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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
SEPTEMBER 5, 1996
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STRUTHERS INDUSTRIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 0-2707 73-0746455
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
601 ONEOK PLAZA, 100 WEST FIFTH STREET, TULSA, OKLAHOMA 74103
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(Address of principal executive offices)
Registrant's telephone number, including area code (918) 582-1788
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STRUTHERS INDUSTRIES, INC.
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
On September 5, 1996, Struthers Industries, Inc. ("Struthers" or the
"Company") entered into that certain Agreement and Plan of Reorganization by and
among WINCO Corp., a Delaware corporation ("WINCO"), WINCO's wholly-owned
subsidiary, WINCOM Corp., a Delaware corporation ("WINCOM"), a wireless
communications company, and Struthers (the "Agreement"). Pursuant to the
Agreement, on September 5, 1996, WINCO acquired a total of 13 million shares of
common stock of Struthers, plus additional shares to be issued to WINCO by
Struthers as described below, in exchange for the acquisition by Struthers of
one hundred percent (100%) of the issued and outstanding shares of common stock
of WINCOM. The issuance of the 13 million shares of common stock by Struthers to
WINCO gave WINCO 52.6% ownership of Struthers, thereby giving effective control
of Struthers to WINCO at that time.
The Agreement also calls for the issuance of 125,490,856 additional
shares (53,333,613 post-reverse split) by Struthers to WINCO after certain
regulatory and Delaware corporate law requirements are met. After the
completion of the additional issuance of shares of common stock by Struthers to
WINCO, as described below, WINCO will own in excess of 90% of the issued and
outstanding common stock of Struthers, with WINCOM being a wholly-owned
subsidiary of Struthers. Struthers will be issuing the additional shares to
WINCO as soon as an amendment to Struthers' Certificate of Incorporation has
been effected, increasing Struthers' number of authorized shares of common
stock from 25 million to 98 million (post-reverse stock split). Such amendment
will also authorize a .425 for one share reverse stock split, reduce the par
value from $.10 to $.01 per share and change the name of Struthers to WINCOM,
Inc. This amendment has already been approved by the holders of a majority of
the issued and outstanding common stock of Struthers, as required under
Delaware corporate law.
In addition, the Agreement calls for the members of the Board of
Directors of Struthers to be replaced with persons designated by WINCO as soon
as all requisite filings are made with the Securities and Exchange Commission. A
Statement re Change in Majority of Directors Pursuant to Rule 14f-1 of the
Securities Exchange Act of 1934 is being filed with the Commission concurrently
with this Form and is in the process of being mailed to the stockholders of the
Company. The stockholders will also be receiving an Information Statement on
Form 14C describing the above transaction with WINCO and WINCOM and the changes
necessitated by such transaction to Struthers' Certificate of Incorporation; the
Form 14C is currently in the process of being prepared and will be filed as soon
as practicable. See a copy of the Agreement attached hereto as Exhibit 2.1.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
As discussed above in Item 1, the control of the assets of WINCOM
represented by the acquisition of one hundred percent (100%) of the common stock
of WINCOM was acquired by the Company on September 5, 1996 pursuant to the
Agreement. WINCOM is a developmental stage company engaged in the formation and
implementation of commercial enterprises involving the
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telecommunications industry. WINCOM, which was incorporated in Delaware in 1993,
has no history of operations and has a significant percentage of its assets in
real property, a portion of which it is holding as a capital reserve. The
mailing address of WINCOM's executive offices is 1875 Century Park East, Suite
930, Los Angeles, California 90067; the telephone number is (310) 557-1875.
Currently, WINCOM's major business activities are focused in the
following areas: (1) the development and deployment of commercial applications
for Interactive Video and Data Service ("IVDS") systems to be placed in service
pursuant to IVDS broadcast licenses proposed to be transferred to WINCOM,
subject to the approval of the Federal Communications Commission (the "FCC");
(2) the distribution and development of television programming and "new media",
and (3) the development and commercial application of telecommunications
technologies complementary to WINCOM's proposed television programming and IVDS
systems. IVDS systems involve a particular bandwidth (218-219 megahertz)
licensed by the FCC to facilitate instantaneous two-way interactivity and
communication over the air, rather than through telephone or cable wires.
Potential commercial applications include automatic utility meter reading and
control systems, home security systems, opinion polling and voting, coupon
merchandising, vehicle location systems and as a return path for cable,
wireless, direct broadcast satellite ("DBS"), smart phone systems and mobile
intelligent communicators. "New media" is in the business of providing audio,
video and graphical content for cable, broadcast, CD-ROM and online services for
entertainment, information, merchandising, advertising and education. The
Company also intends to pursue long-term, growth- oriented strategies to enhance
WINCOM's business activities, particularly through business acquisitions,
strategic alliances, joint ventures and long-term distribution and licensing
agreements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is currently impracticable to provide the financial statements of
WINCOM for the period ended June 30, 1996. Such financial statements will be
provided as soon as practicable, no later than 60 days from the filing of this
Form by amendment on Form 8.
(b) PRO FORMA FINANCIAL INFORMATION.
It is also currently impracticable to provide the required pro forma
financial information relating to the acquisition of WINCOM by the Company. Such
information will be provided as soon as practicable, no later than 60 days from
the filing of this Form by amendment on Form 8.
(c) EXHIBITS.
2.1 Agreement and Plan of Reorganization by and among Struthers
Industries, Inc., WINCOM Corp. and WINCO Corp.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
STRUTHERS INDUSTRIES INC.
By: /s/ Sean P. O'Keefe
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Sean P. O'Keefe, President
Date: September 20, 1996
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AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
STRUTHERS INDUSTRIES, INC., WINCOM CORP.
AND WINCO CORP.
This Agreement and Plan of Reorganization ("Agreement") is entered into
this _____ of September 1996, by and among STRUTHERS INDUSTRIES, INC., a
Delaware corporation (hereinafter referred to as "Buyer"), WINCOM CORP., a
Delaware corporation (hereinafter referred to as "WINCOM"), and WINCO CORP., a
Delaware corporation, (hereinafter referred to as "Seller"), being the sole
record common shareholder of WINCOM.
WHEREAS, as a result of changed business circumstances since the
Agreement and Plan of Merger was executed by WINCOM and Buyer on June 14, 1996,
the parties hereto have determined that it would be in the best interests of
their companies and respective stockholders to enter into this Agreement, which
replaces and supersedes such Agreement and Plan of Merger, and to withdraw from
consideration and review by the SEC the Preliminary Proxy Statement filed by
Buyer with the SEC on June 14, 1996, which reflected the proposed merger between
WINCOM and Buyer; and
WHEREAS, it is necessary to close the transactions contemplated in this
Agreement by September 5, 1996, due to the probable adverse financial and other
consequences to Buyer, arising out of the settlement agreement with the
claimants in two class action lawsuits filed against Buyer, which consequences
will likely occur if the Agreement does not close by that date; and
WHEREAS, the parties acknowledge that to accomplish the reorganization
contemplated in this Agreement, following all requisite legal compliance and
governmental approvals, two of the members of the Board of Directors of Buyer
will be replaced with representatives of WINCO and that the Certificate of
Incorporation of Buyer will need to be amended to effect the transactions
contemplated in this Agreement; and
WHEREAS, Seller is the owner of record of Seventy-Four Million
Thirty-One Thousand Nine Hundred Ninety-Two (74,031,992) shares of the issued
and outstanding shares of common stock of WINCOM, representing one hundred
percent (100%) of the issued and outstanding shares of common stock of WINCOM
(the "Common Shares"); and
WHEREAS, Seller desires to sell all of the Common Shares to Buyer, and
Buyer desires to purchase the Common Shares, upon the terms and conditions set
forth herein; and
WHEREAS, the parties intend that the exchange of Common Shares for
shares of Buyer's common stock, as contemplated herein, qualify as a tax free
transaction under Section 351 of the Internal Revenue Code;
WHEREAS, following the issuance of all shares of common stock of Buyer
to Seller contemplated in this Agreement, Buyer will make a tax free exchange
offer for all outstanding preferred shares of WINCOM, with the purchase price
and type of securities to be offered to be determined by Buyer at a later date.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1. SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from Seller,
the Common Shares.
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2. CLOSING. The purchase shall be consummated at a closing ("Closing")
to take place at 11:00 o'clock a.m., at the offices of Buyer on or about
September 5, 1996 ("Closing Date").
3. PURCHASE PRICE. The purchase price ("Purchase Price") for the Shares
shall be One Hundred Thirty-Eight Million Four Hundred Eighty Thousand Eight
Hundred Fifty-Six (138,480,856) shares of common stock of Buyer (prior to the
.425 for one reverse split to be effected by Buyer upon the filing of its
Restated Certificate of Incorporation) delivered as follows:
(a) At the Closing, Buyer shall issue to Seller Thirteen
Million (13,000,000) shares of Buyer's common stock (pre-reverse split)
which upon issuance will represent approximately the remaining
authorized, but unissued shares of common stock available for issuance
by Buyer; and
(b) At the Closing, Seller shall deliver to Buyer a proxy in
the form as attached hereto as Exhibit "A" authorizing G. David Gordon,
Acting President of Buyer to vote Seller's shares of common stock of
Buyer in favor of the proposed amendment to Buyer's Certificate of
Incorporation necessitated by this transaction.
(c) One day after Buyer receives its Restated Certificate of
Incorporation from the Secretary of State of the State of Delaware,
which will, among other actions, increase Buyer's authorized shares of
common stock (post-reverse split) to Ninety Eight Million (98,000,000),
Buyer shall deliver to Seller the remaining One Hundred Twenty-Five
Million Four Hundred Ninety Thousand Eight Hundred Fifty-Six
(125,490,856) shares (pre-reverse split) of common stock (or Fifty
Three Million Three Hundred Thirty Three Thousand Six Hundred Thirteen
(53,333,613) shares (post-reverse split)) in two certificates in the
respective amounts of Forty Seven Million One Hundred Sixty Two
Thousand Eight Hundred Thirty (47,162,830) shares (post-reverse split)
and Six Million One Hundred Seventy Thousand Seven Hundred Eighty-Three
(6,170,783) shares (post-reverse split). If for any reason whatsoever,
the present Board of Directors of Buyer has not been replaced by
representatives of Seller by March 30, 1997, Buyer shall deliver the
equivalent of the remaining One Hundred Twenty-Five Million Four
Hundred Ninety Thousand Eight Hundred Fifty-Six (125,490,856) shares
(pre-reverse split) of common stock to Seller no later than March 31,
1997, in a manner that preserves the tax-free nature of the transaction
contemplated by this Agreement.
1.4 ADDITIONAL AGREEMENTS. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Letters of resignation from two of the three present members of the
Board of Directors of Buyer and from G. David Gordon as Acting
President and Secretary of Buyer, copies of which are attached hereto
as Exhibit "A-1". The remaining member of the Board of Directors of
Buyer, G. David Gordon, shall appoint as their successors two
representatives of Seller to the Board of Directors of Buyer, in
accordance with the Bylaws of Buyer. Such letters shall be effective
only in compliance with applicable securities laws and regulations of
the Securities and Exchange Commission.
(b) Stock certificates representing all of the Common Shares, duly
endorsed to Buyer and in blank or assignments separate from the
certificates, transferring the Common Shares from Seller to Buyer,
copies of which are attached hereto as Exhibit "B".
1.5 APPRAISAL RIGHTS. Although not required under Delaware law, after
Closing, at the time of its Annual Meeting of Shareholders, in the exercise of
an abundance of good faith, Buyer will provide appraisal rights comparable to
Section 262 of the Delaware General Corporation Law to its shareholders as if
WINCOM were being merged with and into Buyer. Although the shareholders of Buyer
of record as of the execution of this Agreement will not be required to vote
upon this Agreement, they will be given the opportunity at the first Annual
Meeting following the execution of this Agreement to elect to have the value of
their common stock appraised and to receive a cash payment equal to the
appraised value of each share of common stock of Buyer. The procedures for
electing
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such appraisal rights shall be contained in a document to be prepared and
provided to shareholders of Buyer after the Closing and before the Annual
Meeting.
1.6 BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreements listed in paragraph 1.4, are sometimes referred to as the "Basic
Agreements". The transactions contemplated by the Basic Agreements are sometimes
referred to as the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 REPRESENTATIONS AND WARRANTIES OF WINCOM. WINCOM represents and
warrants to Buyer, to the best of its knowledge and belief, as follows:
(a) ORGANIZATION. WINCOM is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware. WINCOM has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business.
WINCOM is duly qualified and in good standing as a foreign corporation
in each jurisdiction where its ownership of property or operation of
its business requires qualification, except where the failure to be
qualified would not have a material adverse effect on WINCOM.
(b) CAPITAL STRUCTURE. The authorized capital stock of WINCOM
consists of Seventy-Five Million (75,000,000) shares of common stock,
$.001 par value (the "WINCOM Common Stock") and Ten Million Seven
Hundred (10,700,000) shares of preferred stock, $.001 par value (the
"WINCOM Preferred Stock"), of which (i) Nine Hundred Thousand (900,000)
shares are designated Series "A" Cumulative Convertible Preferred Stock
(the "WINCOM Series A Preferred Stock"); (ii) One Million Two Hundred
Thousand (1,200,000) shares are designated Series "B" Cumulative
Convertible Preferred Stock (the "WINCOM Series B Preferred Stock");
(iii) Six Million (6,000,000) shares are designated Series "C"
Cumulative Convertible Preferred Stock (the "WINCOM Series C Preferred
Stock"); and (iv) Two Million Three Hundred Eighty Thousand Nine
Hundred Fifty-Two (2,380,952) shares are designated Series "D"
Convertible Cumulative Preferred Stock (the "WINCOM Series D Preferred
Stock"). At the close of business on May 31, 1996, Seventy-Four Million
Thirty-Five Thousand Nine Hundred Ninety-Two (74,035,992) shares of
WINCOM Common Stock, Nine Hundred Thousand (900,000) shares of WINCOM
Series A Preferred Stock, One Million Two Hundred Thousand (1,200,000)
shares of WINCOM Series B Preferred Stock, Six Million (6,000,000)
shares of WINCOM Series C Preferred Stock and no shares of WINCOM
Series D Preferred Stock were issued and outstanding. All shares of
WINCOM Preferred Stock enjoy preferences over WINCOM's with respect to
liquidation of assets of WINCOM. Except as set forth above and except
for commitments by WINCOM to issue up to Two Million Three Hundred
Eighty Thousand Nine Hundred Fifty-Two (2,380,952) shares of WINCOM
Series D Preferred Stock, at the close of business on May 31, 1996 no
shares of capital stock or other voting securities of WINCOM were
issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of WINCOM were, when issued, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of
WINCOM having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which
stockholders of WINCOM may vote. Except as set forth above, as of the
date of execution of this Agreement, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which WINCOM is a party or
by which WINCOM is bound or obligated, to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital
stock or other voting securities of WINCOM thereby obligating WINCOM to
either issue, deliver or sell, or cause to be issued, delivered, or
sold such security, option, warrant, call or right. Except as set forth
on Exhibit "C", there are no outstanding contractual obligations of
WINCOM to repurchase, redeem or otherwise acquire any shares of its
capital stock.
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(c) AUTHORITY. WINCOM has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon WINCOM, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by WINCOM,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any material agreement by which WINCOM is a party or
by which WINCOM or any of its material properties or assets are bound
or affected.
(d) COMPANY FINANCIAL STATEMENTS. WINCOM's Financial
Statements as of March 31, 1996 reflecting total assets of
approximately One Hundred Twenty-Four Million Six Hundred Fifty-Two
Thousand Five Hundred Sixty-Three Dollars ($124,652,563) and Thirty-Six
Million Seven Hundred Thirty- Four Thousand Sixty-Five dollars
($36,734,065) in total liabilities, were prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with prior periods and fairly present the financial position of WINCOM
as of March 31, 1996. WINCOM's Financial Statements as of March 31,
1996 were reviewed but not audited by BDO Seidman, L.L.P.
(e) NO UNDISCLOSED LIABILITIES. Except as set forth in
WINCOM's Financial Statements previously delivered to Buyer and as set
forth on Exhibit "D" attached hereto, WINCOM is not aware of any
material liabilities for which WINCOM is liable or will become liable
in the future.
(f) TAXES. WINCOM has filed all federal, state, local tax and
other returns and reports which were required to be filed with respect
to all taxes, levies, imposts, duties, licenses and registration fees,
charges or withholdings of every nature whatsoever ("Taxes"), and there
exists a substantial basis in law and fact for all positions taken in
such reports. No waivers of periods of limitation are in effect with
respect to any taxes arising from and attributable to the ownership of
properties or operations of the business of WINCOM.
(g) PROPERTIES. WINCOM has good and marketable title to all
its material personal property, equipment, processes, patents,
copyrights, trademarks, franchises, licenses and other material
properties and assets (except for items leased or licensed to WINCOM),
including all property reflected in WINCOM's Financial Statements
(except for assets reflected therein which have been sold in the normal
course of its business where the proceeds from such sale or other
disposition have been properly accounted for in the financial
statements of WINCOM), in each case free and clear of all material
liens, claims and encumbrances of every kind and character, except as
set forth in Exhibit "E". The assets and properties owned, operated or
leased by WINCOM and used in its business are in good operating
condition, reasonable wear and tear excepted, and suitable for the uses
for which intended.
(h) BOOKS AND RECORDS. The books and records of WINCOM are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect, in all
material respects, the financial condition and results of operations of
WINCOM as set forth in WINCOM's Financial Statements.
(i) INSURANCE. Exhibit "F" contains an accurate and complete
list and brief description of all performance bonds and policies of
insurance, including fire and extended coverage, general liability,
workers compensation, products liability, property, and other forms of
insurance or indemnity bonds held by WINCOM. All policies of insurance
are: (1) in full force and effect; (2) are sufficient for compliance by
WINCOM with all requirements of law and of all agreements and
instruments to which WINCOM is a party; (3) are valid, outstanding and
enforceable; (4) provide adequate insurance coverage for the assets,
business and operations of WINCOM in amounts at least equal to
customary coverage in WINCOM's industry; (5) will remain in full force
and effect through the Closing; and (6) will not be affected by, and
will not terminate or lapse by reason of, the transactions contemplated
by this Agreement.
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(j) TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in
Exhibit "G", WINCOM has no outstanding material agreement,
understanding, contract, lease, commitment, loan or other material
arrangement with any officer, director or shareholder of WINCOM or any
relative of any such person, or any corporation or other entity in
which such person owns a beneficial interest.
(k) MATERIAL CONTRACTS. Except as set forth in Exhibit "H",
WINCOM has no purchase, sale, commitment, or other contract, the breach
or termination of which would have a materially adverse effect on the
business, financial condition, results of operations, assets,
liabilities, or prospects of WINCOM.
(l) EMPLOYMENT MATTERS. Exhibit "I" contains a list of all
WINCOM's officers, their base salaries, accrued vacation pay, sick pay,
and severance pay through June 30, 1996. Except as set forth in Exhibit
"J", WINCOM is not a party to any employment agreement, or any pension,
profit sharing, retirement or other deferred compensation plan or
agreement. WINCOM has not incurred any unfunded deficiency or liability
within the meaning of the Employee Retirement Income Security Act of
1974 ("ERISA"), has not incurred any liability to the Pension Benefit
Guaranty Corporation established under ERISA in connection with any
employee benefit plan and has no outstanding obligations or liabilities
under any employee benefit plan. WINCOM has not been a party to a
"prohibited transaction," as that term is defined in relationship to
matters relating to ERISA such that WINCOM would be subject to any tax
or penalty. There is no collective bargaining agreement or negotiations
therefor, labor grievance or arbitration proceeding against WINCOM
pending or threatened, and there are no union organizing activities
currently pending or threatened against or involving WINCOM.
(m) AUTHORIZATIONS. WINCOM as no licenses, permits, approvals
and other authorizations from any governmental agencies and any other
entities that are materially necessary for the conduct of its business,
except as set forth in Exhibit "K" which contains a list of all
material licenses, permits, approvals, and other material
authorizations, as well as a list of all material copyrights, patents,
trademarks, trade names, service marks, franchises, licenses and other
material permits, each of which is valid and in full force and effect.
(n) NO POWERS OF ATTORNEY. WINCOM has no powers of attorney or
similar authorizations outstanding.
(o) COMPLIANCE WITH LAWS AND REGULATIONS. WINCOM is not in
violation of any federal, state, local or other law, ordinance, rule or
regulation applicable to its business. Both WINCOM and the Buyer have
been apprised by the staff of the Securities and Exchange Commission
("SEC") that the staff has initiated an informal inquiry into certain
matters arising out of the review of a Proxy Statement filed by the
Buyer, reflecting a proposed merger between WINCOM and the Buyer. Other
than the comments made by the staff in the context of presenting its
concerns about certain statements that were made to investors in a May
1, 1996 letter to shareholders by representatives of WINCOM and a May
29, 1996 teleconference in which a representative of WINCOM
participated, neither WINCOM nor the Buyer have been informed as to the
specific matters under review by the staff of the SEC. Otherwise,
WINCOM has not received an actual or threatened complaint, citation or
notice of violation or investigation from any governmental authority,
in each case where such violation would have an adverse effect on
WINCOM.
(p) COMPLIANCE WITH ENVIRONMENTAL LAWS. WINCOM is in
compliance with all applicable pollution control and environmental
laws, rules and regulations in all material respects. WINCOM has no
licenses, permits and other authorizations held by WINCOM relative to
compliance with environmental laws, rules and regulations.
(q) NO LITIGATION. There are no actions, suits, claims,
complaints or proceedings pending against WINCOM, at law or in equity.
Except as noted above in paragraph (o) above, WINCOM is unaware of any
actions, suits, claims, or complaints or proceedings before or by any
governmental department, commission, court, board, bureau, agency or
instrumentality. There are no facts which would
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provide a valid basis for any such action, suit or proceeding, either
by a government agency or by private parties which, if determined
adversely to WINCOM, would have a material adverse effect on WINCOM.
Additionally, there are no orders, judgments or decrees of any
governmental authority outstanding which specifically apply to WINCOM
or any of its assets.
(r) VALIDITY. All material contracts, agreements, leases and
licenses to which WINCOM is a party or by which it or any of its
material properties or assets are bound or affected, are valid and in
full force and effect; and no breach or default exists, or upon the
giving of notice or lapse of time, or both, would exist, on the part of
WINCOM or by any other party thereto.
(s) NO ADVERSE CHANGES. WINCOM knows of no actual or
threatened developments that have occurred since June 30, 1996 that
have the potential to materially adversely impact upon the financial
condition, results of operations, amount of assets, amount of
liabilities, or prospects of WINCOM.
(t) FEES. All negotiations relating to the Basic Agreements
and the Transactions have been conducted by WINCOM in such a manner as
not to give rise to any valid claim for any finder's fees, brokerage
commission, financial advisory fee or related expense or other like
payment for which WINCOM or Buyer are or may be liable.
(u) FULL DISCLOSURE. WINCOM has provided to Buyer all
information relating to the financial condition, results of operations,
amount of assets, amount of liabilities, or prospects of WINCOM.
Attached hereto as Exhibit "L" is an Abstract of Material Contracts,
Agreements and Memorandum of Understanding, which reflects all
contracts, agreements and memorandum of understanding entered into by
WINCOM between February 10, 1996 and August 20, 1996.
(v) CONVERSION OF PREFERRED STOCK AFTER CLOSING. With respect
to WINCOM's Preferred stock, WINCOM has informed Buyer that after the
Closing, Buyer will have the obligation to convert the shares of Series
A, Series B, Series C and Series D of WINCOM's Preferred Stockholders
into shares of Buyer's common stock as follows:
(i) Series A Preferred shareholders will receive two (2) shares of
WINCOM common stock for each share of Series A stock owned; and (ii)
Series B Preferred shareholders will receive one and one-half (1.50)
shares of WINCOM common stock for each share of Series B stock owned;
and (iii) Series C Preferred shareholders will receive two (2) shares
of WINCOM common stock for each share of Series C stock owned; and (iv)
Series D Preferred shareholders will receive one and one-half (1.50)
shares of WINCOM common stock for each share of Series D stock owned;
2.2 REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer to the best of its knowledge and belief, with respect to the
Shares owned by Seller, as follows:
(a) ORGANIZATION. Seller is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware. Seller has all requisite corporate power and authority to
own, lease and operate its properties and to carry on its business.
Seller is qualified and in good standing as a foreign corporation in
each jurisdiction where its ownership of property or operation of its
business requires qualification, except where the failure to be
qualified would not have a material adverse effect on Seller.
(b) AUTHORITY. Seller has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated hereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Seller, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Seller,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of, or default under, or gives to others any
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interest or right of termination, cancellation or acceleration in or
with respect to, any material agreement by which Seller is a party or
by which a Seller or any of its material properties, or assets are
bound or affected.
(c) TITLE TO THE SHARES. At the Closing, Seller shall own of
record and beneficially the Common Shares of WINCOM, free and clear of
all liens, encumbrances, pledges, claims, options, charges and
assessments of any nature whatsoever, with full right and lawful
authority to transfer the Common Shares to Buyer. Except for certain
rights of Seller which shall be waived at Closing, no person has any
preemptive rights or rights of first refusal with respect to any of the
Shares. There exists no voting agreement, voting trust, or outstanding
proxy with respect to any of the Common Shares, except for that certain
Shareholders' Agreement dated as of September 5, 1996 by and among
Seller, WINCOM and the certain beneficial stockholders of WINCOM. There
are no outstanding rights, options, warrants, calls, commitments, or
any other agreements of any character, whether oral or written, with
respect to the Common Shares.
(d) INVESTMENT INTENT. Seller is acquiring the shares of Buyer
for its own account, for investment purposes only, and not with a view
to the sale or distribution of any part thereof, and Seller has no
present intention of selling, granting participation in, or otherwise
distributing the same. Seller understands the specific risks related to
an investment in the shares of Buyer, especially as it relates to the
financial performance of Buyer. Seller has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof, except with respect
to that certain Shareholders Agreement dated as of September 5, 1996
discussed above in subsection (c). Seller will hold Buyer's shares of
common stock in a manner commensurate with a private offering by Buyer
as that term is defined by the Securities and Exchange Commission.
Seller will accept an endorsement on the common stock certificates
received from Buyer indicating that such stock is not to be transferred
for a period of two years from the Closing Date without being
registered under applicable provisions of the federal and California
securities laws.
2.3 REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller, to the best of its knowledge and belief, as follows:
(a) ORGANIZATION. Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of the state of
Delaware. Buyer has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business. Buyer is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where its ownership of property or operation of its
business requires qualification, except where the failure to be
qualified would not have a material adverse effect on WINCOM.
(b) AUTHORIZED CAPITALIZATION. The authorized capitalization
of Buyer consists of Twenty- Five Million (25,000,000) shares of .10
par value Common Stock, of which Eleven Million Seven Hundred Twenty
Two Thousand, Four Hundred Sixty Seven (11,722,467) shares have been
issued and are outstanding. In addition, Buyer has the obligation
pursuant to the Settlement Agreement to issue to an escrow agent a
total of two million (2,000,000) shares of its Common Stock
(pre-reverse split), in order to secure its obligations under that
certain Stipulation and Agreement of Compromise and Settlement entered
into among Buyer and certain class-action plaintiffs on June 27, 1996,
a copy of which is attached hereto as Exhibit "M" (the "Settlement
Agreement"). Buyer's Shares have been duly authorized, validly issued,
are fully paid and nonassessable with no personal liability attaching
to the ownership thereof and were offered, issued, sold and delivered
by Buyer in compliance with all applicable state and federal laws.
Except as set forth in Exhibit "N" attached hereto, Buyer is not a
party to and is not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any
portion of, Buyer's income, profits or assets, or obligating Buyer to
distribute any portion of its income, profits or assets.
-7-
<PAGE> 8
(c) AUTHORITY. Buyer has full power and lawful authority to
execute and deliver the Basic Agreements and to consummate and perform
the Transactions contemplated thereby. The Basic Agreements constitute
(or shall, upon execution, constitute) valid and legally binding
obligations upon Buyer, enforceable in accordance with their terms.
Neither the execution and delivery of the Basic Agreements by Buyer,
nor the consummation and performance of the Transactions contemplated
thereby, conflicts with, requires the consent, waiver or approval of,
results in a breach of or default under, or gives to others any
interest or right of termination, cancellation or acceleration in or
with respect to, any material agreement by which Buyer is a party or by
which Buyer or any of its material properties or assets are bound or
affected.
(d) INVESTMENT INTENT. Buyer is acquiring the Shares for its
own account, for investment purposes only, and not with a view to the
sale or distribution of any part thereof, and Buyer has no present
intention of selling, granting participation in, or otherwise
distributing the same. Buyer understands the specific risks related to
an investment in the Shares, especially as it relates to the financial
performance of WINCOM.
(e) BUYER'S FINANCIAL STATEMENTS. Buyer's Financial Statements
as presented on SEC Form 10-QSB for the period ended June 30, 1996, are
complete, were prepared in accordance with generally accepted
accounting principles applied on a basis consistent with prior periods
and fairly present the financial position of Buyer as of June 30, 1996.
(f) NO UNDISCLOSED LIABILITIES. Except as set forth in Buyer's
Financial Statements previously delivered to WINCOM, which includes a
detailed discussion of the Settlement Agreement, Buyer is not aware of
any material liabilities for which it is liable or will become liable
in the future.
(g) MATERIAL CONTRACTS. Buyer has no purchase, sale,
commitment, or other contract, the breach or termination of which would
have a materially adverse effect on the business, financial condition,
results of operations, assets, liabilities, or prospects of Buyer.
Buyer has provided to Seller all information relating to the financial
condition, results of operations, amount of assets, amount of
liabilities, or future prospects of Buyer. Attached hereto as Exhibit
"O" is an Abstract of Material Contracts and Agreements, which reflects
all contracts or agreements entered into by Buyer subsequent to June
30, 1996
(h) NO LITIGATION. Except as set forth in Buyer's Financial
Statements which includes a detailed discussion of the Settlement
Agreement, there are no actions, suits, claims, complaints or
proceedings pending against Buyer, at law or in equity, or before or by
any governmental department, commission, court, board, bureau, agency
or instrumentality; and there are no facts which would provide a valid
basis for any such action, suit or proceeding, which, if determined
adversely to WINCOM, would have a material adverse effect on WINCOM.
(i) EMPLOYMENT MATTERS. Exhibit "P" contains a list of all
officers, their base salaries, accrued vacation pay, sick pay, and
severance pay through June 30, 1996. Except as set forth in Exhibit
"Q", Buyer is not a party to any employment agreement, or any pension,
profit sharing, retirement or other deferred compensation plan or
agreement. Buyer has not incurred any unfunded deficiency or liability
within the meaning of the Employee Retirement Income Security Act of
1974 ("ERISA"), has not incurred any liability to the Pension Benefit
Guaranty Corporation established under ERISA in connection with any
employee benefit plan and has no outstanding obligations or liabilities
under any employee benefit plan. Buyer has not been a party to a
"prohibited transaction", which would subject Buyer to any tax or
penalty. There is no collective bargaining agreement or negotiations
therefor, labor grievance or arbitration proceeding against Buyer
pending, and to the knowledge of Buyer, there are no union organizing
activities pending against or involving Buyer.
(j) COMPLIANCE WITH LAWS AND REGULATIONS. Buyer is not in
violation of any federal, state, local or other law, ordinance, rule or
regulation applicable to its business, and has not received any actual
or threatened complaint, citation or notice of violation or
investigation from any governmental authority,
-8-
<PAGE> 9
in each case where such violation would have a material adverse effect
on WINCOM, except with respect to an informal inquiry by the SEC into
certain statements made by parties unrelated to Buyer orally and in
writing concerning the SEC review process of Buyer's Preliminary Proxy
Statement filed with the SEC on March 28, 1996. In addition, to the
best of its knowledge, Buyer is not aware of any rules or regulations
of the SEC which would require the SEC's approval or review of this
Agreement prior to its execution by the parties hereto.
(k) VALIDITY. All material contracts, agreements, leases and
licenses to which Buyer is a party or by which it or any of its
material properties or assets are bound or affected, are valid and in
full force and effect; and no breach or default exists, or upon the
giving of notice or lapse of time, or both, would exist, on the part of
Buyer or by any other party thereto, including, but not limited to the
Settlement Agreement.
(l) NO ADVERSE CHANGES. Buyer knows of no actual or threatened
developments that have occurred since June 30, 1996 that have the
potential to materially adversely impact upon the financial condition,
results of operations, amount of assets, amount of liabilities, or
prospects of Buyer.
(m) APPLICATION TO NASDAQ. Pursuant to the terms of the
respective agreements with Proton Global Asset Management Limited and
GFL Advantage Fund (the "Investors"), Buyer has applied to the Nasdaq
Stock Market, requesting that certain restricted shares of the Buyer
issuable upon conversion of certain a promissory note to be issued to
the Investors, be listed, together with Buyer's outstanding share of
common stock, with the Nasdaq SmallCap Market or Nasdaq National Market
exchanges.
(n) BALANCE SHEET. A true, correct and complete balance sheet
of Buyer as of August 31, 1996, prepared in accordance with generally
accepted accounting principles, is attached hereto. This balance sheet
is the most recent balance sheet of Buyer prepared on a routine basis
by management and accurately and fairly presents the financial
condition of Buyer as of its date. Management of Buyer routinely
prepares balance sheets on a monthly basis. The total assets of Buyer
reflected therein are less than $10 million and no filing with the
Federal Trade Commission under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976 is required.
III.
COVENANTS
3.1 COVENANTS OF WINCOM. WINCOM covenants and agrees that from the date
hereof to the Closing, it will perform the following acts:
(a) ORDINARY COURSE OF BUSINESS. WINCOM will operate its
business only in the ordinary course of business and will use its best
efforts to preserve WINCOM's business, organization, goodwill and
relationships with persons having business dealings with WINCOM.
(b) MAINTAIN PROPERTIES. WINCOM will maintain all of its
properties in good working order, repair and condition (reasonable wear
and use excepted) and will take all steps reasonably necessary to
maintain in full force and effect its patents, trademarks, service
marks, trade names, brand names, copyrights and other intangible
assets.
(c) COMPENSATION. WINCOM will not (1) enter into or alter any
employment agreements; (2) grant any increase in compensation other
than normal merit increases consistent with WINCOM's general prevailing
practices to any officer or employee; or (3) enter into or alter any
labor or collective bargaining agreement or any bonus or other employee
fringe benefit.
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<PAGE> 10
(d) NO INDEBTEDNESS. WINCOM will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation,
except in the ordinary course of business consistent with past
practices, where the entire net proceeds thereof are deposited with and
used by and in connection with the business of WINCOM.
(e) MAINTAIN BOOKS. WINCOM will maintain its books, accounts
and records in the usual, regular ordinary and sound business manner
and in accordance with generally accepted accounting principles applied
on a basis consistent with past practices.
(f) NO AMENDMENTS. WINCOM will not amend its corporate charter
or bylaws (or similar documents) without the prior written consent of
Buyer and WINCOM will maintain its corporate existence, licenses,
permits, powers and rights in full force and effect.
(g) TAXES AND ACCOUNTING MATTERS. WINCOM will file when due
all federal, state and local tax returns and reports which shall be
accurate and complete, including but not limited to income, franchise,
excise, ad valorem, and other taxes with respect to its business and
properties, and to pay as they become due all taxes or assessments,
except for taxes for which adequate reserves are established and which
are being contested in good faith by appropriate proceedings. WINCOM
will not change its accounting methods or practices or any
depreciation, amortization or inventory valuation policies or
practices.
(h) NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary
course of business consistent with past practices, WINCOM will not (1)
dispose of or encumber any of its properties and assets, (2) discharge
or satisfy any lien or encumbrance or pay any obligation or liability
(fixed or contingent) except for previously scheduled repayment of
debt, (3) cancel or compromise any debt or claim, (4) transfer or grant
any rights under any concessions, leases, licenses, agreements,
patents, inventions, proprietary technology or process, trademarks,
service marks or copyrights, or with respect to any know-how, or (5)
enter into or modify in any material respect or terminate any existing
license, lease, or contract.
(i) INSURANCE. WINCOM will maintain in effect all its current
insurance policies.
(j) NO SECURITIES ISSUANCES. WINCOM will not issue any shares
of any class of capital stock, or enter into any contract, option,
warrant or right calling for the issuance of any such shares of capital
stock, or create or issue any securities convertible into any
securities of WINCOM.
(k) NO DIVIDENDS. WINCOM will not declare, set aside or pay
any dividends or other distributions of any nature whatsoever.
(l) CONTRACTS. WINCOM will not enter into or assume any
contract, agreement, obligation, lease, license, or commitment except
in the ordinary course of business consistent with past practices or as
contemplated by this Agreement.
(m) NO BREACH. WINCOM will not do any act or omit to do any
act which would cause a breach of any of its material contracts,
commitments or obligations.
(n) DUE COMPLIANCE. WINCOM will comply with all laws,
regulations, rules and ordinances applicable to it and to the conduct
of its business, the violation of which would have a material adverse
effect on WINCOM.
(o) NO WAIVERS OF RIGHTS. WINCOM will not amend, terminate or
waive any material right whether or not in the ordinary course of
business.
(p) CAPITAL COMMITMENTS. WINCOM will not make or commit to
make any material capital expenditure, capital addition or capital
improvement.
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<PAGE> 11
(q) NO RELATED PARTY TRANSACTIONS. WINCOM will not make any
loans to, or enter into any transaction, agreement, arrangement or
understanding of any material nature with any of its officers,
directors or employees.
(r) NOTICE OF CHANGE. WINCOM will promptly advise Buyer in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse
change, in its business, financial condition, results of operations,
assets, liabilities or prospects.
(s) CONSENTS. WINCOM will use its best good faith efforts to
obtain the consent or approval of each person or entity whose consent
or approval is required for the consummation of the Transactions
contemplated hereby and to do all things necessary to consummate the
Transactions contemplated by the Basic Agreements.
3.2 COVENANTS OF BUYER. Buyer covenants and agrees to perform the
following acts until (except in the case of subsection (h) which will remain an
ongoing obligation of Buyer) representatives of WINCO constitute a majority of
the Board of Directors of Buyer:
(a) NO INDEBTEDNESS. Buyer will not create, incur, assume,
guarantee or otherwise become liable with respect to any obligation for
borrowed money, indebtedness, capitalized lease or similar obligation,
except in the ordinary course of business consistent with past
practices, where the entire net proceeds thereof are deposited with and
used by and in connection with the business of Buyer and except for the
Convertible Notes issued by the Buyer to each of GFL Advantage Fund
Limited ("GFL") in an aggregate principal amount of $4,000,000 and
Proton Global Asset Management Limited ("Proton") in an aggregate
principal amount of $2,000,000 (the two convertible notes are
hereinafter referred to as the "Notes").
(b) NO AMENDMENTS. Buyer will not amend its corporate charter
or bylaws (or similar documents) without the prior consent of WINCOM
(except as described above in Section 1.3(b) and Buyer will maintain
its corporate existence, licenses, permits, powers and rights in full
force and effect.
(c) NO SECURITIES ISSUANCES. Buyer, without the prior consent
of Seller, will not issue any shares of any class of capital stock, or
enter into any contract, option, warrant or right calling for the
issuance of any such shares of capital stock, or create or issue any
securities convertible into any securities of Buyer, except for the
transactions contemplated herein and except in connection with any
conversion of the Notes..
(d) NO DIVIDENDS. Buyer will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
(e) CONTRACTS. Buyer will not enter into or assume any
contract, agreement, obligation, lease, license, or commitment except
in the ordinary course of business consistent with past practices or as
contemplated by this Agreement or to amend those certain Note Purchase
Agreements dated as of June 28, 1996 between the Company and each of
GFL and Proton.
(f) CAPITAL COMMITMENTS. Buyer will not make or commit to make
any material capital expenditure, capital addition or capital
improvement.
(g) NOTICE OF CHANGE. Buyer will promptly advise WINCOM in
writing of any material adverse change, or the occurrence of any event
which involves any substantial possibility of a material adverse
change, in its business, financial condition, results of operations,
assets, liabilities or prospects.
(h) CONSENTS. Buyer will use its best good faith efforts to
obtain the consent or approval of each person or entity whose consent
or approval is required for the consummation of the Transactions
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<PAGE> 12
contemplated hereby, including the exchange offer referred to in the
recitals hereof, and to do all things necessary to consummate the
Transactions contemplated by the Basic Agreements.
(i) BOARD OF WINCOM. Buyer shall not change the members of the
board of directors of WINCOM without the consent of Seller.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby
is subject to the fulfillment by WINCOM and Seller prior to Closing of each of
the following conditions, which may be waived in whole or in part by Buyer:
4.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of WINCOM and Seller contained in this Agreement
shall have been true and correct when made and shall be true and correct as of
the Closing with the same force and effect as if made at the Closing. WINCOM and
Seller shall have performed all agreements, covenants and conditions required to
be performed by WINCOM and Seller prior to the Closing.
4.2 NO ADVERSE CHANGE. Subsequent to the date hereof and prior to the
Closing, there shall have been no event which has had or may have a material
adverse effect upon the business, financial condition, results of operation,
assets, liabilities or prospects of WINCOM.
4.3 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall be
pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
4.4 DOCUMENTS TO BE DELIVERED BY WINCOM AND SELLER. WINCOM and Seller
shall have delivered the following documents:
(a) Stock certificates representing all of the Shares, duly
endorsed to Buyer and in blank or accompanied by duly executed stock
powers, copies of which are attached as Exhibit "B".
(b) A copy of (i) the Articles of Incorporation of WINCOM, as
amended to date, certified as correct by WINCOM; and (ii) the Bylaws of
WINCOM certified as correct by WINCOM; and (iii) a certificate from the
Delaware Secretary of State, to the effect that WINCOM is in good
standing and has paid all franchise taxes in such state, all as
attached hereto as Exhibit "R";
(c) All agreements referred to in paragraph 1.4 above,
executed by all parties thereto other than Buyer.
(d) All corporate and other records of or applicable to WINCOM
including but not limited to, current and up-to-date minute books,
stock transfer books and registers, books of accounts, leases and
material contracts.
(e) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
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<PAGE> 13
V.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF WINCOM AND SELLER TO CLOSE
The obligation of WINCOM and Seller to close the Transactions is
subject to the fulfillment prior to Closing of each of the following conditions,
any of which may be waived in whole or in part by WINCOM and Seller:
5.1 COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and conditions
required to be performed by Buyer prior to the Closing.
5.2 NO LEGAL PROCEEDINGS. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
5.3 OTHER AGREEMENTS. All parties other than Seller and WINCOM shall
have executed and delivered the Basic Agreements.
5.4 PAYMENTS. Seller shall have received from Buyer a total of
13,000,000 shares of Buyer's common stock (pre-reverse split) , issued at the
Closing by Buyer pursuant to all the Basic Agreements.
VI.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
6.1 MODIFICATION. Buyer, WINCOM and Seller may amend, modify or
supplement this Agreement in any manner as they may mutually agree in writing.
6.2 WAIVERS. Buyer, WINCOM and Seller may in writing extend the time
for or waive compliance by the other with any of the covenants or conditions of
the other contained herein.
6.3 TERMINATION AND ABANDONMENT. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller, WINCOM and Buyer;
(b) By Buyer should the representations and warranties of
WINCOM and the Seller, as set forth herein, are not accurate in all
material respects or if the conditions precedent set forth in Article
IV not be satisfied in all material respects; and
(c) By WINCOM or Seller, if the representations and warranties
of Buyer as set forth herein are not accurate in all material respects
or the conditions precedent as set forth in Article V shall not have
been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
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<PAGE> 14
VII.
MISCELLANEOUS
7.1 REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise
provided, all of the representations and warranties contained in this Agreement
and in any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years, except that
the representations and warranties of WINCOM shall terminate at the Closing. No
investigation made by any party hereto or their representatives shall constitute
a waiver of any representation or warranty, and no such representation or
warranty shall be merged into the Closing.
7.2 BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the parties
pursuant thereto constitute the entire agreement between the parties. The terms
and conditions of the Basic Agreements shall inure to the benefit of and be
binding upon the respective heirs, legal representatives, successor and assigns
of the parties hereto. Nothing in the Basic Agreements, expressed or implied,
confers any rights or remedies upon any party other than the parties hereto and
their respective heirs, legal representatives and assigns.
7.3 APPLICABLE LAW. The Basic Agreements are made pursuant to, and will
be construed under, the laws of the State of Delaware.
7.4 COMPLIANCE WITH REGULATIONS. To the best of the knowledge of all
parties, they are not aware of any rules or regulations of the SEC or any
federal, state or local regulatory agency that prohibits the execution of this
Agreement and that to the best of their knowledge, this Agreement is in
compliance with all federal, state, or local law, rules and regulations.
7.5 NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
WINCO Corp.
ATTN: Brett O'Keefe, President
1875 Century Park East, Suite 930
Los Angeles, California 90067
TELEPHONE: (310) 557-1875
FAX: (310) 556-1875
With copies to:
Bethel & Nicastro, P.C.
ATTN: Pamela J. Bethel, Esq.
2023 L Street, N.W.
Suite 300
Washington, D.C. 20036
TELEPHONE: (202) 293-3700
FAX: (202) 293-7359
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<PAGE> 15
(b) If to Buyer, to:
Struthers Industries, Inc.
ATTN: G. David Gordon, Acting President
100 West 5th, Suite 601
Tulsa, Oklahoma 74103
TELEPHONE: (918) 582-1788
FAX: (918) 582-1774
With copies to:
Klenda, Gordon & Getchell, P.C.
ATTN: David Gordon, Esq.
610 ONEOK Plaza
100 West Fifth Street
Tulsa, Oklahoma 74103
TELEPHONE: (918) 587-9191
FAX: (918) 587-0054
(c) If to WINCOM, to:
WINCOM CORP.
ATTN: Raoul L. Carroll, Chairman
and Chief Executive Officer
1875 Century Park East, Suite 930
Los Angeles, Calfornia 90067
TELEPHONE: (310) 557-1875
FAX: (310) 556-1875
With copies to:
Fulbright & Jaworski L.L.P.
ATTN: Paul S. Blencowe, Esq.
865 S. Figueroa Street, Suite 2900
Los Angeles, California 90017
TELEPHONE: (213) 892-9200
FAX: (213) 680-4518
These addresses may be changed from time to time by written notice to
the other parties.
7.6 HEADINGS. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
7.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed an original and all of which together will constitute
one instrument.
7.8 SEVERABILITY. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or unenforceable
under applicable law this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
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<PAGE> 16
7.9 FORBEARANCE; WAIVER. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
7.10 ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal
proceeding based upon this Agreement shall be entitled to reasonable attorneys'
fees and expenses and court costs.
7.11 EXPENSES. Each party shall pay all fees and expenses incurred by
it incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement. However, should either party choose
to terminate this Agreement under Section 6.3(a), that party initiating the
termination shall be responsible for all legal fees and other expenses incurred
in connection with the preparation of this Agreement.
7.12 EXHIBITS. All of the Exhibits to this Agreement are incorporated
herein in the places referenced in this Agreement as if fully set forth herein.
7.13 MUTUAL RELEASES. Each member of the Board of Directors of both
WINCO Corp. and Buyer, and for their respective successors and assigns, do
hereby release and forever discharge each member of the Board of Directors of
the other corporation and their respective successors and assigns from any and
all personal liability, claims and demands, whatsoever, whether known or
unknown, which relates to or arises out of this Agreement. For the same
consideration, it is understood that this is not an admission of fault on the
part of the parties released herein.
7.14 INTEGRATION. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
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<PAGE> 17
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed
this Agreement on the date first written above.
"BUYER"
STRUTHERS INDUSTRIES, INC.
BY: /s/ G. DAVID GORDON
------------------------------
G. DAVID GORDON, PRESIDENT
"WINCOM"
WINCOM CORP.
BY: /s/ RAOUL L. CARROLL
------------------------------
RAOUL L. CARROLL, CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
"SELLER"
WINCO CORP.
BY: /s/ WILLIAM A. SHEA, JR.
------------------------------
WILLIAM A. SHEA, JR., CO-CHAIRMAN
AND CHIEF EXECUTIVE OFFICER
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<PAGE> 18
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT REFERENCE ITEM
- - ------- --------- ----
<S> <C> <C>
A 1.3(b) Proxy
A-1 1.4(a) Letters of Resignation of Board of Directors of Buyer
B 1.4(b) Stock Certificates of Shares Common Stock of Company
C 2.1(b) List of Existing Agreements Obligating WINCOM to
Issue Common Stock
D 2.1(e) Liabilities of WINCOM
E 2.1(g) Liens, Claims and Encumbrances on Property of WINCOM
F 2.1(i) Insurance of WINCOM
G 2.1(j) Transactions of WINCOM with Officers, Directors
H 2.1(k) Material Contracts of WINCOM
I 2.1(l) Employees, Salaries and Benefits of WINCOM
J 2.1(l) Employment, Pension or Retirement Agreements of WINCOM
K 2.1(m) Licenses and Permits of WINCOM
L 2.1(u) Abstract of Recent Material Contracts of WINCOM
M 2.3(b) Buyer's Settlement Agreement
N 2.3(b) List of Existing Agreements Obligating Buyer to
Distribute Assets, Income or Profits
O 2.3(g) Abstract of Recent Material Contracts of Buyer
P 2.3(i) Employees, Salaries and Benefits of Buyer
Q 2.3(i) Employment, Pension or Retirement Agreements of Buyer
R 4.4(b) Certificate of Company and Bylaws; Delaware Franchise Tax Certificate
</TABLE>
<PAGE> 19
EXHIBIT N
List of Existing Agreements Obligating Struthers Industries, Inc. to
Distribute Assets, Income or Profits:
NONE
