇▇ ▇▇▇▇ NA $3,000/mo.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ NA $9,000/mo.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ NA $4,000/mo.
▇▇▇▇▇▇ ▇▇▇▇▇▇ NA $7,000/mo.
At the present time, ▇▇▇▇▇ ▇▇▇▇ is not an employee of Cash Systems
but it pays a company owned entirely by him $6,000/mo.
Schedule 2.2(m) Cash Systems-Accrued compensation
No exceptions
Schedule 2.2(n) Cash Systems-Employee benefit plans
No exceptions
Schedule 2.2(o) Cash Systems-Material contracts
Office/Warehouse lease attached
Fidelity Bank Note
Fidelity Bank Vault Agreement
▇▇▇▇▇▇ Armored payable
Cross payable
Officer loans (▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇)
Loomis payable
Commissions payable
Corporate Capital Management, LLC Note (see schedule 1.1)
Warrants to Corporate Capital Management, LLC (see schedule 1.1)
Warrants to Equity Securities Investments, Inc. (see schedule 1.1)
Schedule 2.2(p) Cash Systems-Title and authority
No exceptions
Schedule 2.4(d)
See Schedule 2.2(k)
Schedule 3.1(b) Cash Systems-Dividend declared or paid by other distribution
Cash Systems is contemplating a Stock Option Plan pursuant to
which options would be issued to employees and non-employees.
Schedule 5.1(f) Cash Systems-Agreed to exchange their shares
See Schedule 1.1
Schedule 5.1(h) Opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇
October 9, 2001
Unistone, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have served as counsel to Cash Systems, Inc., a Minnesota corporation
("Cash Systems"), in connection with the Plan of Reorganization and Stock
Exchange Agreement, dated as of October 9, 2001 (the "Agreement"), among Cash
Systems, Unistone, Inc., a Delaware corporation ("Unistone"), ▇▇▇▇▇▇ Services,
Inc., a Utah corporation ("▇▇▇▇▇▇ Services"), Corporate Capital Management
LLC, a Minnesota limited liability company ("CCM"), and the stock holders,
option holders, warrant holders and convertible note holders of Cash Systems
(the "Cash Systems Stockholders"). Except as specifically defined herein, all
capitalized terms used in this letter shall have the meanings given them under
the Agreement. This opinion is delivered to you pursuant to Section 5.1 (h)
of the Agreement.
As counsel for Cash Systems, we have reviewed the Agreement, and also
have examined and relied upon such other documents and instruments, and
certificates of public officials, and have made such other investigations and
inquiries as we have deemed necessary or appropriate for purposes of this
opinion. In stating our opinion, we have relied solely upon certificates of
officers of Cash Systems with respect to certain factual matters as we have
deemed necessary. For purposes of this opinion, we have also assumed, without
investigation: (a) the legal capacity of each natural person; (b) the full
power and authority of each person, other than Cash Systems and its officers,
to execute, deliver and perform each document heretofore executed and
delivered or hereafter to be executed and delivered, and to do each act
heretofore done or hereafter to be done by such person; (c) the due
authorization, execution and delivery by each person, other than Cash Systems
and its officers, of each document heretofore executed and delivered or
hereafter to be executed and delivered by such person; (d) the legality,
validity, binding effect and enforceability as to each person, other than Cash
Systems and its officers, of each document heretofore executed and delivered
or hereafter to be executed and delivered, and of each act heretofore done or
hereafter to be done by such person; (e) the genuineness of each signature
(other than signatures of the officers of Cash Systems) on and the
completeness of each document submitted to us as an original; (f) the
conformity to, and the authenticity of, the original of each document
submitted to us as a copy; (g) no modification of any provision of any
document, nor waiver of any right or remedy; and (h) no exercise of any right
or remedy other than in a commercially reasonable and conscionable manner and
in good faith.
As to questions of fact material to our opinion which have not been
independently established, we have relied upon, without independent
verification, the accuracy of the relevant facts stated in the certificates or
comparable documents of officers of Cash Systems and upon the accuracy of the
representations and warranties contained in the Agreement. Although we have
made no independent investigation or verification of each matter set forth
therein, nothing has come to our attention indicating that such reliance by us
or by you is not justified. In addition, and particularly with respect to
numbered paragraphs 5, 6 and 7 below, we wish to advise you that: (a) we have
not been engaged to give substantive attention to any Proceedings or Orders to
which Cash Systems may be a party; and (b) we have made no special
investigation as to the factual matters stated in our opinion, including any
search of the dockets or records of any court or governmental office, agency
or authority to determine if any such Proceedings are pending or Orders have
been entered involving Cash Systems.
The opinions hereafter expressed are qualified to the extent that the
rights, interests and remedies under the Documents (as defined below) may be
subject to or affected by: (a) any bankruptcy, insolvency, bank
conservatorship or receivership or similar laws affecting creditor's rights
and remedies generally, and the enforcement thereof; (b) the unavailability
of, or any limitation on the availability of, any particular right or remedy
(whether in a proceeding in equity or at law) because of general principles of
equity; and (c) any limitation insofar as indemnification and contribution
provisions thereof may be limited by applicable law.
We express no opinion concerning the applicability to Cash Systems, or
to the Agreement or any other documents, exhibits or schedules delivered in
connection with the transactions contemplated under the Agreement
(collectively, the "Documents"), of federal, state or local laws, rules,
regulations or ordinances relating to: (a) occupational health and safety,
environmental siting, impact and discharge, or storage and discharge of
flammable or hazardous materials or solid or toxic waste; (b) any federal or
state tax consequences arising in connection with the transactions
contemplated in the Documents; (c) patent, copyright, service ▇▇▇▇, trade name
or trademark rights; or (d) the accuracy, adequacy or legal sufficiency of any
personal property descriptions contained in the Documents.
On the basis of and subject to the foregoing and the qualifications
stated below, we are of the opinion that:
1. Cash Systems is duly organized, validly existing and in good
standing under the laws of the State of Minnesota and is qualified to do
business and is in good standing under the laws of the State of Minnesota. To
our knowledge, Cash Systems has full power and authority, corporate and
otherwise, to own, operate and lease its properties as presently owned,
operated and leased, and to carry on its business as it is now being
conducted.
2. The authorized capital stock of Cash Systems consists exclusively
of: (a) 50,000,000 common shares, $.01 par value per share, of which:
(i)10,050,000 shares are duly issued and outstanding, fully paid and non-
assessable; (ii) 300,000 shares issuable under outstanding option agreements
granted by Cash Systems; (iii) 500,000 shares issuable as Rule 701 shares
pursuant to a Consulting Agreement between and among Cash Systems, Corporate
Capital Management, LLC, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇; (iv)
321,000 shares issuable under outstanding warrants; and (v) 640,000 shares
issuable upon conversion of certain Convertible Promissory Notes of Cash
Systems; and (b) 2,000,000 preferred shares, no par value per share, none of
which shares is issued or outstanding. All such issued shares have been duly
and validly authorized and issued and are fully paid and nonassessable. To
our knowledge, except for the rights of Unistone under the Agreement and as
disclosed in the Schedules to the Agreement, there are no outstanding options,
agreements, contracts or other rights in existence to purchase or acquire from
Cash Systems any shares of capital stock of Cash Systems, whether now or
hereafter authorized or issued.
3. The execution, delivery and performance of the Agreement and the
Reorganization have been duly authorized and approved by the Board of
Directors of Cash Systems, this being the only corporate authorization and
approval hereof required under the articles of incorporation, or the bylaws,
of Cash Systems, and under all applicable laws. The Agreement constitutes the
legal, valid and binding obligation of Cash Systems enforceable in accordance
with its terms.
4. The execution, delivery and performance by Cash Systems of the
Agreement and the consummation of the Reorganization will not violate the
articles of incorporation, or the bylaws, of Cash Systems, and will not, to
our knowledge, violate, result in a breach of, or constitute a default under,
any Material Contract of which we have knowledge to which Cash Systems is a
party or to which its properties or assets may be bound.
With respect to the opinions expressed above, we are qualified to
practice law in the State of Minnesota and Illinois and express no opinion
concerning any law other than the laws of the State of Minnesota and Illinois.
To the extent any statement is made subject "to our knowledge" or words
of like import, such statement is limited to facts actually known, or facts
that would have been known after reasonable inquiry concerning the statement
made, by attorneys in our office who have participated in the representation
of Cash Systems.
This opinion is being furnished to you solely for your benefit in
connection with the Agreement. It may not be relied upon by, nor a copy of it
delivered to any other party, without our prior written consent. This opinion
is based upon our knowledge of the law and facts as of the date hereof, and we
assume no duty to communicate with you with respect to any matter that comes
to our attention hereafter.
Very truly yours,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇
Schedule 5.2(l) Opinion of Counsel of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.,
October 9, 2001
Cash Systems, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President and CEO
Re: Opinion of counsel rendered on behalf of Unistone,
Inc., a Delaware corporation ("Unistone"), and ▇▇▇▇▇▇
Services, Inc., a Utah corporation ("▇▇▇▇▇▇
Services"), as required by Article 5.2(j) of that
certain Plan of Reorganization and Stock Exchange
Agreement (the "Reorganization Agreement" and the
"Reorganization") between Unistone; ▇▇▇▇▇▇ Services;
Corporate Capital Management, LLC, a Minnesota limited
liability company ("CCM"); Cash Systems, Inc., a
Minnesota corporation ("Cash Systems"); and the
stockholders, option holders, warrant holders and
convertible note holders of Cash Systems (the "Cash
Systems Stockholders")
Dear Ladies and Gentlemen:
I have served as counsel for Unistone and ▇▇▇▇▇▇ Services in
connection with the negotiation, execution and consummation of the
Reorganization Agreement and related transactions, and I have been retained to
render the opinion of counsel required by Article 5.2(j) of the Reorganization
Agreement with respect to certain matters concerning this reorganization (the
"Reorganization").
I am also a stockholder of Unistone, but the Board of Directors of
Unistone and ▇▇▇▇▇▇ Services have been made aware of this fact and the fact
that I have represented ▇▇▇▇▇▇ Services, the principal stockholder of
Unistone, and CCM, a beneficial stockholder of Cash Systems, in matters
related to the Reorganization. The Board of Directors of Unistone and ▇▇▇▇▇▇
Services and CCM have waived any conflict in this respect. You have also been
previously advised of these potential conflicts of interest.
Assumptions
In rendering the opinion expressed below, I have assumed, with
your permission and without independent verification or investigation:
1. That all signatures on documents I have examined in
connection herewith (other than documents signed by representatives of
Unistone, ▇▇▇▇▇▇ Services and CCM) are genuine and that all items submitted to
me as original are authentic and all items submitted to me as copies conform
with originals;
2. Except for the documents stated herein, there are no
documents or agreements between Unistone and/or ▇▇▇▇▇▇ Services and/or any
third parties which would expand or otherwise modify the respective rights and
obligations of the parties as set forth in the documents referred to herein or
which would have an effect on the opinion herein;
3. That each of the documents referred to herein constitutes
the legal, valid and binding obligation of the party executing the same (other
than Unistone, ▇▇▇▇▇▇ Services and CCM); and
4. That as to all factual matters, each of the representations
and warranties contained in the documents referred to herein is true, accurate
and complete in all material respects, and the opinion expressed herein is
given in reliance thereon.
Further, in connection with rendering this opinion, I have
reviewed and examined originals or copies of the following documents, among
others, relating to Unistone, ▇▇▇▇▇▇ Services and/or Cash Systems, as
applicable, to-wit:
1. Articles of Incorporation and all amendments thereto;
2. Bylaws;
3. Organization and other pertinent minutes and/or consents
of their respective Boards of Directors;
4. 10-KSB Annual Report for the year ended December 31, 2000;
5. 10-QSB Quarterly Reports of Unistone for the past year;
6. The Reorganization Agreement; and
7. Various Consents of the Boards of Directors adopting and/or
authorizing the matters covered hereby.
I have also examined various other documents, books, records,
instruments and certificates of public officials, directors, executive
officers and agents of Unistone, and have made such investigations as I have
deemed reasonable, necessary or prudent under the circumstances. Also, in
rendering this opinion, I have reviewed various statutes and judicial
precedence as I have deemed relevant or necessary.
All terms used herein shall have the meanings given such terms in
the Reorganization Agreement.
Based upon and subject to the foregoing:
Unistone has the corporate authority to issue a total of
50,000,000 shares of common stock, $0.001 par value per share, of which
3,507,493 shares are presently issued and outstanding; 2,407,493 shares of
common stock that are owned by ▇▇▇▇▇▇ Services will be canceled in accordance
with the Reorganization Agreement. None of the outstanding shares of Unistone
common stock are subject to pre-emptive rights or were issued in violation of
any pre-emptive rights. Further, to the best of my personal knowledge, except
as set forth on Schedule 2.1(e)(ii) to the Reorganization Agreement, or as
contemplated in the confidential private placement memorandum to be utilized
in the PPM or Article I of the Reorganization Agreement, there are no present
and on the closing date there will be no outstanding subscriptions, options,
warrants, contracts, calls, puts, agreements, demands or other commitments or
rights of any type to purchase or acquire any securities of Unistone, nor are
there outstanding securities of Unistone which are convertible into or
exchangeable for any shares of capital stock of Unistone, and Unistone has no
obligation of any kind to issue any additional securities.
Unistone is a validly existing corporation under the laws of the
State of Delaware and has full corporate power and authority under such laws
to own its properties and to conduct its business. To the best of my
personal knowledge, Unistone is qualified to conduct business as a foreign
corporation in each jurisdiction where the nature of its business activities
requires such qualification except where failure to so qualify would not have
a material adverse effect upon the business or financial condition of
Unistone.
▇▇▇▇▇▇ Services is a validly existing corporation under the laws
of the State of Utah and has full corporate power and authority under such
laws to own its properties and to conduct its business.
To the best of my personal knowledge, Unistone's shares of common
stock that are issued and outstanding, are fully paid and non-assessable and
that the shares issuable under the Reorganization Agreement, when issued and
paid for in accordance with their terms, will be fully paid and non-
assessable. Unistone has authorized the issuance of the shares under the
Reorganization Agreement; and has full power and authority to issue the same
on the terms and conditions set forth in the Reorganization Agreement, as
provided in the Unanimous Consent of the Board of Directors adopting the
Reorganization Agreement.
Except as set forth in Article 2.1(h) of the Reorganization
Agreement, neither the execution and delivery of the Reorganization Agreement,
nor compliance with the terms and provisions thereof, including without
limitation the consummation of the transactions contemplated thereby, will
violate any statute, regulation or ordinance of any governmental authority, or
conflict with or result in the material breach of any term, condition or
provision of the Articles of incorporation, Certificate of Incorporation,
Bylaws or other charter documents of Unistone or ▇▇▇▇▇▇ Services, nor of any
agreement, deed, contract, mortgage, indenture, writ, order, decree, legal
obligation or instrument to which Unistone or ▇▇▇▇▇▇ Services is a party or by
which any of them or any of their assets or properties are or may be bound; or
constitute a material default (or an event which, with the lapse of time or
the giving of notice, or both, would constitute a material default)
thereunder, nor result in the creation or imposition or any lien, charge or
encumbrance, or restriction of any nature whatsoever with respect to any
properties or assets of Unistone or ▇▇▇▇▇▇ Services, nor give to others any
interest or rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets, contracts or
business of Unistone or ▇▇▇▇▇▇ Services. The Reorganization Agreement and all
other agreements and documents delivered by Unistone, ▇▇▇▇▇▇ Services or CCM
in connection therewith have been duly executed and delivered by Unistone,
▇▇▇▇▇▇ Services and CCM and constitute valid and binding obligations of
Unistone, ▇▇▇▇▇▇ Services and CCM enforceable in accordance with their
respective terms. Execution of the Reorganization Agreement and performance
by Unistone and ▇▇▇▇▇▇ Services thereunder have been duly authorized by all
requisite corporate action on their respective parts, and performance
thereunder will not violate any provision of its Articles of Incorporation,
Bylaws, agreements, mortgages or other commitments of any type or nature
whatsoever or any law, order, regulation or decree applicable to either of
them or their respective properties, except that no opinion is expressed as to
the validity of the indemnification provisions insofar as they are or may be
held to be violative of public policy (under either state or federal law), the
availability of specific performance or other equitable remedies, the effects
of bankruptcy, insolvency, moratorium and all other similar laws and decisions
affecting the rights of creditors generally.
I presently know of no reason why Unistone will not be able to
register all of its shares of common stock described in Article 1.8 of the
Reorganization Agreement on Form SB-2 of the Securities and Exchange
Commission, nor why any such Registration Statement would not be declared
effective by the Securities and Exchange Commission, so long as the
reorganized Unistone complies with all of the rules and regulations of the
Securities and Exchange Commission applicable to the use of Form SB-2
following the consummation of the Reorganization.
To the best of my knowledge, no approval or authorization of or
filing with any governmental authority, including the Securities and Exchange
Commission, or any other person or entity on the part of Unistone or ▇▇▇▇▇▇
Services is required as a condition to the execution and delivery of the
Agreement or the consummation of the transactions contemplated thereby other
than the filing of any documents contemplated by the Agreement.
I presently know of no reason why the NASD will not permit
Unistone to register its shares for trading on any other market or exchange
operated by the NASD, so long as Unistone complies with all of the rules and
regulations of the NASD or other market or exchange following the consummation
of the Reorganization.
To the best of my knowledge, the Unistone shareholders listed in
Schedule 2.1(q) are together the holders of record and, to the knowledge of
Unistone, the sole beneficial owners, of all of the outstanding Unistone
common stock.
To the best of my knowledge, no director, officer or employee of
Unistone or ▇▇▇▇▇▇ Services has any claim of any nature against Unistone.
Unistone has authorized by written consent of its Board of
Directors and its stockholders amendments to its Articles of Incorporation
that allow it to change the name of Unistone to "Cash Systems, Inc."
To the best of my personal knowledge, I know of no inaccuracy in
the representations of and warranties of Unistone contained in the
Reorganization Agreement.
Thank you very much.
Yours very sincerely,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
LWB
cc: Unistone, Inc.
Schedule 5.2(m) Investment Letter
American Registrar & Transfer Co.
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Unistone, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: Exchange of shares of Cash Systems, Inc., a Minnesota corporation
("Cash Systems"), for shares of Unistone, Inc., a Delaware
corporation ("Unistone" or "Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Plan of Reorganization and Stock
Exchange Agreement (the "Agreement") between the undersigned, Cash Systems,
the other stockholders of Cash Systems and Unistone, I acknowledge that I
have approved this exchange; that I am aware of all of the terms and
conditions of the Agreement. I represent and warrant that (i) I am an
"accredited investor" or, either alone or with the aid of a "purchaser
representative" am a "sophisticated investor"; (ii) I understand the
"unregistered" and "restricted" nature of the shares of Unistone being
received under the Agreement in exchange for the Cash Systems Shares; (iii)
I have received and reviewed a copy of any and all material documents
regarding the Company, including, but not limited to all reports filed with
the Securities and Exchange Commission for the past twelve months; (iv) I
hereby waive and compromise any pre-emptive rights relating to the prior
issuance of shares of any of the Cash Systems Shares; and (v) I hereby
compromise and/or waive any claims I have or may have against Cash Systems
by reason of the purchase of any securities of Cash Systems prior to the
Closing of the Agreement.
I understand that you have and will make books and records of
your Company available to me for my inspection in connection with the
contemplated exchange of my shares, and that I have been encouraged to
review the information and ask any questions I may have concerning the
information of any director or officer of the Company or of the legal and
accounting firms for the Company. I understand that the accounting firm
for Unistone is ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & Associates, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇,
#▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Telephone (▇▇▇) ▇▇▇-▇▇▇▇; and that legal
counsel for Unistone is ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Telephone #▇▇▇-▇▇▇-▇▇▇▇.
Exclusive of any shares of common stock that I receive in the
exchange that may be registered pursuant to the Agreement, I also
understand that I must bear the economic risk of ownership of any of the
Unistone shares for a long period of time, the minimum of which will be one
(1) year, as these shares are "unregistered" shares and may not be sold
unless any subsequent offer or sale is registered with the United States
Securities and Exchange Commission or otherwise exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Act"), or other applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein
and those in the personal questionnaire (if applicable) I provided to Cash
Systems for use by Unistone as they are made to induce you to issue me the
shares of Unistone under the Agreement, and I further represent (of my
personal knowledge or by virtue of my reliance on one or more personal
representatives), and agree as follows, except with respect to any shares
of common stock that I receive in the exchange that may be registered
pursuant to the Agreement, to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the
phrase "for investment purposes and not with a view toward further
distribution";
3. That I understand the meaning of "unregistered shares"
and know that they are not freely tradeable;
4. That any stock certificate issued by you to me in
connection with the shares being acquired shall be imprinted with a legend
restricting the sale, assignment, hypothecation or other disposition unless
it can be made in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any transfer
of any stock certificate representing any of the shares being acquired
unless I shall first have obtained an opinion of legal counsel to the
effect that the shares may be sold in accordance with applicable laws,
rules and regulations, and I understand that any opinion must be from legal
counsel satisfactory to the Company and, regardless of any opinion, I
understand that the exemption covered by any opinion must in fact be
applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares
being acquired except as may be pursuant to any applicable laws, rules and
regulations;
7. I fully understand that my shares which are being
exchanged for shares of the Company are "risk capital," and I am fully
capable of bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Unistone, all shares of Unistone to be issued and delivered to me in
exchange for my shares of Cash Systems shall be represented by one stock
certificate only and which such stock certificate shall be imprinted with
the following legend or a reasonable facsimile thereof on the front and
reverse sides thereof:
The shares of stock represented by this certificate
have not been registered under the Securities Act
of 1933, as amended, and may not be sold or
otherwise transferred unless compliance with the
registration provisions of such Act has been made
or unless availability of an exemption from such
registration provisions has been established, or
unless sold pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting forth
all relevant facts relating to the request. Unistone will attempt to
accommodate any stockholders' request where Unistone views the request is
made for valid business or personal reasons so long as in the sole
discretion of Unistone, the granting of the request will not facilitate a
"public" distribution of unregistered shares of common voting stock of
Unistone.
You are requested and instructed to issue a stock certificate
as follows, to-wit:
________________________________________________________
(Name(s) and Number of Shares)
________________________________________________________
(Address)
________________________________________________________
(City, State and Zip Code)
If joint tenancy with full rights of survivorship
is desired, put the initials JTRS after your names.
Dated this ________ day of _______________________, 2001.
Very truly yours,
________________________________
Schedule 9.3 Brokers
No Exceptions; however, ▇▇▇▇▇▇ Services is conveying up to
771,513 shares of common stock of Unistone that are owned by it or its
associates to CCM.
